TIDMAGR
RNS Number : 4969M
Assura PLC
24 May 2022
24 May 2022
Assura plc
Delivering continued growth
Assura plc ("Assura"), the leading primary care property
investor and developer, today announces its results for the year
ended 31 March 2022.
Jonathan Murphy, CEO, said:
"Assura has delivered another year of significant progress,
maintaining its strong financial performance and making a positive
contribution to the local communities in which it operates.
"We have grown our high-quality portfolio to GBP2.8 billion,
progressed our ambitious development pipeline which stands at over
GBP500 million and expanded our offering through working with NHS
Trusts, independent providers and making our first investment in
Ireland. Supported by our successful bond and equity raises -- with
accelerated use of proceeds -- we have continued to deliver
critical new capacity for community healthcare and fulfil the
ambitions of our extensive SixBySix social impact strategy.
"With the UK's healthcare estate lacking the critical buildings
and facilities to tackle the growing backlog of treatments
following the pandemic, we know the development of modern,
integrated, and high-quality primary care space is a key enabler in
reducing this pressure. This area benefits from cross-party
political support and Assura is committed to making a significant
contribution - all the while accommodating for key emerging trends,
including hybrid GP appointments, the requirement for mental health
support, and digitalisation.
"As the NHS seeks to become the world's first net-zero carbon
health system, Assura has continued to roll out initiatives to
deliver its strong sustainability plans that support all
stakeholders over the year.
"Against an uncertain economic backdrop, Assura's steady and
reliable business model, strong balance sheet and differentiated
market position means it is extremely well positioned to continue
growing and delivering shareholder value. We remain confident in
Assura's outlook for the coming year and beyond".
Another strong year delivering portfolio, earnings and dividend
growth
-- Passing rent roll increased 12% to GBP135.7 million (2021:
GBP121.7 million) with WAULT maintained at 11.8 years
-- Profit before tax grew 44% to GBP155.8 million (2021:
GBP108.3 million) with EPS up 37% at 5.6p (2021: 4.1p)
-- EPRA earnings up 14% to GBP86.2 million (2021: GBP75.4
million(1) ) and EPRA EPS of 3.1p (2021: 2.8p(1) )
-- Portfolio value rose 12% to GBP2,752 million (2021: GBP2,453
million) and Net Initial Yield ("NIY") at 4.48% (2021: 4.58%)
-- Proposed 5.4% increase in the quarterly dividend to 0.78 pence per share
Continuing to provide critical new capacity for community
healthcare
-- Growing portfolio of 645 high-quality properties (2021: 609)
serving 6.8 million people across the UK
-- Added 47 properties at a cost of GBP271 million (yield on
cost 4.6%, WAULT 19 years) and completed four asset enhancement
capital projects (GBP2.7 million)
-- Total development pipeline of GBP522 million(2) with a
further 23 asset enhancement projects (GBP18 million)
-- 11 properties sold for above book value proceeds of GBP15
million; GBP76m of assets held for sale
-- Lease re-gears completed on GBP1.3 million existing rent roll
with further GBP6.9 million in the pipeline
-- Rent reviews generated weighted average annual rent increase
of 1.9%(3) (absolute increase of 5.1% on rent roll reviewed)
-- Acquisition pipeline of 20 properties at cost of GBP119 million(4)
-- Total contracted rental income increased 15% to GBP1.81 billion (2021: GBP1.57 billion)
Strategic expansion into emerging opportunities
-- On site developments include scale projects for NHS Trusts and independent providers
-- Acquisitions supporting delivery of mental health services in a community setting
-- Strategic partnerships with two primary care at scale operators
-- First acquisition completed in Ireland and currently
exploring several opportunities for developments
We Build for Health; sustainability and social impact at the
heart of all decision-making
-- Further progress on our SixBySix social impact and sustainability strategy
-- Assura Community Fund distributed over GBP550,000 for health
improving projects around our buildings
-- EPC improvement programme commenced with 42 existing buildings upgraded to EPC B
-- All development completions rated BREEAM Very Good or Excellent and EPC B and above
-- Net Zero Carbon Development Design Guide launched and being
rolled out into development pipeline
-- Sustainability Bond issued under our Sustainable Finance Framework
Strong and diverse financial position
-- LTV of 36%, net debt of GBP1,006 million on a fully unsecured basis
-- All drawn debt on fixed rate basis - weighted average
interest rate reduced to 2.30% (2021: 2.47%) with weighted average
debt maturity unchanged at 8 years
-- Issued 12-year GBP300 million Sustainability Bond with coupon of 1.625%
-- Cash and undrawn facilities of GBP369 million
-- A- (stable outlook) rating from Fitch Ratings Ltd reaffirmed in January 2022
Summary results
Financial performance March 2022 March 2021 Change
Net rental income GBP126.5m GBP112.0m 12.9%
----------- ----------- --------
Profit before tax GBP155.8m GBP108.3m 43.9%
----------- ----------- --------
IFRS earnings per share 5.6p 4.1p 36.6%
----------- ----------- --------
EPRA earnings per share(1) 3.1p 2.8p 10.7%
----------- ----------- --------
Dividend per share 2.93p 2.82p 3.9%
----------- ----------- --------
Property valuation and performance March 2022 March 2021 Change
----------- ----------- --------
Investment property GBP2,752m GBP2,453m 12.2%
----------- ----------- --------
Diluted EPRA NTA per share 60.7p 57.2p 6.1%
----------- ----------- --------
Rent roll GBP135.7m GBP121.7m 11.5%
----------- ----------- --------
Financing March 2022 March 2021 Change
----------- ----------- --------
Loan to Value ("LTV") ratio 36% 37% (1)ppt
----------- ----------- --------
Undrawn facilities and cash GBP369m GBP272m 35.7%
----------- ----------- --------
Weighted average cost of debt 2.30% 2.47% (17)bps
----------- ----------- --------
(1) Comparator is Adjusted EPRA earnings per share, adjusted to
remove the GBP2.5 million contribution to the Assura Community Fund
in the year to March 2021
(2) Development pipeline GBP522 million: GBP166 million on site,
immediate pipeline GBP158 million, extended pipeline GBP198
million
Immediate development pipeline: schemes expected to be onsite
within 12 months
Extended development pipeline: Assura appointed exclusive
development partner, awaiting NHS approval
(3) Weighted average annual uplift on all settled reviews
(4) Acquisition pipeline in legal hands and expected to complete
within 3-6 months
Alternative Performance Measures ("APMs")
The highlights page and summary results table above include a
number of financial measures to describe the financial performance
of the Group, some of which are considered APMs as they are not
defined under IFRS. Further details are provided in the CFO Review,
notes to the accounts and glossary.
