Slide 1: Results for the year ended 31 March 2017
RESULTS FOR THE YEAR ENDED 31 MARCH 2017
Slide 2: Overview: Solid growth
OVERVIEW Further Solid valuation growth gains Positive Strong policy pipeline background Results for the year ended 31 March 2017 2
Slide 3: Overview: EPRA EPS up 20%
OVERVIEW EPRA EPS up 20% EPRA NAV Dividend up 8% up 10% STPs Pipeline 5YFV £153m Naylor Report Results for the year ended 31 March 2017 3
Slide 4: 17% growth in annualised rent roll
17% GROWTH IN ANNUALISED RENT ROLL £m 75 8.8 70 0.7 0.7 65 0.4 74.4 60 63.8 55 50 Mar-16 Asset Rent reviews Development Acquisitions Mar-17 management completions Results for the year ended 31 March 2017 4
Slide 5: 58% growth in EPRA earnings
58% GROWTH IN EPRA EARNINGS £m 45 9.5 40 35 3.4 30 2.8 25 (0.9) 20 40.3 15 25.5 10 5 0 Year to Mar-16 Admin expenses Tax and other Net finance costs Net rental income Year to Mar-17 Results for the year ended 31 March 2017 5
Slide 6: 8% growth in diluted EPRA NAV per share
8% GROWTH IN DILUTED EPRA NAV PER SHARE 50p 3.4p 49p 48p 47p 46p 2.4p 45p 49.3p 44p 43p (2.3p) 45.8p 42p 41p 40p Mar-16 Dividends Income Capital Mar-17 (EPRA EPS) (revaluations) Results for the year ended 31 March 2017 6
Slide 7: 21% increase in investment property
21% INCREASE IN INVESTMENT PROPERTY 5.52% Equivalent yield 5.29% £m 5.29% Net initial yield 5.10% 1,400 1,350 156 1,300 1,250 1,200 57 1,345 1,150 21 2 1,100 1,050 1,109 1,000 Mar-16 Other Development costs Revaluation gain Acquisitions Mar-17 Results for the year ended 31 March 2017 7
Slide 8: Strong balance sheet
STRONG BALANCE SHEET New £200m RCF at initial margin 2017 2016 of 150 bps Investment property 1,345 1,109 New £100m private placement fixed at Net debt (£m) 500 328 2.65% for 10 years agreed in October Both on unsecured basis Loan to value 37% 30% 78 basis point reduction in weighted Cash/un
Slide 9: EPRA cost ratio reduced to 14%
EPRA COST RATIO REDUCED TO 14% EPRA Cost Ratio 24% 22% 20% 20% 18% 18% 16% 17% 14% 14% 12% 10% Mar-14 Mar-15 Mar-16 Mar-17 Results for the year ended 31 March 2017 9
Slide 10: Robust performance
ROBUST PERFORMANCE Stability of valuations over “cycle” Yield progression 8% Fundamentals remain strong with prospect of rental growth rebounding 7% Pricing remains attractive for further 6% additions 5% 4% 3% 2% 1% IPD monthly UK index initial yield 0% Assura Net Initial Yield 15 year Gilt Re
Slide 11: Continued growth through acquisitions
CONTINUED GROWTH THROUGH ACQUISITIONS £236m increase in portfolio Pipeline 2017 2016 Change value Investment £156m additions £86m £1,345m £1,109m £236m property 5.7% average yield on cost Rent roll £74.4m £63.8m £10.6m Weighted average unexpired WAULT 13.2 years 14.0 years (0.8) years lease
Slide 12: Bespoke database
BESPOKE DATABASE Database – over 9,000 entries vital tool for targeted growth Lease renewal and lifespan is key determinant scale of opportunity for continued consolidation 67 data points for each surgery circa 5,000 monthly updates to the system including contact with each practice Resu
Slide 13: Developments and pipeline
DEVELOPMENTS AND PIPELINE 2 forward funded schemes Immediate Completed On site completed pipeline 6 forward funding scheme Number of schemes 2 6 8 currently on site Development cost £13.8m £31.0m £36.0m Appointed on 8 schemes Cost to complete £19.1m with an approximate end Completion timing 20
Slide 14: Rent reviews
