Assura Group Limited Results Presentation Year ended 31 March 2010 - - PowerPoint PPT Presentation

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Assura Group Limited Results Presentation Year ended 31 March 2010 - - PowerPoint PPT Presentation

Feb 05, 2024 649 likes •912 views

Assura Group Limited Results Presentation Year ended 31 March 2010 Refocused & Streamlined Business 75.1% of medical services business sold to Virgin Healthcare Holdings Ltd Significant cost reductions with payroll alone reduced by

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SLIDE 1

Assura Group Limited

Results Presentation Year ended 31 March 2010

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SLIDE 2

Refocused & Streamlined Business

  • 75.1% of medical services business sold to Virgin Healthcare Holdings Ltd
  • Significant cost reductions with payroll alone reduced by £6.5m *
  • Reorganised management team with excellent property experience and track record

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* Gross payroll cost reduction between March 2009 and May 2010

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SLIDE 3

Significantly Improved Results

  • Revenues up 17% to £55.8m (2009: £47.6m)
  • Group trading profit from continuing operations up 156% to £13.3m (2009: £5.2m)
  • PBT from continuing operations £4.4m (2009: loss of £99.7m)
  • Our pharmacy business delivered a maiden full year profit of £3.9m*1 (2009: loss

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  • Our pharmacy business delivered a maiden full year profit of £3.9m

(2009: loss £7.6m) and is now sustainably profitable

  • Net assets of £164.2m (2009: £172.0m), equivalent to 60.9p (2009: 66.2p) per share*2
  • £24.6m cash in hand at year end (2009: £24.8m)

*1 Includes £1.3m reversal of license impairment and £1.1m profit on disposal of pharmacies *2 Adjusted diluted net asset value per Ordinary Share (excluding the notional mark to market value of the Company’s interest rate swap)

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SLIDE 4

Strong Property & Pharmacy Group

  • Investment portfolio increased 12% to £313.7m at 31 March 2010 from £278.9m at 31

March 2009

  • Gross rental income receivable at 31 March 2010 increased by 9% to £22.5m*1
  • 84% of rent reimbursed by NHS & average lease length is 17.1 years
  • Property portfolio outperformed IPD healthcare and all property indices

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  • 7 new developments valued at £36.9m completed in the year
  • 5 developments on site at year end with anticipated end value of £38.2m
  • 4 new health centre pharmacies opened in the year
  • Pharmacy revenues increased by 17%*2
  • LIFT consultancy revenue up 86% from £1.4m in 2008/09 to £2.6m in 2009/10

*1 Including the rental value of own premises *2 Excludes 50 per cent share of revenue derived from pharmacies owned in joint venture with GP Care Limited

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SLIDE 5

Summary of Results

  • Increased contributions from all divisions
  • Central costs reduced very significantly

especially around the end of the year

  • Central costs target below £2.5m in 2010/11

(excluding LTIP & depreciation)

2010 2009 £m £m Contribution - Operating profit before central costs Property Investment 18.7 13.4 Property Development (0.5) (0.9) Pharmacy 1.0 (1.0) LIFT operations 0.0 0.0 Total 19.2 11.5 Central costs (5.8) (8.5) 13.4 3.0 Property Disposal Profits (0.8) 1.9 Asset Disposal Profits 0.7 0.3

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  • Revaluations of investments £6.5m partially
  • ffset by development write downs
  • Goodwill impairment, restructuring costs and

premises provision make up much of the exceptional item

  • Finance costs reflect SWAP
  • Loss on sale of Assura Medical - £7.1m and

its loss in the period prior to its sale - £6.9m

Group Trading Profit 13.3 5.2 Property revaluations & gains 2.4 (58.2) Associates & Joint Ventures 2.1 (1.0) Other items 0.2 (0.5) Exceptional Items (8.8) (6.6) Operating Profit 9.2 (61.1) Net Finance Costs (4.8) (38.6) Profit before taxation from continuing operations 4.4 (99.7) Taxation 2.4 0.6 Loss for the year from coninuing operations 6.8 (99.1) Discontinued operations (14.0) (9.8) Loss for the year (7.2) (108.9)

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SLIDE 6

Segmental Results

  • Growing rent roll
  • Stable direct property costs – opportunity

for reduction

  • Property investment administration costs

significantly reduced – full effect visible in the current year

2010 2009 £m £m Property Investment Gross income 23.4 20.4 Direct costs (2.4) (1.7) Gross profit 21.0 18.7 Administrative expenses (2.3) (5.3) Net Profit 18.7 13.4 Property Development Administrative expenses (0.5) (0.9) Net Loss (0.5) (0.9) Pharmacy Revenue 31.2 26.7

