Slide 1: Results for the Year Ended 31 March 2016
RESULTS FOR THE YEAR ENDED 31 MARCH 2016
Slide 2: Introduction
INTRODUCTION Simon Laffin Results for the year ended 31 March 2016 2
Slide 3: Highlights
HIGHLIGHTS Underlying PBT up 78% entered FTSE 250 £300m equity raise £79m invested in H2 £193m reduction in net debt gearing down to 30% £134m pipeline Continued market opportunity £200m investment capacity to 40% LTV Results for the year ended 31 March 2016 3
Slide 4: Investment Characteristics
INVESTMENT CHARACTERISTICS Strong leases, typically: long tenure no tenant breaks no rent-free periods NHS funded income means very low default risk 3 yearly rent review cycle with linkage to cost inflation low volatility Substantial ongoing development need development from idea t
Slide 5: Financial Results & Market Update
FINANCIAL RESULTS & MARKET UPDATE Jonathan Murphy Results for the year ended 31 March 2016 5
Slide 6: Financial Highlights
FINANCIAL HIGHLIGHTS Income statement 2016) 2015) Change Net rental income (£m) 58.4) 48.2) up 21% Underlying profit before tax (£m) 28.3) 15.9) up 78% Underlying profit per share (p) 2.2) 2.1) up 5% Dividend per share (p) 2.05) 1.85) up 11% Balance sheet 31 Mar 2016) 31 Mar 2015) Change Investment
Slide 7: 15% Growth in Annualised Rent Roll
15% GROWTH IN ANNUALISED RENT ROLL £m 65 6.6 60 0.9 0.2 0.5 55 63.8 50 55.6 45 40 Mar-15 New tenants Rent reviews Development completions Acquisitions Mar-16 Results for the year ended 31 March 2016 7
Slide 8: 78% Growth in Underlying Profit
78% GROWTH IN UNDERLYING PROFIT £m 30 10.2 25 20 2.6 15 (0.4) 28.3 10 15.9 5 0 Year to Mar-15 Admin expenses Net finance costs Net rental income Year to Mar-16 Results for the year ended 31 March 2016 8
Slide 9: 4% Growth in Diluted EPRA NAV per Share
4% GROWTH IN DILUTED EPRA NAV PER SHARE 47p 46p 2.8p 45p 44p 2.2p 43p 42p 45.8p 2.6p 1.5p 41p 44.0p 40p 39p 2.1p 38p Mar-15 Early repayment Dividends Share issue / Income (underlying Capital Mar-16 costs other profit) (revaluations) Results for the year ended 31 March 2016 9
Slide 10: 20% Increase in Investment Property
20% INCREASE IN INVESTMENT PROPERTY 5.77% Equivalent yield 5.52% £m 5.56% Net initial yield 5.29% 1,150 125 1,100 1,050 1,000 36 18 950 1,109 5 900 925 850 800 Mar-15 Other Development costs Revaluation gain Acquisitions Mar-16 Results for the year ended 31 March 2016 10
Slide 11: Strong Balance Sheet
STRONG BALANCE SHEET New £200m unsecured RCF at an 31 Mar 31 Mar initial margin of 150 bps 2016 2015 New medium term LTV range of Investment property 1,109 925 40% to 50% Net debt (£m) 328 450 Current LTV of 30% provides significant growth potential Loan to value 30% 48% Well placed to take
Slide 12: Benefits of Scale
BENEFITS OF SCALE Internally managed model drives efficiencies EPRA Cost Ratio fallen from 17.7% to 16.5% Average cost of debt reduced 44bps, before impact of new RCF Improved flexibility of unsecured RCF ability to move quickly for opportunities significant transactional cost savings Re
Slide 13: Market Overview
MARKET OVERVIEW Stability of valuations over “cycle” Yield development Limited yield compression to date 8% Fundamentals remain strong with 7% prospect of rental growth rebounding 6% Pricing remains attractive for further 5% additions 4% 3% 2% 1% IPD monthly UK index initial yield 0% Assura
Slide 14: Risk Reward Profile Unchanged
RISK REWARD PROFILE UNCHANGED Total return vs standard deviation – nine years to December 2015 9% Residential index 8% Primary Healthcare 7% Total Return (per annum) Bonds All Healthcare Office 6% Industrial 5% All property 4% Equities Retail 3% 2% 1% 0% 18 16 14 12 10 8 6 4 2 0 Risk (standard devia