For further information, please contact:
Assura plc: Tel: 01925 945354
Jayne Cottam, CFO Email: Investor@assura.co.uk
David Purcell, Investor Relations Director
Finsbury: Tel: 0207 251 3801
Gordon Simpson Email: Assura@Finsbury.com
James Thompson
A presentation for investors and analysts, followed by live
Q&A, will be streamed at the link below on 24 May 2022 at
11.00am BST.
Webcast link:
https://webcasting.brrmedia.co.uk/broadcast/625e82ca841dd838fd0be3a3
In addition, the company will host a presentation with Q&A
for retail investors on the Investor Meet Company platform on
Thursday 9 June 2022 at 11.30am BST. Investors can sign up to
Investor Meet Company for free and add to meet
Assura plc via:
https://www.investormeetcompany.com/assura-plc/register-investor
Notes to Editors
Assura plc is a national healthcare premises specialist and UK
REIT based in Warrington, UK - caring for more than 600 primary
healthcare buildings, from which almost seven million patients are
served.
A constituent of the FTSE 250 and the EPRA* indices, as at 31
March 2022, Assura's portfolio was valued at GBP2,752 million.
At Assura, we BUILD for health. Assura builds better spaces for
people and places, invests in skills and inspires new ways of
working, and unlocks the power of design and innovation to deliver
lasting impact for communities - aiming for six million people to
have benefitted from improvements to and through its healthcare
buildings by 2026.
Assura is leading for a sustainable future, targeting net zero
carbon across its portfolio by 2040.
Further information is available at www.assuraplc.com
*EPRA is a registered trademark of the European Public Real
Estate Association.
Chairman's statement
Dear Shareholder,
"Why are we working with Assura? Because as much as I am a
generalist, they are the specialists...which means I can get on
with what I'm good at, which is providing high quality local health
services."
These words from one of our GP customers this year capture the
essence of the partnership Assura creates with the NHS. Our work
enables NHS teams to do theirs. The NHS's demand for space and
capacity - to tackle the COVID backlog; to redesign and
future-proof its premises for hybrid care; and to head towards its
net zero goals
- is unrelenting, and this year 'the Assura way' has continued
to set us apart.
It starts, of course, with you. It is your support for, and your
engagement with, this business to deliver for key public
infrastructure, for the environment and for our society which are
growing its financial strength. This year's GBP300 million
Sustainability Bond was another first for Assura, and we are busily
deploying the proceeds into exciting projects for our NHS partners
which meet our joint ambitions.
We are reporting on another strong financial performance, which
you can read about in Jonathan's statement. We completed some of
the biggest financial deals in our history, including the landmark
Northumbria Health and Care Academy at Northumbria Specialist
Emergency Care Hospital - demonstrating Assura's ability to
innovate with the health service to deliver the new generation of
infrastructure which provides vital connections between acute
services, primary and community care.
The Assura way is charting our course to net zero, so that you
can clearly see the actions we intend to take, when and why. The
NHS's estate faces unique and complex challenges to reach net zero:
we must play our full part in helping it get there. While our
customers grapple with what the journey to net zero means for them
and their operations, we are digging deeper, to see what more our
buildings can do to support them. In this report you'll be able to
see some of the progress we've made this year on our roadmap for
our portfolio and to bring together our design guide for net zero
carbon healthcare buildings. It is another example of the Assura
way, ensuring that our plans and decision-making are underpinned by
evidence and scrutinised with rigour.
The Assura way is as a thought leader: we have continued to work
with our customers, suppliers and wider partners this year on the
evolution of our surgery of the future vision: of the community
health hub space which will underpin the future of hybrid care and
increased diagnostic capacity away from hospital, create the
workplaces which NHS staff deserve and play a key part in the
levelling up agenda for health and care. From our development of
our detailed social impact and sustainability strategy and our
collaboration with specialist partners on our entry to this year's
Wolfson Economics Prize, through to finalising our tool for
designing primary care environments which are truly inclusive for
people with disabilities and neurodiversity, we are shaping the
future through our innovation for the fabric, the feel and the
further impact that our buildings can have.
The Assura way is delivering for communities beyond our
buildings: this year saw our award-winning Assura Community Fund
move past the GBP1 million milestone for funds distributed to micro
health projects around the country - many designed to tackle the
mental health needs of those already most impacted by health
inequalities, which have deepened during the pandemic.
The Assura way focuses on our people. Just as we supported our
customers in their delivery of three waves of vaccinations to
millions of people around the country, we continued to support our
team through the professional and personal challenges of further
lockdowns, a return to office working and the wider economic
pressures of the cost of living. Our diverse and skilled
non-executive team has been further bolstered by the additional
insight, skills and perspectives brought into the business by our
three new Non-Executive Directors who joined us this year.
We have evolved how we articulate 'the Assura way' this year, to
better reflect the purpose-driven business we are. You can read
more about it in the CEO's statement, and in the special section at
the front of the annual report.
I look forward to seeing many of you at our AGM in person once
again this year, to discuss the difference 'the Assura way' is
making.
Ed Smith CBE
Non-Executive Chairman
23 May 2022
CEO statement
I am proud to report another year of strong progress for Assura.
Despite a volatile economic backdrop, our team has worked hard to
deliver against our successful strategy and advance Assura's
positive growth trajectory.
We have continued to work through the challenges as the country
has "re-opened", adapting to new ways of working and collaborating
face-to-face as well as supporting our NHS customers as their
operations transition to 'living with COVID'.
We have delivered significant portfolio growth - through both
additions (39 acquisitions and eight completed developments) and
asset enhancements (four completed capital projects, a further
seven on site and 22 lease regears).
In its second year, we have made strong progress against our
social impact and sustainability strategy, SixBySix: the rollout of
our EPC improvement works has commenced, we have completed our Net
Zero Carbon Design Guide for our developments and our award-winning
Assura Community Fund has again supported more than 100 projects
all over the country.
But the NHS continues to face significant challenges, many only
exacerbated by the pandemic. The volume of demand for NHS services
has never been greater; clinical workforce and capacity cannot keep
pace with that growth and the NHS estate is simply not in shape to
accommodate evolving services and delivery.
It's against that backdrop that we've reflected on the role we
want to play in supporting the NHS to rise to these challenges.
