Assura Plc · OTC:ARSSF
Assura — H1 2011/12 Earnings Presentation
29 slides from Assura's earnings presentation, September 2011
Slide 1: Assura Group Limited Interim Results 2011/12
Assura Group Limited Interim Results 2011/12 The Leading Primary Healthcare Property Company
Slide 2: Simon Laffin, Chairman
Simon Laffin Chairman Assura G
Slide 3: Summary
Summary • Assura now a pure play primary healthcare property company – Attractive niche market – Secure and growing rental income stream – Property value growth • Business performance robust – 58% improvement in trading profit • Refinancing removing legacy problem – £120m NAB loan needed to be refin
Slide 4: Robust Performance
Robust Performance • 31% increase in revenues – Following acquisition of AH Medical Properties – Property revenues up 10.3% excluding AH Medical Properties • 58% increase in Group trading profit • 4.8% increase from weighted average rent reviews agreed in H1 • 5.9% stable yields • New development pi
Slide 5: Attractive Niche Market
Attractive Niche Market • We are the largest single player in a fragmented sector with robust fundamentals • Estimated 8,300 GP practices in 7,500 premises – 60% GP owned, 20% NHS, 20% corporates, funds & LIFT Cos – About half are purpose built – Half are in need of modernisation, expansion or redev
Slide 6: Well Positioned Investment Portfolio
Well Positioned Investment Portfolio 163 investment properties with a capital value of £510m, majority in excess of £1m 6
Slide 7: Secure & Growing Income: Rental Income
Secure & Growing Income: Rental Income 25,000 H2 Mar 20,000 H1 Sept Actual Property Income - 5 Years 15,000 10,000 5,000 0 2006 2007/08 2008/09 2009/10 2010/11 2011/12 (12 Months) ( 9 Months 15 months) 7
Slide 8: Secure & Growing Income: Average Increases in Rents
Secure & Growing Income: Average Increases in Rents 8
Slide 9: Secure & Growing Income: Rent Reviews Last 12 Months
Secure & Growing Income: Rent Reviews Last 12 Months 9
Slide 10: Secure & Growing Income: Basis of Rent Reviews
Secure & Growing Income: Basis of Rent Reviews £25.8m £3.6m £2.1m £1.5m 10
Slide 11: Secure & Growing Income: Strength of Tenant Covenant
Secure & Growing Income: Strength of Tenant Covenant £20.7m £6.9m £3.3m £2.1m • Rents are contractual with GP rents passed through to NHS • Government has said that this will not change in the NHS reorganisation 11
Slide 12: Secure & Growing Income: Lease Length
Secure & Growing Income: Lease Length 348 Leases with a total rental value of £33.0m pa and average residual life of 16.6 years 12
Slide 13: £510m Investment Property with Stable Yield
£510m Investment Property with Stable Yield 13
Slide 14: NAB Swap
NAB Swap • £190m, 2038 tenor – Break options every 5 years, starting September 2013 – Termination when loan ceases or in 2027 • Swaption taken out October 2011 to cap downside – Initial cost £13.6m, value now c.£13m • Mark to market swap loss now c.£62m – Value will be fixed with NAB – Rights Issue
Slide 15: Rights Issue
Rights Issue • Support of major shareholders • Fully underwritten 2 for 7 – 118 million new shares to be issued • 25% discount to the market price • Raise £35m gross, £33m net of costs 15
Slide 16: Refinancing Strategy
Refinancing Strategy Use of Funds Source of Funds £m £m 120 Redemption NAB Loan c62 Divest Swap/Swaption Surplus* cash 30 Sept 11 27 New bond placing 110 Equity issuance 35 Increased Santander loan 10 Increased Aviva loan 4 Issue costs (bond/rights) (3) Other (1) c182 c182 * Net of £7.5m - headroom