Slide 15: Assura Today
ASSURA TODAY £1.1bn investment value generating £64m pa in rent roll Long term cash flows underpin balance sheet 14 years weighted average unexpired lease length Scalable internal management model Investment capacity of £200m before LTV at 40% In-house development capability Fully cove
Slide 16: Property Update & Outlook
PROPERTY UPDATE & OUTLOOK Andrew Darke Results for the year ended 31 March 2016 16
Slide 17: Full Year Overview & Strengths
FULL YEAR OVERVIEW & STRENGTHS Sector opportunity Portfolio growth Developments Asset management Rent reviews Partner of choice Results for the year ended 31 March 2016 17
Slide 18: Opportunity
OPPORTUNITY Fragmented market Cost inflation provides potential for future rental growth Market pricing still favourable Modest yield shift Strong case for investment in primary care estate underinvested primary care infrastructure 4 out of 10 GPs consider premises to be inadequate e
Slide 19: Continued Growth
CONTINUED GROWTH £184m increase in portfolio value 31 Mar 31 Mar Pipeline £125m acquistions 2016 2015 5.4% average yield on cost Investment £80m £1,109m £925m property Weighted average unexpired lease Rent roll £63.8m £55.6m term of 18.2 years on new additions WAULT 14.0 years 14.4 years S
Slide 20: Enhancing Existing Portfolio
ENHANCING EXISITING PORTFOLIO Letting of vacant space – £0.6m of new Sqm Rent lettings in the year adding value Leases signed 2,277 £0.2m Lease re-gears and extensions are Agreements for lease 2,291 £0.3m priority In legal hands 785 £0.1m 8 leases extended/renewed increased WAULT 24 opport
Slide 21: Developments and Pipeline
DEVELOPMENTS AND PIPELINE 4 completed, 3 forward funded and Completed On site Immediate 1 direct pipeline Number of schemes 4 2 11 2 forward funding schemes currently on site Development cost £15.5m £13.5m £41m Completion timing 2016/17 2017/18 Appointed on 11 schemes with an approximate end v
Slide 22: Rent Reviews
RENT REVIEWS Annualised uplifts Rent review settlements RPI and fixed +1.93% OMR c.74% RPI/fixed c.26% 3.5% open market +0.69% 3.0% combined +1.20% 2.5% Less rental evidence for rent 2.0% reviews 1.5% Cost inflation returning 1.0% 0.5% 0.0% 2012/13 2013/14 2014/15 2015/16 Results for the
Slide 23: Partner of Choice to NHS and GPs
PARTNER OF CHOICE TO NHS AND GPs Focused team of in-house property managers Bespoke database Strong line-up with sector leading architect Property Matters newsletter – brand awareness GP / tenant satisfaction survey Strong brand and track record of working with NHS across UK Results for
Slide 24: Outlook
OUTLOOK Simon Laffin Results for the year ended 31 March 2016 24
Slide 25: Primary Care – Emerging Consensus
PRIMARY CARE – EMERGING CONSENSUS Non-political: primary care is preferred GP workload increasing preferred by patients cheaper for NHS Fourfold strategy emerging build ancillary service, including diagnostics and treatment centres in primary care system recruit and train more GPs le
Slide 26: Outlook for Assura
OUTLOOK FOR ASSURA Attractive long term opportunity Assura well placed expertise, scale, reputation financial strength brand recognition with GPs Our priorities: acquisition opportunities development pipeline enhancing our current estate managing cost of debt a growing, secure
Slide 27: Q&A
Q&A Harlech Blaenavon Market Weighton Results for the year ended 31 March 2016 27
Slide 28: Supplementary Information