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the current year

  • No property development gains in 2009/10
  • realised and unrealised gains expected

this year and next

  • Pharmacy gross margin %’age has held up

well

  • LIFT revenue has increased strongly and

is continuing to grow

Revenue 31.2 26.7 Cost of sales (21.9) (18.6) Gross profit 9.3 8.1 Administrative expenses (8.3) (9.1) Net Profit 1.0 (1.0) LIFT Revenue 2.6 1.4 Direct costs (0.4) (0.2) Administrative expenses (2.2) (1.2) Net Profit 0.0 0.0 Divisional contribution 19.2 11.5 Central costs (5.8) (8.5) 13.4 3.0 Property Disposal Profits (0.8) 1.9 Asset Disposal Profits 0.7 0.3 Group Trading Profit 13.3 5.2

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SLIDE 7

Balance Sheet Summary

  • Additions & revaluations in year partially offset

by selected disposals

  • The 2009 investment in Assura Medical was that

in its GP Cos; in 2010 this is our investment in Virgin Healthcare Holdings Limited

  • Many of our pharmacy licenses have been

gained through successful application rather

2010 2009 £m £m Investment Property 313.7 278.9 Under Construction 27.7 54.8 Premises/held for sale/WIP 18.7 21.8 Investment in Assura Medical 5.5 4.8 Investments in LIFT 12.2 9.5 Loan to Pharmacy JV 7.6 6.0 Goodwill - Pharmacy 15.7 13.3 Goodwill - Property development 20.0 24.8 Other fixed assets 4.5 12.5 425.6 426.4

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gained through successful application rather than acquisition

  • Property development goodwill supported by a

strong profitable pipeline

  • The SWAP “mark to market” liability was £17.3m

at 31 March 2010 but we are only paying interest based on 3.29% till 31 December 2011 and expect interest rates to rise over this period.

  • SWAP is neutral when long term rates rises to

4.59%

425.6 426.4 Cash 24.6 24.8 Debtors 10.3 9.7 Stock 1.7 1.6 Creditors - short term (21.9) (24.6) Bank debt - short term (6.5) (31.6) Bank debt - long term (249.3) (206.7) Other liabilities (20.3) (27.6) Net Assets (excluding "own shares") 164.2 172.0 NAV per share 53.6 56.2 Adjusted for SWAP 60.9 66.2

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SLIDE 8

Property

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SLIDE 9

Medical Centre Investments Growth

  • £332m portfolio, £22.5m rent roll*1, average net initial yield 6.02%
  • 84% PCT/GMS, 17.1 year weighted average lease length
  • £45m of medical centre developments on site at 31 March or due to commence

imminently

  • Annual increase in rent from 68 reviews settled was 3.5% (£564,000) and growth is

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  • Annual increase in rent from 68 reviews settled was 3.5% (£564,000) and growth is

continuing

  • Opportunity to reduce voids (£0.8m ERV and £0.7m cost saving) and direct property

costs (£2.4m)

  • Revaluation surpluses expected from good management, rental growth, voids filled -

any favourable yield shift will be a bonus

  • Resilient and valuable portfolio

*1 Including the rental value of own premises

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SLIDE 10

Portfolio Summary

Capital Value

  • No. of Investment

Properties Value £m Avge EY*

  • Initial Yield

6.02%

  • Reversionary Yield

6.61%

  • Equivalent Yield* (EY)

6.46%

  • Rent pa

£22.5m

  • Market Rent (ERV) pa

£24.8m (inc vacant space) 10 Properties £m £0 – £500k 28 £7.6 7.99% £500k – £1m 14 £9.9 7.48% £1m – £5m 59 £135.6 6.72% £5m – £10m 11 £84.9 6.33% £10m – £15m 3 £39.8 6.18% £15m + 2 £35.9 6.2% Total 117 £313.7 6.46%

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SLIDE 11

Income Type (£/pa)

6% 3% 7%

Portfolio Summary

  • 117 investment properties with 251

demised leases

  • Average property value: £2.8m
  • Largest property: 5.8% of portfolio value

(North Ormesby £19.3m)

  • Average GMS rent: £166 psm

61% 23%

GMS PCT Pharmacy Health Platform Other

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Income/Tenant split:

  • GPs: 61%
  • PCTs: 23%
  • Pharmacy: 6%
  • Health Platform: 3%
  • Other ( Mainly retail Malls): 7%
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Good Development Pipeline

  • 5 on site at year end with an end value of around

£38m

  • 1 commenced post y/e and 1 due to start with a

combined end value of £7m

  • Identified potential pipeline beyond - £83m

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  • Substantially pre-let with debt finance in place in

advance

  • 15 land bank sites with a value at 31 March of £11m
  • Rigorous cost control starting to deliver benefit
  • Best means of growing the investment portfolio
  • Development funding becoming more widely

available

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Excellent LIFT Investments

  • Major position in LIFT with 6 investments of 27% to 54%
  • £6.5m invested in 12% yielding loan stock
  • Equity stakes all expected to be profitable

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  • LIFT consultancy generated revenue of £2.6m in 2009/10 and growing
  • LIFT consultancy separable from core property business
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SLIDE 14

Pharmacy

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Profitable & Growing Pharmacy Business

  • 33 predominantly health centre pharmacies
  • Expect to buy in 50% of GP Care for nominal

consideration next year (7 pharmacies)

  • Stores maturing and revenue approaching £40m

including GP Care

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including GP Care

  • Targeting 5% EBITDA
  • We have the market-leading licensing team

– Licence sales – Goodwill creation

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SLIDE 16

Profitable & Growing Pharmacy Business

  • Compatible with Property business and can be

valued independently

  • Steady store opening strategy (4 new health

centre pharmacies opened last year and the next store opening in August)

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  • Value growing (significantly enhanced license

value growth)

  • Cash generative
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Group Overheads

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Reduced & Competitive Cost Base

  • Administration costs have reduced substantially (salaries alone by £6.5m)
  • Significant reductions have taken place close to the year end – full effects will be

seen in the current year

  • Property management costs targeted to be <3% of rent

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  • Corporate & central costs (excluding LTIP & depreciation) targeted to be <£2.5m
  • Property development team targeted to be <3% of annual development costs/costs
  • f sale
  • LIFT and Pharmacy absorb their own direct overheads
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SLIDE 19

Reduced & Competitive Cost Base

  • Pall Mall and Daresbury one wing (50%) closed
  • Headcount reduced from 203 at March 2009 (excluding pharmacy branch staff) to 72

in May 2010

  • The 72 includes pharmacy head office, LIFT consultancy, property management,

property development and central staff (including part time, NEDs and secondees)

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property development and central staff (including part time, NEDs and secondees)

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SLIDE 20

Reduced & Competitive Cost Base

  • Main Board
  • Reduced remuneration and two resignations
  • Executive Board (reduced to 5 from 7)

– Nigel Rawlings, CEO

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– Nigel Rawlings, CEO – Conor Daly, Company secretary, legal & pharmacy licensing – Andrew Darke, Property – Tim Davies, Pharmacy – Elaine Siew, LIFT

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SLIDE 21

Effective Debt Structure

  • Net debt of £232m
  • Less than £10m repayable before March 2013
  • Banks have continued to lend on our assets throughout the credit crunch on

competitive terms

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  • Diversification of banks with Santander (NAB down to £135m from £190m)
  • Assura’s debt well hedged and competitively priced – <4.8% to 6.4%, core at 5.24%

from September 2010 to 31 December 2011

  • Will cancel some long term SWAP when the time is right
  • SWAP is neutral when the long term rate rises to 4.59%
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Dividend

  • Group was profitable and cash positive excluding the medical services business

(now sold)

  • Anticipate dividends will be reinstated in 2010/11

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Strategy

  • Property development the best means to grow the investment portfolio
  • Active management, shrinking voids and direct property costs and growing rents
  • Pharmacy now sustainably profitable and will be grown

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  • REIT status under consideration (tax loss shelter in the mean time)
  • Land bank opportunities
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SLIDE 24

Summary & Outlook

  • During the year we have refocused on medical property and streamlined the business
  • At the same time we have delivered significantly improved figures
  • We have made good operational progress underpinned by our strong medical property

business and now profitable pharmacy business

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  • Significant cost reductions effected during the year and around the year end
  • Strategic options under active consideration
  • Poised to resume dividends
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SLIDE 25

Appendix - Timetable

  • 2nd March - Assura Medical sold
  • 31st March – Year end
  • 23rd April – Reorganisation completed

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  • 29th June – Year end results announced
  • 9th September – AGM
  • 2nd half November – Interim results