Slide 17: Nigel Rawlings, Chief Executive
Nigel Rawlings Chief Executive
Slide 18: Improving Performance
Improving Performance H1 H1 2011/12 2010/11 % £m £m Total revenue 18.3 13.9 +31% Gross profit 16.4 12.2 +34% Administration costs (3.2) (3.8) -17% Group trading profit 13.2 8.4 +58% Other (0.3) 0.1 Financing costs (9.8) (7.1) Profit before revaluations and associates 3.1 1.4 Property investment gain
Slide 19: Result After MtM Deficit
Result After MtM Deficit H1 H1 2011/12 2010/11 £m £m Underlying profit before taxation 13.9 11.4 MtM on Swaps (37.2) (20.8) Loss Before Taxation (23.3) (9.4) Taxation 13.0 (0.4) Loss from continuing operations (10.3) (9.8) Discontinued activities 1.0 1.4 Loss for the period (9.3) (8.4) 19 * Before p
Slide 20: Strong Development Pipeline
Strong Development Pipeline • £30m value on site at 30th September 2011 (8 sites) • £27m completed in H1 (5 sites) – Additional £12m will be completed this year (3 sites) – Further £14m commenced (5 sites) – Expected rent roll from development completions £2.5m this year, £1.9m next year • £3.5m of
Slide 21: LIFT Investments Delivering Returns
LIFT Investments Delivering Returns • LIFTs are separate companies with shareholders, comprising NHS, PCTs and private sector • Invest in primary healthcare property • Assura owns c28% equity in 6 LIFTs – £8.4m in 12% loan notes – £0.1m in ordinary equity • Valuable investments with £1.0m pa income
Slide 22: Low Cost Model
Low Cost Model Overheads: •26 heads, down from c500 two years ago – Post conditional sale of LIFT consultancy •Offices rationalised to one in Warrington •Property management overhead 2.9% of rents in H1 •Property development overhead 3.0% of development costs in H1 •Central costs reduced to 0.4% of
Slide 23: Cash Flow
Cash Flow H1 H1 2011/12 2010/11 £m £m Cash from operations 2.9 4.6 Capital expenditure (10.3) (9.2) Loans advanced to associated companies - (1.6) Disposals 1.4 3.3 Other movements (0.7) 0.1 Gross Cash Flow (6.7) (2.8) Discontinued businesses 21.4 - Dividend paid (5.1) - SWAP repayment (2.6) Net inc
Slide 24: Balance Sheet
Balance Sheet 30 Sept 2011 31 March 2011 Total Property £m £m Sept 2011 Mar 2011 Investment Property 510.3 464.8 541.6 509.6 Under Construction 17.7 35.0 Associates 8.4 9.9 Intangibles 19.7 44.6 Fixed assets 0.2 13.2 Loan re pharmacy 6.0 0.0 Deferred tax 13.0 1.8 575.3 569.3 Cash 48.7 39.0 Debtors 1
Slide 25: Long Term Debt Structure
Long Term Debt Structure Lender Due Existing Proposed £m £m Aviva* Between now and 2040 205 208 Bond** November 2021 - 110 Santander*** November 2016 40 50 RBS Loan March 2013 5 5 NAB March 2013 120 - Total Debt 370 373 Cash (49) (49) Net Debt**** 321 324 * Loans maturing in 2012 and 2013 being exte
Slide 26: Simon Laffin, Chairman
Simon Laffin Chairman Assura G
Slide 27: Key Opportunities and Way Forward
Key Opportunities and Way Forward • Managing existing portfolio – Average lease tenure – Quality – Yield – Rental growth • Growing value – Continued strong demand from GPs for new, purpose-built facilities – New sites – Redevelopments – Purchase and leaseback opportunities 27
Slide 28: Summary
Summary • Pure play primary healthcare property company – Attractive, fragmented market with robust fundamentals – Stable and secure long term income – Property value and rental growth • Financing – Deal with legacy NAB swap once and for all – Long term, fixed rate financing – Locking in historicall
Slide 29: Questions
Questions Assura G