SUPPLEMENTARY INFORMATION 1. Market 1.1 Growing demand / inadequate supply 5. Results 5.1 Five year track record 1.2 Positive political backdrop 5.2 Balance sheet at 31 March 2016 1.3 Recent encouraging statements 5.3 EPRA net asset value 1.4 Ageing population 5.4 Diluted EPRA net asset value moveme
Slide 29: 1.1 Growing Demand / Inadequate Supply
1.1 GROWING DEMAND / INADEQUATE SUPPLY Demand Supply 10 year track record of cross-party 2014 BMA survey of GP practices support for: 40% of GPs stated premises more services delivered locally inadequate for provision of general greater patient choice practice services more community bas
Slide 30: 1.2 Positive Political Backdrop
1.2 POSITIVE POLITICAL BACKDROP Cross party support for primary care investment continues “A vision of a modern NHS working for you Current government policy supportive 7 days of the week – has already committed £1bn funding to back new premises via Primary when you need it, Care Transformatio
Slide 31: 1.3 Recent Encouraging Statements
1.3 RECENT ENCOURAGING STATEMENTS Five Year Forward View General Practice Forward View – NHS England Simon Stevens, NHS Chief Executive Published April 2016 Published October 2014 Infrastructure Radical upgrade in prevention and Proposed upgrades to practice premises public health Up t
Slide 32: 1.4 Ageing Population
1.4 AGEING POPULATION Male 100 Female 2014 2039 90 80 70 60 50 40 30 20 10 0 600 400 200 0 200 400 600 Source: Office for National Statistics, Lazarus Population (thousands) in each age band Results for the year ended 31 March 2016 32
Slide 33: 1.5 Assura Well Placed to Outperform
1.5 ASSURA WELL PLACED TO OUTPERFORM Good reputation and relationships with IPD Annual Return to Dec-15 since GP community inception of index in 2006 Development capability and strong Assura Primary Healthcare Benchmark 9% pipeline 7.9% 8% Internally managed 7.4% 7% Knowledgeable and focused
Slide 34: 2.1 Total Property Assets
2.1 TOTAL PROPERTY ASSETS 31 Mar 2016 31 Mar 2015 £m £m Completed investment property 1,088.0 908.3 Investment property under construction 11.5 6.7 Pharmacy lease premiums 6.9 7.3 Finance leases 3.0 3.0 Property assets held for sale 1.7 5.4 Total 1,111.1 930.7 31 Mar 2016 31 Mar 2015 Balance sheet c
Slide 35: 2.2 Completed Investment Property
2.2 COMPLETED INVESTMENT PROPERTY Properties Value (£m) Value (%) <£1m 60 39.7 3.6 £1-5m 204 515.5 47.4 £5-10m 40 281.4 25.9 >£10m 17 251.4 23.1 321 1,088.0 Properties Value (£m) Value (%) North 126 466.0 42.8 South 95 309.4 28.5 Midlands 62 220.9 20.3 Scotland 19 37.2 3.4 Wales 19 54.5 5.0 321 1,08
Slide 36: 2.3 Sensitivity Analysis
2.3 SENSITIVITY ANALYSIS ERV) +1%) +2%) +3%) NIY ) p/share) p/share) p/share) p/share) 5.75% (5.34p) (4.72p) (4.11p) (3.50p) 5.50% (2.55p) (1.91p) (1.26p) (0.62p) 5.25% 0.51p) 1.18p) 1.85p) 2.53p) 5.00% 3.87p) 4.58p) 5.28p) 5.99p) 4.75% 7.59p) 8.33p) 9.07p) 9.81p) Results for the year ended 31 March
Slide 37: 3.1 Cash Flow Summary
3.1 CASH FLOW SUMMARY 2016) 2015) £m) £m) Opening cash 66.5) 38.6) Net cash from operations 22.9) 16.9) Cash flows from investing activities: Property and business acquisitions (122.5) (64.3) Development expenditure (17.7) (14.0) Sale of properties 1.5) 4.2) Other ) (0.2) 0.1) Cash flows from financ
Slide 38: 3.2 Contracted Rental Income
3.2 CONTRACTED RENTAL INCOME £945m total contracted cash flow, 87% of rent roll still contracted in 2026 Contracted at 31-Mar-16 60 50 40 30 20 10 0 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Mar-28 Mar-29 Mar-30 Mar-31 Results for the year ended 31 March 2016 38
Slide 39: 3.3 Lease Lengths