Subsequently, we've evolved the way we describe our purpose: "We
BUILD for health" and our BUILD principles describe the breadth and
depth of our approach to the role of the estate in enabling the NHS
to do its work, with our net zero carbon ambition at its heart.
We have also started growing our portfolio in new ways, moving
on site with development schemes directly let to NHS Trusts in the
North East and the Midlands, working with independent healthcare
partners to the NHS on schemes in the South East and North West,
and we made our first acquisition in Ireland.
We are once again indebted to the continued support from our
investors with GBP185 million raised from our equity investors in
November and GBP300 million from the successful launch of our
Sustainability Bond in June. Deployment of these funds has been
ahead of our initial expectations.
We BUILD for health
Our evolved purpose doesn't change our strategy or business
model. We have refreshed the wording to more clearly articulate
what's important to us about the way in which we continue to grow
our impact financially, environmentally and socially.
Building better futures for people and places. Unlocking the
power of design and innovation. Investing in skills and inspiring
new ways of working. Leading for a sustainable future. Delivering
lasting impact with communities. Each of our BUILD principles
defines a different aspect of the way we work and the impact we
want to deliver for our stakeholders.
Financial and operational performance
Assura's business is built on the reliability and resilience of
our long-term, secure cash flows. These are supported by a weighted
average unexpired lease term of 11.8 years and a strong financial
position (demonstrated by our A- credit rating from Fitch Ratings
Ltd).
While remaining resilient, Assura has consistently demonstrated
an ability to identify and secure new opportunities for growth,
building on our market-leading capabilities to manage, invest in
and develop outstanding spaces for health services in our
communities.
We have continued our strong track record of investing in new
properties, completing 39 acquisitions for a total consideration of
GBP234 million throughout the year. Our investment team continues
to leverage the relationships we have with existing occupiers to
identify new opportunities, as well as analysing our bespoke
database which contains details on all the medical centres in the
UK.
The design of modern fit-for-purpose GP surgeries has always
been a cornerstone of our development activities and we have
delivered over GBP485 million of new developments and improvements
to existing properties over 19 years. We have had another strong
year with eight development completions and a further nine schemes
moving on site. The recent challenges in the construction industry,
with significant cost inflation and delays in the supply chain,
have primarily impacted us with schemes typically facing a
two-three month extension in the build period. In our immediate
pipeline we are carefully balancing the cost of the schemes and the
rents negotiated with the NHS.
Assura has a high-quality portfolio of 645 properties, which has
been assembled over the course of our 19-year history. An essential
part of our growth strategy is the careful review of every asset
for opportunities to enhance its lifetime cash flows and impact on
the community. Reflecting the importance of this activity, total
contracted rental income is set as one of our key strategic KPIs.
This metric is a combination of our passing rent roll and lease
length, providing an effective measure of our ability to both grow
and extend our cash flows for the long term. It captures the
crucial value-enhancing activity of our portfolio management teams
as they agree rent reviews, complete lease re-gears, let vacant
space and undertake physical extensions. This year, the team
completed 308 rent reviews, 22 lease re-gears and nine new
tenancies for our vacant space. This has enabled us to increase our
total contracted rental income to GBP1.81 billion and maintain our
weighted average unexpired lease term which stands at 11.8
years.
The combination of these elements has enabled us to continue our
strong track record of growth year-on-year. Our portfolio has
increased by 12% to GBP2,752 billion and our passing rent roll is
up 12% to GBP136 million. Our adjusted EPRA earnings have increased
by 14% to GBP86.2 million which translates to an EPRA EPS of 3.1
pence per share. Taking into account the positive valuation
movements, our net profit is GBP155.9 million or 5.6 pence per
share. Finally, the resilience of our income and the growth we have
delivered is reflected in our dividend payments. Today, we announce
a 5% increase in the quarterly dividend payment to 0.78 pence with
effect from the July 2022 payment, our ninth consecutive year of
increased dividend.
Development pipeline
In house Forward fund Total
# GBPm # GBPm # GBPm
--- ----- ---- -------- ----
On site 10 71 7 95 17 166
--- ----- ---- -------- ----
Immediate 19 155 1 3 20 158
--- ----- ---- -------- ----
Extended 19 130 7 68 26 198
--- ----- ---- -------- ----
Total 48 356 15 166 63 522
--- ----- ---- -------- ----
Assura outlook
Assura's success, and its strategy, is built on our
complementary offer of investment, development and management of
premises to our customers - underpinned by our purpose-led approach
which seeks to maximise impact for society and minimise impact on
the environment. This multifaceted approach enables us to better
understand the requirements of our customers and anticipate their
future needs. Having demonstrated its effectiveness and resilience,
we have a proven business model focused on delivering sustainable
growth for the long-term.
We once again enter the new financial year with a strong
immediate pipeline. Acquisition opportunities in legal hands total
GBP119 million and we have GBP18 million of asset enhancement
capital projects either on site or in legal hands. In development,
we are on site with a record 17 schemes with a gross development
spend of GBP166 million, an immediate pipeline of GBP158 million of
development opportunities that are expected to commence within the
next 12 months, and an extended pipeline of GBP198 million of
further opportunities where Assura is the exclusive partner.
Following our strategic acquisitions of Apollo and GPI in recent
years, most of our development pipeline will be delivered
in-house.
Our strategic expansion into premises enabling the delivery of
community-based services away from hospitals is flowing through
into our pipelines. We are now on site with a GBP25 million
multi-use facility for the Northumbria Healthcare NHS Foundation
Trust in Cramlington; a GBP22 million state-of- the-art facility
for West Midlands Ambulance Service University NHS Foundation Trust
in Oldbury; and a GBP31 million cancer diagnostic and treatment
centre for GenesisCare in Guildford. These schemes demonstrate our
ability to work with a range of partners in delivering
game-changing facilities for NHS care, as well as for schemes of
scale: these represent our three largest developments to date.
We have also made our first acquisition in the Irish market, a
modern asset in Castlebar for which we are also working on a
significant extension opportunity. The Irish market offers us
another growth avenue with a very similar risk profile, and our
initial conversations have yielded some forward funding
opportunities that we are hopeful of progressing over the next few
months.
We remain well funded to support our future growth plans. We
currently have cash and undrawn committed facilities totalling
GBP369 million having completed well-supported equity and debt
raises during the previous 12 months and have identified GBP76
million of assets that we are actively seeking to dispose of to
recycle the capital. This financial strength further underpins our
future growth prospects.
