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Assura sparkles

Assura is growing its portfolio of surgeries, and also pushing through higher rents
November 25, 2014

Primary-care landlord Assura (AGR) will increase its next quarterly dividend to 0.5p a share, giving an annualised yield of 4.1 per cent. And thanks to a strong first-half performance, the dividend is fully covered by post-tax earnings, unlike at the company's sector peers.

IC TIP: Buy at 49p

Assura has been busy making acquisitions in what remains a highly fragmented sector. MP Realty Holdings was acquired for £107m and One Life for £12.3m. These and a £10.4m revaluation gain helped lift total property assets by 21 per cent to £809m during the six months.

Crucially, the rent roll - the annualised rental income at the balance-sheet date - rose 18 per cent to £47.6m. That was mainly thanks to acquisitions, but the group also successfully concluded 49 rent reviews, resulting in a weighted average annual rent increase of 1.72 per cent. Rental growth was boosted by a 4.46 per cent rise in RPI-linked rents, but the ongoing NHS reorganisation is giving landlords little negotiating power in open-market reviews; the average rental uplift on these was just 0.33 per cent.

Analysts at Liberum are forecasting adjusted book value of 45.2p per share by March 2015 (from 43.4p in 2014).

ASSURA (AGR)
ORD PRICE:49pMARKET VALUE:£484m
TOUCH:48-49p12-MONTH HIGH:51pLOW: 37p
DIVIDEND YIELD:3.7%TRADING PROP:£7.2m
PREMIUM TO NAV:9%
INVESTMENT PROP:£802mNET DEBT:203%

Half-year to 30 SepNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201339.212.22.20.61
201444.816.52.90.9
% change+14+35+32+49

Ex-div: 8 Jan*

Payment: 21 Jan*

*Provisional dates