RESULTS FOR THE YEAR ENDED 31 MARCH 2015
INTRODUCTION Graham Roberts 2 Results for the Year Ended 31 March 2015
THREE YEAR PROGRESS Scale 2015 Rent roll up 59% £56m Investment property up 72% £925m Net assets up 141% £452m Flexibility 2012 2015 Free cash/available facilities £12m £125m Unencumbered assets − £147m LTV 64% 48% Performance 2015 EPS 1 up 40% 2.1p NAV 1 per share up 24% 44.9p Dividends up 48% 1.85p 1 EPRA basis (appendix 5) 3 Results for the Year Ended 31 March 2015
TRANSFORMATIONAL YEAR 46% underlying profit growth £245m of medical centre additions Portfolio now £925m (up 41%) Leverage reduced from 62% to 48% Equity raise of £175m (net) £105m invested in medical centres £57m of debt redeemed Joined EPRA/NAREIT index New UK plc holding company Quarterly dividend increased 11% in November 2 pence per share, annual basis Fully covered 4 Results for the Year Ended 31 March 2015
FINANCIAL RESULTS Jonathan Murphy 5 Results for the Year Ended 31 March 2015
FINANCIAL HIGHLIGHTS Income statement 2015) 2014) % change) Net rental income (£m) 48.2) 37.8) 28) Underlying profit before tax (£m) 15.9) 10.9) 46) Underlying profit per share (p) 2.1) 2.1) -) Balance sheet 31 March 2015) 31 March 2014) % change) Investment property (£m) 925.3) 656.7) 41) EPRA NAV (pence per share) 44.9) 43.4) 3.4) LTV (%) 48.3) 62.0) (22) Returns 2015) 2014) % change) Dividend per share (p) 1.85) 1.36) 36) Total Property Return (%) 7.8) 7.9) (1) Total Accounting Return (%) 7.7) 15.9) (52) 6 Results for the Year Ended 31 March 2015
33% GROWTH IN ANNUALISED RENT ROLL 14.4 years weighted average unexpired lease term, 87% NHS funded £m 60 12.5 55 50 45 1.3 0.1 55.6 (0.1) 40 41.8 35 30 Mar-14 Disposals Lease events Completed Acquisitions Mar-15 developments 7 Results for the Year Ended 31 March 2015
46% GROWTH IN UNDERLYING PROFIT Operational efficiency and scale benefits have enabled profit growth ahead of income growth £m 18 10.4 16 14 12 10 8 15.9 6 (4.7) 10.9 (0.7) 4 2 0 Mar-14 Net finance costs Admin expenses Net rental income Mar-15 8 Results for the Year Ended 31 March 2015
EPRA NAV PER SHARE MOVEMENT 46p 2.8p 45p 44p 43p 0.1p 2.1p 42p 1.4p 41p 44.9p 43.4p 40p 1.9p 39p 38p 37p Mar-14 Other Share issue Dividends Income (underlying Capital Mar-15 profit) (revaluations) 9 Results for the Year Ended 31 March 2015
41% INCREASE IN INVESTMENT PROPERTY 2015 2014 Net initial yield 5.56% 5.98% Equivalent yield 5.77% 6.07% £m 1,000 231.0 900 800 21.4 14.0 2.2 700 600 500 925.3 400 656.7 300 200 100 0 Mar-14 Other Development costs Revaluation gain Acquisitions Mar-15 10 Results for the Year Ended 31 March 2015
STRONG AND GROWING BALANCE SHEET £269m increase in investment property Property and debt Loan to value of 48% within our target £m Investment property Net debt 1000 range of 45% to 55% 900 925.3 £125m of available facilities and cash 800 Positioned strongly for future growth 700 656.7 600 557.3 500 450.0 400 414.8 359.5 300 200 100 0 Mar-13 Mar-14 Mar-15 11 Results for the Year Ended 31 March 2015
FINANCING Significant refinancing completed since fund raise in October £57m facility with Santander redeemed £177m of Aviva facilities restructured resulting in 42bps reduction in rates on these loans New revolving credit facility secured from three lenders: £60m facility 170bps initial margin variable rate five year term 12 Results for the Year Ended 31 March 2015
HEALTHY FINANCING RATIOS 31 March 2015 31 March 2014 Net debt (£m) 450.0 414.8 Loan to value 48% 62% Cash/undrawn facilities (£m) 95.3 27.6 Weighted average interest rate 5.28% 5.28% Weighted average debt maturity 11.9 years 10.9 years Interest cover 160% 150% % of debt at fixed rates 100% 98% 13 Results for the Year Ended 31 March 2015
GROWTH AND SCALE BENEFITS Increased scale has delivered cost Dividends and costs efficiencies p Dividends paid EPRA Cost Ratio (left axis) (right axis) Track record since March 2013: 2.4 24.0% EPRA Cost Ratio has fallen from 23% 2.0 22.0% to 18% 1.85 Costs as a % of average asset value 1.6 20.0% have fallen from 0.89% to 0.72% 115% growth in dividends paid 1.36 1.2 18.0% Progressive, covered dividend policy 0.8 16.0% 0.86 0.4 14.0% 0 12.0% Mar-13 Mar-14 Mar-15 14 Results for the Year Ended 31 March 2015