RENT REVIEWS Annualised uplifts Rent review settlements average 1.57% RPI/fixed c.28% OMR c.72% 6.0% RPI and fixed 2.49% open market 0.88% 5.0% Cost inflation provides 4.0% potential for future growth 3.0% 2.0% 1.0% 0.0% Results for the year ended 31 March 2017 14
Slide 15: Enhancing existing portfolio
ENHANCING EXISTING PORTFOLIO Letting of vacant space – £0.4m of new Sqm Rent lettings in the period adding value Leases signed 4,377 £0.4m Portfolio 98% let In legal hands 1,169 £0.2m Lease re-gears and extensions are priority Property extensions add value Results for the year ended 31 March
Slide 16: Patient orientated solutions
PATIENT ORIENTATED SOLUTIONS Provides safe, fully compliant access to extended range of services Improves health outcomes More episodes of care delivered in the community NHS in line with STPs, next steps 5YFV improved efficiency and cost effective primary care hubs able to deliver mor
Slide 17: Engaging with the NHS agenda
ENGAGING WITH THE NHS AGENDA Pro-active engagement with policy makers Recruited a Head of Public Affairs Chair of BPF Healthcare Committee Engaging with key stakeholders Results for the year ended 31 March 2017 17
Slide 18: Policy
POLICY NHS continues at the core of national debate Key issues emerging over past year Sustainability and Transformation Partnerships (STPs) published significant increase planned in primary care workforce new models for care point to primary care at scale through federations, clusters a
Slide 19: Outlook for Assura
OUTLOOK FOR ASSURA Attractive long term opportunity Assura well placed expertise and unique positioning reputation and brand recognition with GPs scale and financial strength Our priorities: to promote the case for investment in primary care respond to emerging NHS priorities to su
Slide 20: Q&A
Q&A Ashby Frome Guildford Donnington Results for the year ended 31 March 2017 20
Slide 21: Supplementary information
SUPPLEMENTARY INFORMATION 1. Market 1.1 Growing demand / inadequate supply 5. Results 5.1 Financial highlights 1.2 Positive political backdrop 5.2 Five year track record 1.3 Policy statements 5.3 Balance sheet at 31 March 2017 1.4 Ageing population 5.4 EPRA NAV 1.5 Assura well placed to outperform 5
Slide 22: 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 care closer to home inadequate for provision of general greater patient choice practice services Ongoing funding challenge 70
Slide 23: 1.2 Positive political backdrop
1.2 POSITIVE POLITICAL BACKDROP Cross party support for primary care investment continues Broad consensus on estate as a key enabler of transformation and sustainability Government policy supportive: “General expansion of access to GP services, growing the primary care workforce and practice
Slide 24: 1.3 Policy statements
1.3 POLICY STATEMENTS Next Steps on the Five Year Forward The Naylor review of NHS property and estates: why the View estate matters for patients Published March 2017 Published March 2017 Emphasis on primary care Recommendations: NHS needs to ‘protect and improve New NHS property board t
Slide 25: 1.4 Ageing population
1.4 AGEING POPULATION 2014 Male 100 Female 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 2017 25
Slide 26: 1.5 Assura well placed to outperform
1.5 ASSURA WELL PLACED TO OUTPERFORM Good reputation and relationships with IPD Annual Return to Dec-16 since GP community inception of index in 2006 Development capability and strong Assura Primary Healthcare Benchmark 9% pipeline 8.1% 8% Internally managed 7.5% 7% Knowledgeable and focused
Slide 27: 1.6 Risk reward spectrum