Market outlook
The critical need for investment in the infrastructure that
supports the services delivered by the NHS is as pronounced as it
has ever been. Waiting lists are longer than they have been for
decades because hospitals are overburdened, and appropriate space
doesn't exist in a community setting to deliver care where it is
needed.
The existing NHS estate is not fit for purpose and requires
significant investment to meet this demand. Healthcare
professionals openly admit that the premises they work in are
constraining the services they can provide, hindering
recruitment of additional staff and holding back progress on
tackling the care backlog. So it is not surprising that 98% of
Primary Care Network clinical directors feel more investment is
needed for primary care premises.
The restructuring of the NHS into Integrated Care Partnerships
in the coming months provides an opportunity for greater
collaboration across health professionals, services and estate -
with scope to improve individual patient experiences and reduce
health inequalities.
The NHS has ambitious targets to become the world's first net
zero carbon health system, but this is not yet filtering down to
plans on how this will be implemented and paid for across the
existing estate. Our role is to be an expert partner to bridge
those gaps and share our learnings with the NHS, always pushing the
bar higher at our buildings and through our impact - using our
unique expertise and financial capacity to deliver.
Jonathan Murphy
CEO
23 May 2022
CFO Review
It has been another strong year for Assura; leveraging the
strength of our balance sheet to continue growing our portfolio and
driving scale benefits, particularly in our cost of debt.
We are delighted to have received continued, strong support from
our debt and equity holders during the year; successfully launching
a GBP300 million Sustainability Bond in June 2021 and raising
GBP185 million of equity in November 2021.
The pace of our deployment of these proceeds has been ahead of
our initial expectations, with strong acquisition and development
activity, including progress within several emerging areas we have
identified for future growth.
Alternative Performance Measures ("APMs")
The financial performance for the period is reported including a
number of APMs (financial measures not defined under IFRS). We
believe that including these alongside IFRS measures provides
additional information to help understand the financial performance
for the period, in particular in respect of EPRA performance
measures which are designed to aid comparability across real estate
companies. Explanations to define why the APM is used and
calculations of the measures, with reconciliations back to reported
IFRS measured normally in the Glossary, are included where
possible.
In particular, in the prior period we disclosed an adjusted EPRA
earnings measure (see Note 4). This was introduced to exclude the
one-off impact of the GBP2.5 million contribution to the Assura
Community Fund in the period, so as to ensure readers of the
accounts could continue to understand the underlying, recurring
earnings of the property rental business.
Portfolio as at 31 March 2022 GBP2,751.9 million (2021:
GBP2,453.3 million)
Our business is based on our investment portfolio of 645
properties (2021: 609).
This has a passing rent roll of GBP135.7 million (2021: GBP121.7
million), 82% of which is underpinned by the NHS. The WAULT is 11.8
years and we have a total contracted rent roll of GBP1.81 billion
(2021: GBP1.57 billion).
At 31 March 2022 our portfolio of completed investment
properties was valued at a total of GBP2,750.3 million, including
investment properties held for sale of GBP76.0 million (2021:
GBP2,414.7 million and GBP14.3 million), which produced a net
initial yield ("NIY") of 4.48% (2021: 4.58%). Taking account of
potential lettings of unoccupied space and any uplift to current
market rents on review, our valuers assess the net equivalent yield
to be 4.72% (2021: 4.81%). Adjusting this Royal Institution of
Chartered Surveyors ("RICS") standard measure to reflect the
advanced payment of rents, the true equivalent yield is 4.74%
(2021: 4.83%).
Our EPRA NIY, based on our passing rent roll and latest annual
direct property costs, was 4.42% (2021: 4.54%).
2022 2021
GBPm GBPm
Net rental income 126.5 112.0
----- -----
Valuation movement 69.4 41.6
----- -----
Total Property Return 195.9 153.6
----- -----
Expressed as a percentage of opening investment property plus
additions, Total Property Return for the year was 7.1% (2021:
6.3%). This can be split as 4.6% from net rental income (2021:
4.6%) and 2.5% from valuation movement (2021: 1.7%).
The net valuation gain in the year of GBP69.4 million reflects a
3.4% uplift on a like-for-like basis net of movements relating to
properties acquired in the period. The valuation gain is split
equally between asset enhancement activities (due to both lease
regears and rent review uplifts) and the 9 basis point movement in
our equivalent yield.
The NIY on our assets continues to represent a substantial
premium over both the 10-year and 15-year UK gilts which traded at
1.61% and 1.813% respectively (2021: 0.845% and 1.22%
respectively).
Portfolio additions
We have invested significantly during the period, with this
expenditure split between investments in completed properties,
developments, forward funding projects, extensions and fit-out
costs enabling vacant space to be let as follows:
2022
GBPm
Acquisition of completed medical centres 233.5
-----
Developments/forward funding arrangements 62.1
-----
Capital interest 1.6
-----
Investment properties - no incremental lettable space 8.5
-----
Total capital expenditure 305.7
-----
We have completed 39 acquisitions and eight developments during
the year.
These additions were at a combined total cost of GBP271 million
with a combined passing rent of GBP12.3 million (yield on cost of
4.6%) and a WAULT of 19.0 years.
Investment activity
We continue to source properties that meet our investment
criteria for future acquisition. The acquisition pipeline stands at
GBP119 million, being opportunities that are currently in
solicitors' hands and which we would hope to complete within three
to six months, subject to satisfactory due diligence.
During the year, we disposed of 11 properties where we believed
there was lower growth prospects than the rest of our portfolio,
generating proceeds of GBP15.1 million at a premium over book value
of GBP0.3 million.
We continue to review our portfolio for any indication that
properties no longer meet our investment criteria and as at the
year end have GBP76 million of investment properties held for sale.
These properties are under offer and we expect to complete the sale
in Q1, generating proceeds to recycle into our pipelines.
Development activity
Of the 16 developments that were on site at March 2021, eight
have completed in the year. The remainder are due to complete
during 2022 including six (GBP28 million) in Q1.
The development team has continued to have success in converting
schemes from the pipeline to live schemes, with nine schemes moving
on site during the year meaning that 17 are on site at 31 March
2022.
Of the 17 developments on site at 31 March 2022, seven are under
forward funding agreements and 10 are in-house developments. These
have a combined development cost of GBP166 million of which
we had spent GBP65 million as at the year end.
Our development pipeline has continued to grow. The majority is
organic, generated by the strength of the relationships that our
development team hold, meaning the majority of our pipeline is in
house schemes.
