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Reassuring Assura

A government pledge to boost healthcare spending should be a boost for Assura.
May 22, 2015

It's not every company that can point to having unequivocal support from the secretary of state for health and the prime minister; with both having stressed the government's commitment to improving healthcare facilities. Small wonder, then, that primary care landlord Assura's (AGR) chief executive, Graham Roberts, was in upbeat mood at the release of full-year results.

IC TIP: Hold at 57.75p

Even without the political kick-start, Assura delivered a strong performance last year, boosting rental income by 28 per cent to £48.2m, driven by £230m of acquisitions. Profit was also boosted by a near doubling in the valuation uplift on the portfolio to £21.4m.

Rents on around a fifth of the portfolio have fixed or inflation-linked increases, and rose by an average of 3.06 per cent. However, a majority of the portfolio is subject to open market reviews, and growth here was a meagre 0.38 per cent. Rents are assessed on the cost of new-build centres, but with hardly any new approvals, it has been hard to impose these higher rents onto existing assets within the portfolio. But there are now signs that approval rates will start to accelerate.

Analysts at Liberum are forecasting adjusted net asset value of 45.8p per share by March 2016 (from 44p in 2015).

ASSURA (AGR)
ORD PRICE:57.75pMARKET VALUE:£581m
TOUCH:57.75-58.25p12-MONTH HIGH:62pLOW: 41p
DIVIDEND YIELD:3.5%TRADING PROPERTIES:£5.4m
PREMIUM TO NAV:29%NET DEBT: 100%
INVESTMENT PROPERTIES:£925m

Year to 31 MarNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201150.58.12.32.25
201235.5-63.3-13.51.25
201337.414.32.71.16
201442.824.24.51.505
201544.936.64.91.9
% change+5+51+9+11

Ex-div: 9 Jul*

Payment: 22 Jul

*Reflecting quarterly dividend of 0.5p a share