1.6 RISK REWARD SPECTRUM Total return vs standard deviation – ten years to December 2016 9% Residential index 8% Primary Healthcare 7% Total Return (per annum) Bonds All Healthcare Office 6% Industrial Equities 5% All property 4% Retail 3% 2% 1% 0% 18 16 14 12 10 8 6 4 2 0 Risk (standard deviation)
Slide 28: 2.1 Total property assets
2.1 TOTAL PROPERTY ASSETS 2017 2016 £m £m Completed investment property 1,315.3 1,088.0 Investment property under construction 20.2 11.5 Pharmacy lease premiums 6.4 6.9 Finance leases 3.0 3.0 Property assets held for sale 0.9 1.7 Total 1,345.8 1,111.1 2017 2016 Balance sheet classification £m £m Inv
Slide 29: 2.2 Completed investment property
2.2 COMPLETED INVESTMENT PROPERTY Properties Value (£m) Value (%) <£1m 83 53.5 4 £1-5m 245 618.5 47 £5-10m 48 322.2 25 >£10m 22 321.1 24 398 1,315.3 100 Properties Value (£m) Value (%) North 147 538.7 41 South 127 391.6 30 Midlands 77 274.2 21 Scotland 21 44.8 3 Wales 26 66.0 5 398 1,315.3 100 Rent
Slide 30: 2.3 Sensitivity analysis
2.3 SENSITIVITY ANALYSIS ERV) +1%) +2%) +3%) NIY ) p/share) p/share) p/share) p/share) 5.75% (9.03p) (8.32p) (7.61p) (6.90p) 5.50% (5.81p) (5.07p) (4.33p) (3.59p) 5.25% (2.28p) (1.51p) (0.73p) 0.05p 5.00% 1.60p) 2.41p) 3.23p 4.04p 4.75% 5.88p) 6.74p) 7.60p 8.46p Results for the year ended 31 March 2
Slide 31: 3.1 Cash flow summary
3.1 CASH FLOW SUMMARY Year to 2017) Year to)2016) £m) £m) Opening cash 44.3) 66.5) Net cash from operations 39.0) 22.9) Cash flows from investing activities: Property and business acquisitions (157.9) (122.5) Development expenditure (19.9) (17.7) Sale of properties 1.4) 1.5) Other (0.3) (0.2) Cash f
Slide 32: 3.2 Contracted rental income
3.2 CONTRACTED RENTAL INCOME £1,013m total contracted cash flow, 75% of rent roll still contracted in 2027 80 Contracted at 31-Mar-17 70 60 50 40 30 20 10 0 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 Mar-32 Results for the year ended 31 March 20
Slide 33: 3.3 Lease lengths
3.3 LEASE LENGTHS 20 Weighted average unexpired lease term 13.2 years 18 810 leases 159 75% of rent roll 9+ years unexpired term 16 leases 173 14 leases Rental value (£m) 12 114 leases 10 117 leases 8 6 56 69 4 leases leases 61 2 leases 61 leases 0 21+ 18-20 15-17 12-14 9-11 6-8 3-5 0-2 Years remain
Slide 34: 3.4 Debt repayment profile
3.4 DEBT REPAYMENT PROFILE 2017 2016 Gross debt £523.8m £372.8m Weighted average maturity 8.7 years 10.2 years Weighted average cost of debt 4.06% 4.84% Aviva Bond RCF Private placement 300 250 200 150 100 50 0 Results for the year ended 31 March 2017 34
Slide 35: 4.1 ERV evolution and reversion
4.1 ERV EVOLUTION AND REVERSION ERV at 31 Mar 2017 £76.7m; vacant space £1.7m, valuers rental ERV £0.6m Passing rent ERV 80 £2.3m 70 £74.4m £2.7m 60 £63.8m Rental value (£m) 50 40 30 20 10 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Results for the year ended 31 March 2017 35
Slide 36: 4.2 Open market rents results
4.2 OPEN MARKET RENTS RESULTS 1.6% annualised increase Open Number of from rent reviews settled market outstanding Annualised reviews reviews in the period only % (passing rent) 0.9% from open Rent reviews settled in year to 0.9% market rent reviews 31 March 2017 Relating to review dates from ca
Slide 37: 4.3 Basis of rent reviews
4.3 BASIS OF RENT REVIEWS 80% Upward/downward review basis - tenant can instigate (6%) Upward/downward review basis - landlord only trigger (23%) 70% Upward only review basis (71%) 60% Proportion of rent roll 50% 40% 30% 20% 10% 0% OMR RPI Fixed Other Results for the year ended 31 March 2017 37