In addition to the 17 developments currently on site, we have an
immediate pipeline of 20 properties (estimated cost GBP158 million,
which we would hope to be on site within 12 months) and an extended
pipeline of 26 properties (estimated cost GBP198 million, appointed
exclusive partner and awaiting NHS approval).
We recorded a revaluation gain of GBP4.0 million in respect of
investment property under construction (2021: GBP4.9 million).
Live developments and forward funding arrangements
Forward fund/ in Estimated Costs
house Principal tenant completion date Development costs to date Size
Beaconsfield In house GPs Q2 22 GBP6.8m GBP6.5m 1,668 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Brighton FF GPs Q2 23 GBP4.9m GBP1.9m 948 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Calne In house GPs Q3 23 GBP3.8m GBP0.9m 813 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Cardiff In house GPs Q3 22 GBP3.1m GBP1.4m 633 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Cramlington In house NHS Trust Q4 23 GBP25.3m GBP4.2m 6,500 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Guildford FF Independent Q4 23 GBP31.4m GBP2.8m 2,818 sq.m
provider
------------------ ------------------ ------------------ ----------------- -------- ----------
Hemel Hempstead In house GPs Q2 22 GBP5.1m GBP4.9m 997 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Kelsall FF GPs Q3 22 GBP3.0m GBP2.4m 700 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Kettering FF Independent Q2 23 GBP21.6m GBP3.6m 3,500 sq.m
provider
------------------ ------------------ ------------------ ----------------- -------- ----------
Nunthorpe In house GPs Q2 22 GBP2.2m GBP1.4m 565 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Portsmouth In house GPs Q2 22 GBP4.5m GBP4.3m 968 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Southampton In house GPs Q1 23 GBP7.0m GBP3.4m 1,385 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Stourport FF GPs Q2 22 GBP5.9m GBP4.2m 1,950 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Sutton In house GPs Q2 22 GBP3.2m GBP2.4m 664 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Wallsend In house GPs Q3 22 GBP10.4m GBP6.7m 2,794 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
West Midlands FF NHS Trust Q3 22 GBP22.3m GBP13.7m 7,081 sq.m
Ambulance Hub
------------------ ------------------ ------------------ ----------------- -------- ----------
Wolverhampton FF GPs Q3 23 GBP5.9m GBP0.9m 1,325 sq.m
------------------ ------------------ ------------------ ----------------- -------- ----------
Portfolio management
Our rent roll grew by GBP14.0 million during the year to
GBP135.7 million.
The growth came from acquisitions (GBP11.2 million), development
completions (GBP1.5 million) and portfolio management activity
including rent reviews (GBP2.2 million), offset by the rent
relating to disposals (GBP0.9 million).
During the year we successfully concluded 308 rent reviews
(2021: 320 reviews) to generate a weighted average annual rent
increase of 1.9% (2021: 1.5%) on those properties, which is a
figure that includes 18 reviews we chose not to instigate in the
year. These 308 reviews covered GBP37.9 million or 31% of our rent
roll at the start of the year and, on a like-for-like basis, the
absolute increase of GBP1.9 million is a 5.1% increase on this
rent. Our portfolio benefits from a 33% weighting in fixed, RPI and
other uplifts which generated an average uplift of 2.7% during the
period. The majority of our portfolio is subject to open market
reviews and these have generated an average uplift
of 1.4% (2021: 1.2%) during the period.
Our total contracted rental income, which is a function of
current rent roll and unexpired lease term on the existing
portfolio and on-site developments, has increased from GBP1.57
billion at March 2021 to GBP1.81 billion at March 2022, despite the
passage of time.
We grow our total contracted rental income through additions to
the portfolio and getting developments on site, but increasingly
our focus has been extending the unexpired term on the leases on
our existing portfolio ("re-gears").
The team has had success in delivering 22 re-gears in the
period, covering GBP1.3 million of rent roll and adding 10.5 years
to the WAULT for those particular leases (2021: 31 re-gears, GBP2.8
million of rent). We also have terms agreed on a pipeline of 49
re-gears covering a further GBP6.9 million of rent roll and these
are currently in legal hands.
We have secured nine new tenancies with an annual rent roll of
GBP0.3 million and a pipeline in legal hands of six new tenancies
(rent GBP0.3 million). Our EPRA Vacancy Rate at March 2022 is 1.2%
(2021: 1.3%).
We completed four asset enhancement capital projects during the
year (spend GBP2.7 million) and are currently on site with a
further seven projects with a total capital spend of GBP7.4
million. In total we have a pipeline of 16 asset enhancement
capital projects we hope to complete in the next two years. These
have an estimated capital spend of GBP11.2 million, additional rent
of GBP0.8 million and improve the WAULT on those properties.
Our current rent roll is GBP135.7 million and, on a proforma
basis (i.e. assuming relevant figures are added to the rent roll as
it stands), would increase to approximately GBP167 million once the
acquisition pipeline and extended development pipeline are
completed plus anticipated rent reviews and asset enhancements
identified.
Administrative expenses
The Group analyses cost performance by reference to our EPRA
Cost Ratios (including and excluding direct vacancy costs) which
were 13.1% and 12.1% respectively (2021: 13.4% and 12.3%, excluding
one-off impact of Assura Community Fund donation in prior
year).
We also measure our operating efficiency as the ratio of
administrative costs to the average gross investment property
value. This ratio during the period equated to 0.45% (2021: 0.48%)
and administrative costs stood at GBP11.7 million (2021: GBP11.0
million).
Financing
As we continue to grow through acquisitions and developments, we
are delighted to have received support from both the debt and
equity markets.
In June 2021, following on from the launch of our debut Social
Bond in 2020, we successfully launched a GBP300 million, 12-year
Sustainability Bond which priced at a fixed interest rate of
1.625%. This was launched alongside our Sustainable Finance
Framework, which supports our SixBySix social impact strategy, and
the proceeds are to be used for investment in eligible
acquisitions, developments and refurbishment of publicly accessible
primary care and community healthcare centres.
Subsequently, in July 2021 we voluntarily took the option to
reduce the RCF to GBP125 million; benefitting from a reduction in
non-utilisation fees with the increased access to a range of debt
options as a result of our strong balance sheet and A- rating from
Fitch Ratings Ltd.
In November 2021 we completed an equity placing for GBP185
million.