3.3 LEASE LENGTHS 16 Weighted average unexpired lease term 14.0 years 121 137 14 leases leases 12 135 leases 10 Rental value (£m) 99 leases 8 6 61 leases 4 2 35 46 leases leases 50 leases 0 21+ 18-20 15-17 12-14 9-11 6-8 3-5 0-2 Years remaining Results for the year ended 31 March 2016 39
Slide 40: 3.4 Debt Repayment Profile
3.4 DEBT REPAYMENT PROFILE 31 Mar 2016 31 Mar 2015 Gross debt £372.8m £516.6m Weighted average maturity 10.2 years 11.9 years Weighted average cost of debt 4.84% 5.28% 140 Aviva Bond RCF 120 100 80 60 40 20 0 Results for the year ended 31 March 2016 40
Slide 41: 4.1 ERV Evolution and Reversion
4.1 ERV EVOLUTION AND REVERSION ERV at 31 Mar 2016 £66.5m; vacant space £2.0m, valuers rental ERV £0.7m 70 Passing rent ERV £2.7m 60 £63.8m 50 Rental value (£m) 40 30 20 10 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Results for the year ended 31 March 2016 41
Slide 42: 4.2 Open Market Rents Results
4.2 OPEN MARKET RENTS RESULTS 1.20% annualised increase Open Number of from rent reviews settled market outstanding Annualised reviews reviews in the period only % (passing rent) 0.69% from open Rent reviews settled in year to 0.69% market rent reviews 31 Mar 2016 Relating to review dates from c
Slide 43: 4.3 Basis of Rent Reviews
4.3 BASIS OF RENT REVIEWS 80% Upward only review basis (71%) Upward/downward review basis - landlord only trigger (24%) 70% Upward/downward review basis - tenant can instigate (5%) 60% Proportion of rent roll 50% 40% 30% 20% 10% 0% OMR RPI Fixed Other Results for the year ended 31 March 2016 43
Slide 44: 4.4 Developments Drive Rental Growth
4.4 DEVELOPMENTS DRIVE RENTAL GROWTH New developments capture Relationship of increased costs and rent increased land and construction Build costs resulting in increased Size Initial rent Scheme Year costs (m2) (£/m2) rents (£/m2) Construction cost increased by Blaenavon 2013 2,134 149.50 1,488
Slide 45: 4.5 Rent Review Timing
4.5 RENT REVIEW TIMING Split of current rent roll by rent review basis and frequency of review: Annually 3 Year 5 Year Other OMR - 66% 8% - 74% RPI 6% 5% 4% - 15% Fixed - 6% - - 6% Other - 4% - 1% 5% 6% 81% 12% 1% 100% Results for the year ended 31 March 2016 45
Slide 46: 5.1 Five Year Track Record
5.1 FIVE YEAR TRACK RECORD Scale 2016 2015 2014 2013 2012 Rent roll (£m) 63.8 55.6 41.8 35.9 34.9 Investment property (£m) 1,109.4 925.3 656.7 557.3 537.8 Net assets (£m) 754.3 451.9 226.6 198.1 187.9 Flexibility Free cash/available facilities (£m) 118.7 65.3 27.6 15.6 12.2 Unencumbered assets (£m)
Slide 47: 5.2 Balance Sheet at 31 March 2016
5.2 BALANCE SHEET AT 31 MARCH 2016 £184m increase in investment property Property and debt Loan to value of 30% £m 1,200 Investment property Net debt £119m of available facilities and cash 1,109 Positioned strongly for future growth 1,000 925 800 600 657 400 450 415 328 200 0 Mar-14 Mar-15 M
Slide 48: 5.3 EPRA Net Asset Value
5.3 EPRA NET ASSET VALUE Adjusted (EPRA)) Adjusted (EPRA)) net asset value) net asset value) 31 Mar 2016) 31 Mar 2015) £m) £m) Net assets 754.3)) 451.9) Own shares held 0.6)) 1.8) Deferred tax (0.4)) (1.3) NAV in accordance with EPRA 754.5)) 452.4) Number of shares in issue 1,637,706,738 1,006,900,1
Slide 49: 5.4 Diluted EPRA Net Asset Value Movement
5.4 DILUTED EPRA NET ASSET VALUE MOVEMENT £m) Pence per share) Diluted NAV in accordance with EPRA at 31 Mar 2015 452.4) 44.0) Income (underlying profit) 28.3) 2.2) Capital (revaluations and capital gains) 36.5) 2.8) Dividends (27.2) (2.1) Equity issuance 305.7) 1.1) Early repayment costs (34.1) (2.
