Assura expanding after equity raise

Healthcare real estate investment trust Assura was pressing ahead with its expansion plans on Tuesday, updating the market on its activities since a significant equity raise late last year.

In the trading update for the period 1 October 2015 to 8 February 2016, the company said it completed a £300m equity raise on 11 October, net of expenses, to fund further acquisitions and developments.

"This strengthened financial position improves Assura's standing with its primary customers in the NHS and GPs, greatly increases its ability to take advantage of the considerable ongoing opportunities in the sector and provides scope for negotiating better terms and pricing on future debt facilities", Assura's board said in a statement.

Since the raise, the proceeds were applied in a reduction of long-term debt by £181m, the temporary repayment of the revolving credit facility of £35m and 12 property additions with a gross value on completion of £39m.

The £181m debt redemption was with Aviva Commercial Finance, and carried with it early repayment costs of £34m.

Assura said its annualised rent roll was now £61.8m, up from £59.6m in September 2015, with growth driven primarily by acquisitions. Its weighted average annual rent increase was 1.4%.

"As outlined to investors at the time of the recent fundraise a key objective was to strengthen the financial position of Assura, and a new medium term target loan to value ratio of 40% to 50% was announced", the board explained.

Assura's current loan to value ratio was below 30%, giving it plenty of room for significant further investment. It currently had £120m of undrawn facilities.

The company's quarterly dividend was increased by 10% for the January 2016 payment to 0.55p per share, or 2.2p per share on an annualised basis. At the time Assura also introduced a scrip alternative for shareholders.

"There has been a renewed emphasis from the NHS and politicians recently on addressing the chronic shortage of primary care space in the UK", said chief executive Graham Roberts.

"Assura is ideally placed with the expertise, scale and financial flexibility to support this essential investment in our nation's primary care infrastructure", he added.

In a separate announcement on Tuesday morning, the board of Assura announced to the market that the company's chief executive, Graham Roberts, had been diagnosed with cancer.

He was continuing to receive treatment and remained actively involved in running the business, it said.

"We have a clear strategy, and Graham is well-supported in delivering this by the first-class management team that he has developed", said chairman Simon Laffin.

"I shall be able to provide executive oversight if required. We all wish Graham well in his treatment and recovery", he added.