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Assura backs itself and reaps the rewards

Assura has shrugged off its reputation as a business afraid of growth
Assura backs itself and reaps the rewards
  • Reit debuts in Ireland
  • Rent roll and portfolio value are both up

In May 2020, Panmure Gordon forecast that Assura’s (AGR) net asset value would hit 56.9p per share by the end of March 2021 and rise to 57.9p in 2022. Its most recent annual results did not exactly smash those predictions, but they did beat them.

The real-estate investment trust has long been viewed as a steady income investment despite rental growth that has underwhelmed in recent years. However, thanks to a combination of the continued need for hospitals during the pandemic and the investments within its portfolio, the business has boomed of late. Over the course of the last financial year, it snapped up 47 properties at a cost of £271mn and as a result has seen a 12 per cent increase in its passing rent roll and a 12 per cent increase in the value of its property. The drive for growth means the company has also expanded into Ireland for the first time.

Encouragingly, Assura is planning to do more of the same over the next financial year – with a development pipeline of £522mn with a further 23 “asset enhancement projects”. It also wants to be “fully net zero carbon by 2040”. While green targets like this should rightly be viewed with scepticism by investors, the underlying message is clear: Assura is not afraid to spend more money for higher-quality properties – which is why all its development completions either have a BREEAM real estate sustainability rating of ‘Very Good’ or ‘Excellent’ and an Energy Performance Certificate of B or above.

A company that invests wisely is often a wise investment. Buy.

ASSURA (AGR)   
ORD PRICE:70.6pMARKET VALUE:£2.05bn
TOUCH:70.45-70.6p12-MONTH HIGH:80.6pLOW: 59.28p
DIVIDEND YIELD:4.2%TRADING PROP:NIL
PREMIUM TO NAV:16.7%NET DEBT:56%
INVESTMENT PROP:£2.75bn   
Year to 31 MarNet asset value (p)Pre-tax profit (£mn)Earnings per share (p)Dividend per share (p)
201852.571.83.702.46
201953.484.03.502.65
202054.078.93.302.75
202157.31084.102.82
202260.51565.602.93
% change+6+44+37+4
Ex-div:* 09 Jun   
Payment:**13 Jul   
*Dividends paid quarterly, so this is ex-dividend date for July quarter dividend **Payment date for July quarter