Slide 38: 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 at Blaenavon 2013 2,134 149.5 1,488 h
Slide 39: 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 - 64% 7% 1% 72% RPI 5% 5% 4% 1% 15% Fixed 2% 6% 1% - 9% Other - 4% - - 4% 7% 79% 12% 2% 100% Results for the year ended 31 March 2017 39
Slide 40: 5.1 Financial highlights
5.1 FINANCIAL HIGHLIGHTS Income statement 2017) 2016) Change Net rental income (£m) 67.9) 58.4) up 16% EPRA earnings (£m) 40.3) 25.5) up 58% EPRA EPS (p) 2.4) 2.0) up 20% Dividend per share (p) 2.25) 2.05) up 10% Balance sheet 2017) 2016) Change Investment property (£m) 1,345) 1,109) up 21% Diluted
Slide 41: 5.2 Five year track record
5.2 FIVE YEAR TRACK RECORD Scale 2017 2016 2015 2014 2013 Rent roll (£m) 74.4 63.8 55.6 41.8 35.9 Investment property (£m) 1,344.9 1,109.4 925.3 656.7 557.3 Net assets (£m) 818.0 754.3 451.9 226.6 198.1 Flexibility Free cash/available facilities (£m) 123.5 118.7 65.3 27.6 15.6 LTV (%) 37 30 48 62 62
Slide 42: 5.3 Balance sheet at 31 March 2017
5.3 BALANCE SHEET AT 31 MARCH 2017 £236m increase in investment Property and debt property £m Investment property Net debt 1,600 Loan to value of 37% 1,400 £124m of available facilities 1,345 and cash 1,200 Positioned strongly for future 1,109 1,000 growth 925 800 600 657 500 400 450 415 328
Slide 43: 5.4 EPRA net asset value
5.4 EPRA NET ASSET VALUE EPRA NAV) EPRA NAV) 2017) 2016) £m) £m) Net assets 818.0) 754.3) Own shares held -) 0.6) Deferred tax (0.5) (0.4) NAV in accordance with EPRA 817.5) 754.5) Number of shares in issue 1,655,040,993) 1,637,706,738 EPRA NAV per share – basic 49.4p 46.1p Diluted number of shares
Slide 44: 5.5 Diluted EPRA net asset value movement
5.5 DILUTED EPRA NET ASSET VALUE MOVEMENT £m) Pence per share) Diluted NAV in accordance with EPRA at 31 March 2016 754.5) 45.8) Income (underlying profit) 40.3) 2.4) Capital (revaluations and capital gains) 56.4) 3.4) Dividends (37.0) (2.3) Equity issuance 1.7) -) Other 1.6) -) NAV in accordance wi
Slide 45: 5.6 EPRA earnings per share
5.6 EPRA EARNINGS PER SHARE 2017 2016 £m £m Profit for the period 95.3 27.9 EPRA earnings 40.3 25.5 Weighted average number of shares in issue – basic 1,647,388,495 1,300,338,908 Basic EPS – net profit 5.8p 2.2p – EPRA 2.4p 2.0p Weighted average number of shares in issue – diluted 1,650,631,786 1,31
Slide 46: 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 47: 7.1 Bank and bond facilities
7.1 BANK AND BOND FACILITIES Effective1 Outstanding) Fixed / Secured/ Loan / Bond Maturity interest1 31 Mar 2017) Floating unsecured rate1 £m) 10 year listed Bond Fixed Dec-21 4.75%1 Secured 110.0) Aviva loans Fixed Various to 2044 5.43%1 Secured 213.8) £200m revolving credit facility Floating May-2
Slide 48: 7.2 Covenants
7.2 COVENANTS All covenant conditions Bond Aviva Unsecured facilities complied with Req. Act. Req. Act. Req. Act. Interest cover >1.5 2.29 ≥1.05 1.50 ≥1.75 9.90 LTV >1.35 1.69 <70% 53% n/a n/a WAULT >10 yrs 10.7 yrs n/a n/a >7 yrs 14.4 yrs NHS >75% 78% n/a n/a n/a n/a Leverage n/a n/a n/a n/a <60% 2
Slide 49: 8.1 Dividend calendar
8.1 DIVIDEND CALENDAR 2016/17 Payment date2 Ex-div date2 Record date2 Total2 Q1 20 Apr 20161 17 Mar 20161 18 Mar 20161 0.55p1 Q2 27 Jul 20161 23 Jun 20161 24 Jun 20161 0.55p1 Q3 19 Oct 20161 15 Sep 20161 16 Sep 20161 0.55p1 Q4 18 Jan 20171 15 Dec 20161 16 Dec 20161 0.60p1 2017/18 Payment date2 Ex-di
Slide 50: 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