Slide 50: 5.5 Underlying & EPRA Earnings per Share
5.5 UNDERLYING & EPRA EARNINGS PER SHARE 2016 2015 £m £m Profit for the year 27.9 37.2 EPRA earnings 25.5 15.8 Underlying profit 28.3 15.9 Weighted average number of shares in issue – basic 1,300,338,908 763,163,756 Basic EPS – net profit 2.2p 4.9p – EPRA 2.0p 2.1p – underlying 2.2p 2.1p Weighted av
Slide 51: 5.6 EPRA Cost Ratios
5.6 EPRA COST RATIOS EPRA Cost Ratios give an indication of administrative and operating costs relative to gross rental income 2016 2015 EPRA Cost Ratio (including direct vacancy costs) 16.5% 17.7% EPRA Cost Ratio (excluding direct vacancy costs) 16.0% 16.3% The costs for the period include an incre
Slide 52: 5.7 VCP Dilution
5.7 VCP DILUTION Five year scheme to align incentives for staff and management with long-term shareholder performance Participants receive 10% of total shareholder return over 8% compound hurdle rate subject to overall cap of 25 million shares (which represents 2.5% of total issued share capital
Slide 53: 6.1 REITs
6.1 REITS REIT status is a tax election available to listed real estate companies REITs are tax exempt on property rental income and capital gains Profits are passed through to investors through minimum Property Income Distributions (PIDs) 90% of taxable property rental profits Subject to
Slide 54: 7.1 Bank and Bond Facilities
7.1 BANK AND BOND FACILITIES Effective1 Secured Rental Outstanding) Fixed / Loan / Bond Maturity interest1 properties income 31 Mar 2016) Floating rate1 £m £m £m) 10 year, bullet 10 year secured Bond Fixed repayment 4.75%1 177.0 11.7 110.0) 2021 Aviva amortising secured Amortising to Fixed 5.43%1 38
Slide 55: 7.2 Covenants
7.2 COVENANTS All covenant conditions Bond Aviva RCF complied with Req. Act. Req. Act. Req. Act. Income v interest cover >1.5 2.15 ≥1.05 1.31 ≥1.75 7.63 Loan to Value >1.35 1.59 <70% 57% <60% 31% In addition, bond requires NHS backed income to exceed 75% (31 Mar 2016: 78%) and the weighted average
Slide 56: 8.1 Dividend Calendar
8.1 DIVIDEND CALENDAR 2015/16 Payment date2 Ex-div date2 Record date2 Total2 Q1 30 Apr 20151 16 Apr 20151 17 Apr 20151 0.50p2 Q2 22 Jul 20151 9 Jul 20151 10 Jul 20151 0.50p2 Q3 4 Nov 20151 22 Oct 20151 23 Oct 20151 0.50p2 Q4 20 Jan 20161 17 Dec 20151 18 Dec 20151 0.55p1 2016/17 Payment date2 Ex-div
Slide 57: Disclaimer
DISCLAIMER This presentation contains certain statements that are neither financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or implied by t