Assura Group Results Presentation year ended 31 March 2013 Investing - PowerPoint PPT Presentation

Assura Group Results Presentation year ended 31 March 2013 Investing in the future of primary care property

Assura Group Introduction Graham Roberts Investing in the future of primary care property

Assura Group Presentation • Headlines • Financial results Property update • • Market update Q & A • Investing in the future of primary care property 3

Headlines • Management has delivered – Strong results – Focused asset management generating rental growth – Managing developments profitably – Selling non ‐ core assets – REIT conversion achieved • Primary care sector is an extremely attractive market Assura is best placed to take advantage of the opportunity • – Trusted brand amongst GP community – Scalable internal management structure – Development profits retained – Transparency of reporting – Strong PLC Board Investing in the future of primary care property 4

Strong results • 44% increase in underlying profits to £10.2m • 6.3% increase in net asset value to 38.6p per share 18.6% total shareholder return • Investing in the future of primary care property 5

Assura Group Financial results Jonathan Murphy Investing in the future of primary care property

Financial highlights • 7.2% Property return – 6.1% income return 8.7% Accounting returns 1 • – 2.4% dividend paid – 0.855p – 6.3% increase in adjusted net asset value to 38.6p • 44% increase in underlying profits to £10.2m • 27% increase in underlying EPS to 1.9p 2% reduction in LTV to 62% • 1 Increase in EPRA NAV and dividends Investing in the future of primary care property 7

Solid income growth • 118 rent reviews completed: Rent Reviews Settled in the Year 5.0 – 2.4% weighted average £4.2m annual uplift 4.0 £3.7m – Last 2 years 3.4% and 3.8% annual uplift 3.0 £2.8m Rent £m • Backrents of £0.9m 46 • £0.9m new annual rent roll, 2.0 £1.8m reviews 36 reviews developments 21 reviews 1.0 15 • 2.9% increase in annualised reviews rent roll to £35.9m 0.0 Q1 Q2 Q3 Q4 Previous Rent Rental Increase Investing in the future of primary care property 8

Underlying profit growth £m £11.0 £0.4m £10.5 £0.7m £0.2m £0.2m £10.0 £9.5 £9.0 £2.8m £8.5 £10.2m £8.0 £7.5 £7.0 £7.1m £6.5 £6.0 Year to Mar12 Net rental income Finance revenue Finance costs Admin expenses Associates Year to Mar13 Investing in the future of primary care property 9

Lowest cost operator • 7% new property income • 4.5% long ‐ term interest rates Can manage £100m additional property for only 0.08% cost • • Further growth significantly earnings enhancing Investing in the future of primary care property 10

Core investment portfolio • 162 primary care centres valued £524m • 0.5% valuation uplift Rent review basis • – 80% open market – 11% RPI – 9% stepped & fixed Mar 2013 Mar 2012 • £34.1m core annualised rent Initial yield 5.95% 5.89% roll Equivalent yield 6.15% 6.11% Investing in the future of primary care property 11

Transparent balance sheet 31 Mar 2013) 31 Mar 2012 ) £m ) £m ) Properties 1 569.3) 549.2 ) LIFT 11.2) 10.5 ) Cash and deferred consideration 2 41.7) 31.0 ) Debt (392.1) (375.6) Deferred revenue (14.8) (13.3) Other net working capital (14.8) (12.9) Derivatives at fair value (3.6) (2.5) Deferred tax 1.1) 1.3 ) Property plant & equipment 0.1) 0.2 ) Net assets 198.1) 187.9 ) Own shares held 1.9) 1.9 ) EPRA adjustments (slide appendix) 4.4) 2.4 ) EPRA NAV 204.4) 192.2 ) EPRA NAV per share 38.6p 36.3p Movement +2.3p (6.3%) 1 Includes available for sale £12.0m, Mar 2012 £11.4m 2 Deferred consideration £6.0m, Mar 2012 £9.6m Investing in the future of primary care property 12

EPRA net asset value movement Pence per ) £m) share* ) EPRA net asset value at 31 March 2012 192.2) 36.3) Income (underlying profit) 10.2) 1.9) Capital (revaluations and capital gains) 5.9) 1.1) Dividends (4.5) (0.9) Other 0.6) 0.2) 204.4) 38.6) EPRA net asset value at 31 March 2013 Growth 2.3) 6.3%) * Based on 529,548,924 shares in issue Investing in the future of primary care property 13