PROPERTY UPDATE Andrew Darke 15 Results for the Year Ended 31 March 2015
SUBSTANTIAL GROWTH IN YEAR £269m increase in portfolio value March 2015 March 2014 £245m additions Investment property £925.3m £656.7m 5.6% average yield on cost Rent roll £55.6m £41.8m WAULT 14.4 years 14.4 years Weighted average unexpired lease term of 17 years on new additions Consideration Timing Acquisitions have refinancing and MP Realty £107m Jun 2014 asset enhancement opportunities One Life £12m Jul 2014 Solicitors instructed on a further Metro £63m Nov 2014 £40m of acquisitions South Kirkby £10m Dec 2014 2.4 million patients registered with Other £39m Various our GP tenants in 265 properties Developments £14m Various Property additions £245m 16 Results for the Year Ended 31 March 2015
DEVELOPMENTS COMPLETED DURING YEAR Achieved in excess of 100 bps margin over Completed revaluation yield on completed Number of schemes 4 developments Development cost £19.6m In ‐ house experienced development team ERV £1.4m Margin over revaluation yield >100 bps Sudbury 17 Results for the Year Ended 31 March 2015
FUTURE DEVELOPMENT SCHEMES Long term requirement for country Immediate On-site pipeline to invest in new medical centres Number of schemes 5 9 Future pipeline of £35m – Development cost £22.2m £25m preferred developer status Following NHS reorganisation in April 2013, NHS England is now starting to approve developments Sutton 18 Results for the Year Ended 31 March 2015
APPROACH TO DESIGN Securing approval on new schemes – one of many benefits of in ‐ house development Unique and bespoke Site influences Inside ‐ out approach Sense of wellbeing Natural surveillance Environmental Sustainability 19 Results for the Year Ended 31 March 2015
RENT REVIEW GROWTH RPI and fixed are currently the main drivers 3 year rent review settlements of rental growth 1.0 RPI and fixed +3.06% 0.9 0.8 0.38% open market +0.38% Absolute rent roll increase (£m) 0.7 Land and construction cost inflation 0.35% 0.6 returning 3.06% 0.5 Less rental evidence for rent reviews due to recent hiatus in NHS approval process 0.4 4.52% 0.3 1.99% 0.2 3.23% 0.1 0.0 RPI/fixed/other OMR (25% of rent roll) (75% of rent roll) 2012/13 2013/14 2014/15 20 Results for the Year Ended 31 March 2015
MARKET AND OUTLOOK Graham Roberts 21 Results for the Year Ended 31 March 2015
MARKET OVERVIEW Medical centre returns exhibit lower Yield development volatility than commercial property and 8% Gilts 7% Healthy premium over equivalent 6% maturity Gilt >360bps Low point for rental growth 5% RPI forecast to recover 4% open market reviews to reflect 3% construction recovery 2% IPD monthly UK index initial yield 1% Assura Net Initial Yield 15 year Gilt 0% 22 Results for the Year Ended 31 March 2015
HEALTH SECTOR OUTLOOK Cross party support for primary care investment continues “A vision of a modern NHS working for you Election result favourable from a timing perspective 7 days of the week – leadership already understands the primary care when you need it, problem where you need it. has already committed funding to back new premises And that begins with backed the NHS leadership Five Year Forward View a transformation of primary care” Pace of acceleration in development approvals hinges on David Cameron CCGs engagement 18 May 2015 Assura has received its first approval under new regime There will remain a time lag between approval and delivery, typically 18 months to 2 years 23 Results for the Year Ended 31 March 2015
OUTLOOK FOR ASSURA Attractive long term opportunity Assura well placed skills, structure, scale brand recognition with GPs Our three priorities are: delivering growth capturing further asset management opportunities maintaining low cost base Delivering a secure and growing dividend 24 Results for the Year Ended 31 March 2015
Q&A Blaenavon Birkenhead Huthwaite 25 Results for the Year Ended 31 March 2015
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