Financing statistics 2022 2021
Net debt (Note 11) GBP1,006.4m GBP907.6m
----------- ---------
Weighted average debt maturity 8.0 years 8.0 years
----------- ---------
Weighted average interest rate 2.30% 2.47%
----------- ---------
% of debt at fixed/capped rates 100% 100%
----------- ---------
EBITDA to net interest cover 4.1x 3.9x
----------- ---------
Net debt to EBITDA 8.8x 9.3x
----------- ---------
LTV (Note 11) 36% 37%
----------- ---------
Our LTV ratio currently stands at 36% and will increase in the
short term as we utilise cash to fund the pipeline of acquisitions,
development and asset enhancement opportunities. Our LTV policy
allows us to reach the range of 40% to 50% should the need
arise.
At 31 March 2022, 100% of our facilities are at fixed interest
rates, although this will change as we draw on the RCF which is at
a variable rate. The weighted average debt maturity is 8.0
years.
As at 31 March 2022, we had undrawn facilities and cash
totalling GBP369 million. Details of the outstanding facilities and
their covenants are set out in Note 8.
Net finance costs presented through EPRA earnings in the year
amounted to GBP28.0 million (2021: GBP25.1 million), having
increased due to our additional borrowings funding the growth in
our portfolio.
IFRS profit before tax
IFRS profit before tax for the period was GBP155.8 million
(2021: GBP108.3 million). As can be seen below, adjusted EPRA
earnings have increased compared with the prior year. We have also
recorded an increased valuation gain following our positive asset
enhancement activities and valuation yield movement.
EPRA earnings
2022 2021
GBPm GBPm
Net rental income 126.5 112.0
------ ------
Administrative expenses (11.7) (13.5)
------ ------
Net finance costs (28.0) (25.1)
------ ------
Share-based payments and taxation (0.6) (0.5)
------ ------
EPRA earnings 86.2 72.9
------ ------
Add back one-off Assura Community Fund contribution - 2.5
------ ------
Adjusted EPRA earnings (exc. one-off donation) 86.2 75.4
------ ------
The movement in adjusted EPRA earnings (exc. one-off donation)
can be summarised as follows:
GBPm
Year ended 31 March 2021 75.4
-----
Net rental income 14.5
-----
Administrative expenses (0.7)
-----
Net finance costs (2.9)
-----
Share-based payments and taxation (0.1)
-----
Year ended 31 March 2022 86.2
-----
Adjusted EPRA earnings has grown 14.3% to GBP86.2 million in the
year to 31 March 2022 reflecting the property acquisitions and
developments completed as well as the impact of our asset
management activity with rent reviews and new lettings. This has
been offset by increases in administrative expenses and financing
costs.
Earnings per share
The basic earnings per share ("EPS") on profit for the period
was 5.6 pence (2021: 4.1 pence).
EPRA EPS, which excludes the net impact of valuation movements
and gains on disposal, was 3.1 pence (2021: 2.7 pence).
Based on calculations completed in accordance with IAS 33,
share-based payment schemes are currently expected to be dilutive
to EPS, with 1.2 million new shares expected to be issued. The
dilution is not material with no impact on EPS figures.
Dividends
Total dividends settled in the year to 31 March 2022 were
GBP80.4 million or 2.93 pence per share (2021: 2.82 pence per
share). GBP5.0 million of this was satisfied through the issuance
of shares via scrip.
As a REIT with requirement to distribute 90% of taxable profits
(Property Income Distribution, "PID"), the Group expects to pay out
as dividends at least 90% of recurring cash profits. Two of the
four dividends paid during the year were normal dividends
(non-PID), as a result of brought forward tax losses and available
capital allowances. The April 2021 and October 2021 dividends were
paid as a PID and future dividends will be a mix of PID and normal
dividends as required.
The table below illustrates our cash flows over the period:
2022 2021
GBPm GBPm
Opening cash 46.6 18.5
------- -------
Net cash flow from operations 94.6 77.4
------- -------
Dividends paid (75.4) (61.9)
------- -------
Investment:
------- -------
Property and other acquisitions (245.3) (236.8)
------- -------
Development expenditure (63.7) (56.9)
------- -------
Sale of properties 15.1 26.2
------- -------
Financing:
------- -------
Net proceeds from equity issuance 177.9 181.7
------- -------
Net borrowing movement 293.7 98.4
------- -------
Closing cash 243.5 46.6
------- -------
Net cash flow from operations differs from EPRA earnings due to
movements in working capital balances, but remains the cash earned
that is used to support dividends paid.
The investment activity in the period has been funded by the
proceeds from the November 2021 equity raise and the June 2021
Sustainability Bond issuance.
Diluted EPRA NTA movement
Pence per
GBPm share
Diluted EPRA NTA at 31 March 2021 (Note 5) 1,530.2 57.2
------- ---------
EPRA earnings 86.2 3.1
------- ---------
Capital (revaluations and capital gains) 69.7 2.5
------- ---------
Dividends (80.4) (2.9)
------- ---------
Equity issuance 182.6 0.8
------- ---------
Other 0.7 -
------- ---------
Diluted EPRA NTA at 31 March 2022 (Note 5) 1,789.0 60.7
------- ---------
Our Total Accounting Return per share for the year ended 31
March 2022 is 11.2% (2021: 11.4%) of which 2.93 pence per share
(5.1%) has been distributed to shareholders and 3.5 pence per share
(6.1%) is movement on EPRA NTA.
Jayne Cottam
CFO
23 May 2022
EPRA performance measures
As in previous years, we disclose in line with the EPRA Best
Practice Recommendations (latest version published October 2019).
We believe that publishing metrics in line with the industry
standard benchmarks improves the relevance of our accounts, in
particular aiding investors with comparability across real estate
companies.