Robust cash flow £m • Government backs £60.0 88.9% core portfolio £3.6m £15.9m leases £50.0 Undrawn Facility • 15.1 years weighted £4.8m £40.0 £13.3m average remaining lease £12.6m £4.5m Cash length £35.7m £30.0 • 11.3 years average £20.0 Cash maturity of debt £21.4m £10.0 £0.0 Investing in the future of primary care property 14

Dividend • Underlying EPS of 1.9p per share • 6% growth in quarterly dividend to 1.21p per share equivalent on an annual basis • 1.6x covered by 2013 underlying profit Progressive dividend policy • Investing in the future of primary care property 15

Assura Group Property update Andrew Darke Investing in the future of primary care property

Developments deliver shareholder value • £3.5m development gains, profit on cost of 15.3% • 7.1% yield on total cost of completed developments £70m value of 28 additional identified schemes • Completed Fully funded on site Immediate prospects Development cost £12.4m £33.0m £30.6m Development cost to come n/a £19.2m £30.4m ERV £0.9m £2.3m £2.0m Number of schemes 5 9 11 Investing in the future of primary care property 17

Development – significant opportunity • Continuing latent demand for new premises • Care Quality Commission (“CQC”) is starting to impact – 20% of premises failed registration and many will need new premises • No change expected under new regime In house expert team very end ‐ user focused and knowledgeable • • Outlook remains strong Investing in the future of primary care property 18

Bespoke development – completions Manchester Square Health Centre, Milford Haven St Hilary Group Practice, Wallasey Investing in the future of primary care property 19

Sudbury – current healthcare Three existing facilities, all non ‐ compliant with current NHS standards Investing in the future of primary care property 20

Sudbury Community Health Facility • Example of integrated primary care centre services co ‐ located in one facility – GP Practice – Diagnostics – Outpatients – Physiotherapy – Podiatry – Audiology – Counselling – Midwifery – Pharmacy Investing in the future of primary care property 21

Sudbury 3,300m 2 Gross Internal Area • • 20 year leases with 5 yearly RPI index linked rent reviews £547,000pa rent roll • • Fixed price build cost £8.6m approximate valuation on completion • Investing in the future of primary care property 22

Sudbury Investing in the future of primary care property 23

Non ‐ core disposal success • 14 of 19 non ‐ income earning properties sold • Former Head Office sold for £5.5m Land at Scarborough (book value: £6.3m), nearing completion • • Non ‐ core no longer material Investing in the future of primary care property 24

Assura Group Market update Graham Roberts Investing in the future of primary care property

Significant market opportunity • Sector offers excellent risk adjusted returns • UK health infrastructure requires major investment Scale of opportunity could dwarf investment to date: • – Over £10Bn required for investment in the sector Assura is a trusted brand in the sector • • Internal management and REIT status will deliver the benefits of this growth to shareholders Investing in the future of primary care property 26

Partner of choice • Assura working with new clinical bodies • Dr James Kingsland appointed as strategic medical adviser Engaging with NHS • Investing in the future of primary care property 27

Conclusions • Management has delivered: – Strong results – Asset management disciplines delivering results – Disposal of non ‐ core assets – Continued profitable developments and pipeline • Primary care sector is extremely attractive market • Assura best placed to take advantage of the opportunity as internally managed REIT Investing in the future of primary care property 28

Q&A Investing in the future of primary care property 29

Supplementary information 1. Market 1.1 Growing demand / inadequate supply 1.2 Market: policy direction supportive 1.3 Yield outlook stable 1.4 Sector attractiveness 1.5 Asset class has proven its relative value 1.6 Strong and predictable cash flow 1.7 Assura well placed to outperform 1.8 Core portfolio v IPD Healthcare 2. Net assets 2.1 EPRA – net asset value 3. Portfolio 3.1 Total property assets 3.2 Non ‐ core portfolio 3.3 Capital value – core portfolio 3.4 Sensitivity analysis on core portfolio 3.5 Core portfolio lease length 4. Rents 4.1 Portfolio rental income growth over 5 years 4.2 ERV evolution and reversion 4.3 Core portfolio rental growth 4.4 Open market rents still increasing 4.5 Basis of rent reviews 5. REITs 5.1 REITs 6. Dividends 6.1 Dividends 7. Borrowings 7.1 Bank and Bond Facilities 7.2 Covenants Investing in the future of primary care property 30