The recent union of Primary Healthcare Properties and MedicX may have replaced Assura (AGR) as the UK’s largest healthcare-focused real estate investment trust (Reit), but Jonathan Murphy is unfazed. In fact, Assura’s chief executive thinks it’s “great news for the sector”, and cites wider press and analyst coverage as just two positives from the deal.
Amid a wobbly wider UK property market, the sub-sector’s star was already rising, powered by a mixture of ideal long-term tenants, robust pipelines and manageable debt positions.
That recognition also has some drawbacks. Assura reported a 21 basis point dip in the net equivalent yield to 4.77 per cent in the year to March, while the net initial yield has dropped from 4.8 to 4.74 per cent. The flipside to this was a 1.5 per cent like-for-like revaluation gain in the underlying portfolio in the year.
Acquisitions and new developments therefore explain the 14 per cent rise in the value of the portfolio, which stands at 563 properties following £240m-worth of additions in FY2019. Looking ahead, the pipeline has been extended by up to £92m, following the acquisition of primary care developer GPI, which was announced with these results. An in-house team, which works directly with GPs and sources many transactions off-market, is another potential source of growth and provides one differentiator to PHP.
Analysts at Liberum forecast diluted net asset value of 54p per share by March 2020, rising to 54.8p 12 months later.
| ASSURA (AGR) | ||||
| ORD PRICE: | 62.7p | MARKET VALUE: | £1.5bn | |
| TOUCH: | 62.5-62.7p | 12-MONTH HIGH: | 62.7p | LOW: 52.4p |
| DIVIDEND YIELD: | 4.2% | TRADING PROP: | £17.6m | |
| PREMIUM TO NAV: | 17% | |||
| INVESTMENT PROP: | £1.98bn | NET DEBT: | 52% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 44.9 | 36.6 | 4.9 | 1.90 |
| 2016 | 46.1 | 28.8 | 2.2 | 2.05 |
| 2017 | 49.4 | 95.2 | 5.8 | 2.25 |
| 2018 | 52.5 | 71.8 | 3.7 | 2.46 |
| 2019 | 53.4 | 84.0 | 3.5 | 2.65 |
| % change | +1.7 | +17 | -5 | +8 |
| Ex-div: | 13 Jun | |||
| Payment: | 17 Jul | |||