Summary table
2022 2021
EPRA EPS (p) 3.1 2.7
---- ----
EPRA Cost Ratio (including direct vacancy costs) (%) 13.1 15.5
---- ----
EPRA Cost Ratio (excluding direct vacancy costs) (%) 12.1 14.5
---- ----
2022 2021
EPRA NRV (p) 66.7 63.2
---- ----
EPRA NTA (p) 60.7 57.2
---- ----
EPRA NDV (p) 62.7 56.0
---- ----
EPRA NIY (%) 4.42 4.54
---- ----
EPRA "topped-up" NIY (%) 4.43 4.55
---- ----
EPRA Vacancy Rate (%) 1.2 1.3
---- ----
Consolidated income statement
For the year ended 31 March 2022
2022 2021
------------------------------------ ---- ----------------------------- -----------------------------
Capital Capital
EPRA and non-EPRA Total EPRA and non-EPRA Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ ---- ------ ------------- ------ ------ ------------- ------
Gross rental and related
income 132.2 4.7 136.9 117.0 3.8 120.8
Property operating expenses (5.7) (4.7) (10.4) (5.0) (3.8) (8.8)
------------------------------------ ---- ------ ------------- ------ ------ ------------- ------
Net rental income 2 126.5 - 126.5 112.0 - 112.0
Administrative expenses (11.7) - (11.7) (13.5) - (13.5)
Revaluation gains 6 - 69.4 69.4 - 41.6 41.6
Gain on sale of property 6 - 0.3 0.3 - 0.9 0.9
Share-based payment charge (0.7) - (0.7) (0.5) - (0.5)
Finance income 0.4 - 0.4 0.2 - 0.2
Finance costs 3 (28.4) - (28.4) (25.3) (7.1) (32.4)
------------------------------------ ---- ------ ------------- ------ ------ ------------- ------
Profit before taxation 86.1 69.7 155.8 72.9 35.4 108.3
------------------------------------ ---- ------ ------------- ------ ------ ------------- ------
Taxation 0.1 - 0.1 - - -
------------------------------------ ---- ------ ------------- ------ ------ ------------- ------
Profit for the year attributable
to equity holders of
the parent 86.2 69.7 155.9 72.9 35.4 108.3
------------------------------------ ---- ------ ------------- ------ ------ ------------- ------
EPS - basic & diluted 4 5.6p 4.1p
EPRA EPS - basic & diluted 4 3.1p 2.7p
------------ ---------------------- ---- ------ ------------- ------ ------ ------------- ------
There were no items of other comprehensive income or expense and
therefore the profit for the year also reflects the Group's total
comprehensive income. All income arises from continuing operations
in the UK.
Consolidated balance sheet
As at 31 March 2022
2021 2020
Note GBPm GBPm
---------------------------------------------------------------- ---- ------- -------
Non-current assets
Investment property 6 2,751.9 2,453.3
Property work in progress 15.2 13.6
Property, plant and equipment 0.5 0.3
Investments 3.8 0.7
Deferred tax asset 0.6 0.5
---------------------------------------------------------------- ---- ------- -------
2,772.0 2,468.4
---------------------------------------------------------------- ---- ------- -------
Current assets
Cash, cash equivalents and restricted
cash 243.5 46.6
Trade and other receivables 28.6 27.4
Property assets held for sale 6 76.4 14.7
---------------------------------------------------------------- ---- ------- -------
348.5 88.7
---------------------------------------------------------------- ---- ------- -------
Total assets 3,120.5 2,557.1
---------------------------------------------------------------- ---- ------- -------
Current liabilities
Trade and other payables 44.9 40.7
Head lease liabilities 0.1 0.1
Deferred revenue 7 30.1 25.4
---------------------------------------------------------------- ---- ------- -------
75.1 66.2
---------------------------------------------------------------- ---- ------- -------
Non-current liabilities
Borrowings 8 1,244.4 948.7
Head lease liabilities 5.4 5.4
Deferred revenue 7 6.0 6.1
---------------------------------------------------------------- ---- ------- -------
1,255.8 960.2
---------------------------------------------------------------- ---- ------- -------
Total liabilities 1,330.9 1,026.4
---------------------------------------------------------------- ---- ------- -------
Net assets 1,789.6 1,530.7
---------------------------------------------------------------- ---- ------- -------
Capital and reserves
Share capital 9 294.8 267.2
Share premium 918.5 763.1
Merger reserve 9 231.2 231.2
Retained earnings 345.1 269.2
---------------------------------------------------------------- ---- ------- -------
Total equity 1,789.6 1,530.7
---------------------------------------------------------------- ---- ------- -------
NAV per Ordinary Share - basic 5 60.7p 57.3p
- diluted 5 60.7p 57.3p
EPRA NTA per Ordinary Share - basic 5 60.7p 57.3p
- diluted 5 60.7p 57.2p
---------------------------------------------------------------- ---- ------- -------
The financial statements were approved at a meeting of the Board
of Directors held on 23 May 2022 and signed on its behalf by:
Jonathan Murphy Jayne Cottam
CEO CFO
Consolidated statement of changes in equity
For the year ended 31 March 2022
Share Share Merger Retained Total
capital premium reserve earnings equity
Note GBPm GBPm GBPm GBPm GBPm
-------------------------------- ---- -------- -------- -------- --------- -------
1 April 2020 241.3 595.5 231.2 234.4 1,302.4
-------- -------- -------- --------- -------
Profit attributable to
equity holders - - - 108.3 108.3
-------- -------- -------- --------- -------
Total comprehensive income - - - 108.3 108.3
Issue of Ordinary Shares 9 24.2 161.8 - - 186.0
Issue costs 9 - (4.3) - - (4.3)
Dividends 10 1.6 10.1 - (73.6) (61.9)
Employee share-based incentives 0.1 - - 0.1 0.2
-------------------------------- ---- -------- -------- -------- --------- -------
31 March 2021 267.2 763.1 231.2 269.2 1,530.7
-------------------------------- ---- -------- -------- -------- --------- -------
Profit attributable to
equity holders - - - 155.9 155.9
-------- -------- -------- --------- -------
Total comprehensive income - - - 155.9 155.9
Issue of Ordinary Shares 9 26.9 155.7 - - 182.6
Issue costs 9 - (4.7) - - (4.7)
Dividends 10 0.6 4.4 - (80.4) (75.4)
Employee share-based incentives 0.1 - - 0.4 0.5
-------------------------------- ---- -------- -------- -------- --------- -------
31 March 2022 294.8 918.5 231.2 345.1 1,789.6
-------------------------------- ---- -------- -------- -------- --------- -------
Consolidated cash flow statement
For the year ended 31 March 2022
2022 2021
Note GBPm GBPm
---------------------------------------------- ---- ------- -------
Operating activities
Rent received 139.3 117.2
Interest paid and similar charges (25.0) (24.6)
Fees received 1.4 1.1
Interest received 0.4 0.2
Cash paid to suppliers and employees (21.5) (16.5)
---------------------------------------------- ---- ------- -------
Net cash inflow from operating activities 94.6 77.4
---------------------------------------------- ---- ------- -------
Investing activities
Purchase of investment property (241.8) (236.1)
Development expenditure (63.7) (56.9)
Proceeds from sale of property 15.1 26.2
Other investments and property, plant and
equipment (3.5) (0.7)
---------------------------------------------- ---- ------- -------
Net cash outflow from investing activities (293.9) (267.5)
---------------------------------------------- ---- ------- -------
Financing activities
Issue of Ordinary Shares 9 182.6 186.0
Issue costs paid on issuance of Ordinary
Shares 9 (4.7) (4.3)
Dividends paid (75.4) (61.9)
Repayment of loan/borrowings 8 (20.0) (190.0)
Long-term loans drawn down 8 315.9 298.1
Early repayment costs - (6.4)
Interest on head lease liabilities (0.1) (0.1)
Loan issue costs 8 (2.1) (3.2)
---------------------------------------------- ---- ------- -------
Net cash inflow from financing activities 396.2 218.2
---------------------------------------------- ---- ------- -------
Increase in cash, cash equivalents and
restricted cash 196.9 28.1
---------------------------------------------- ---- ------- -------
Opening cash, cash equivalents and restricted
cash 46.6 18.5
---------------------------------------------- ---- ------- -------
Closing cash, cash equivalents and restricted
cash 243.5 46.6
---------------------------------------------- ---- ------- -------
Notes to the accounts
For the year ended 31 March 2022
1. Corporate information and operations
The Company is a public limited company, limited by shares,
incorporated and domiciled in England and Wales, whose shares are
publicly traded on the main market of the London Stock
Exchange.
With effect from 1 April 2013, the Group has elected to be
treated as a UK REIT.
Basis of preparation
The financial information set out in this preliminary
announcement is derived from but does not constitute the Group's
statutory accounts for the years ended 31 March 2022 and 31 March
2021, and as such, does not contain all information required to be
disclosed in the financial statements prepared in accordance with
UK-adopted international accounting standards (IFRSs). The
financial information has been extracted from the Group's audited
consolidated statutory accounts. The auditor has reported on those
accounts: their reports were unqualified, did not draw attention to
any matters by way of emphasis, and did not contain statements
under s498(2) or (3) of the Companies Act 2006.
In concluding that the going concern basis of preparation is
appropriate for the period to 31 May 2023, the Board of Directors
have had reference to financial forecasts showing that borrowing
facilities are adequate, the Group can operate within these
facilities and meets its obligations when they fall due. The Group
has adequate headroom in its banking covenants and has been in
compliance throughout the previous 12 months. In reaching its
conclusion, the Directors have considered the specific impact of
Brexit, COVID-19 and climate change, concluding that none of these
are significant risks to the Group based on the current
position.
The Annual Report will be posted to Shareholders on or before 31
July 2022.
The Preliminary Announcement was approved by the Board of
Directors on 23 May 2022.
The Announcement and Annual Report can also be accessed on the
internet at www.assuraplc.com .
2. Net rental income
2022 2021
GBPm GBPm
-------------------------------- ----- -----
Rental revenue 130.8 115.9
Service charge income 4.7 3.8
Other related income 1.4 1.1
-------------------------------- ----- -----
Gross rental and related income 136.9 120.8
-------------------------------- ----- -----
2022 2021
GBPm GBPm
-------------------------------- ----- -----
Gross rental and related income 136.9 120.8
Direct property expenses (5.7) (5.0)
Service charge expenses (4.7) (3.8)
-------------------------------- ----- -----
Net rental income 126.5 112.0
-------------------------------- ----- -----
During the year, GBP0.2m of rental revenue was generated from
operations in Ireland (2021: nil).
3. Finance costs
2022 2021
GBPm GBPm
------------------------------------------------------ ----- -----
Interest payable 28.0 25.8
Interest capitalised on developments (1.6) (1.8)
Amortisation of loan issue costs 1.9 1.2
Interest on head lease liability 0.1 0.1
------------------------------------------------------ ----- -----
Total finance costs - presented through EPRA earnings 28.4 25.3
Write-off of loan issue costs - 0.7
Early repayment costs - 6.4
------------------------------------------------------ ----- -----
Total finance costs 28.4 32.4
------------------------------------------------------ ----- -----
Interest was capitalised on property developments at the
appropriate cost of finance at commencement. During the year this
ranged from 4% to 5% (2021: 4% to 5%).
4. Earnings per Ordinary Share
EPRA EPRA
Earnings earnings Earnings earnings
2022 2022 2021 2021
GBPm GBPm GBPm GBPm
------------------------------ -------- --------- -------- ---------
Profit for the year 155.9 155.9 108.3 108.3
------------------------------ -------- --------- -------- ---------
Revaluation gains (69.4) (41.6)
Gain on sale of property (0.3) (0.9)
Loan early repayment cost - -
------------------------------ -------- --------- -------- ---------
EPRA earnings 86.2 72.9
------------------------------ -------- --------- -------- ---------
Additional Company-specific
adjustment
Add back: One-off Assura
Community Fund contribution - 2.5
------------------------------ -------- --------- -------- ---------
Adjusted EPRA earnings (exc.
Community Fund contribution) 86.2 75.4
------------------------------ -------- --------- -------- ---------
EPS - basic & diluted 5.6p 4.1p
EPRA EPS - basic & diluted 3.1p 2.7p
Adjusted EPRA EPS (exc.
Community Fund contribution) 3.1p 2.8p
------------------------------ -------- --------- -------- ---------
2022 2021
--------------------------------------------------- ------------- -------------
Weighted average number of shares in issue 2,780,731,947 2,658,746,619
Potential dilutive impact of share options 1,225,519 1,637,671
--------------------------------------------------- ------------- -------------
Diluted weighted average number of shares in issue 2,781,957,466 2,660,384,290
--------------------------------------------------- ------------- -------------
The current number of potentially dilutive shares relates to
nil-cost options under the share-based payment arrangements and is
1.2 million (2021: 1.6 million).
The EPRA measures set out above are in accordance with the Best
Practices Recommendations of the European Public Real Estate
Association dated October 2019.
5. NAV per Ordinary Share
2022
GBPm IFRS EPRA NRV EPRA NTA EPRA NDV
------------------------- ------- -------- -------- --------
IFRS net assets 1,789.6 1,789.6 1,789.6 1,789.6
------------------------- ------- -------- -------- --------
Deferred tax (0.6) (0.6) -
Fair value of debt - - 59.4
Real estate transfer tax 179.3 - -
------------------------- ------- -------- -------- --------
EPRA adjusted 1,968.3 1,789.0 1,849.0
------------------------- ------- -------- -------- --------
NTA per Ordinary Share -
basic 60.7p 60.7p
- diluted 60.7p 60.7p
NRV per Ordinary Share -
basic 66.8p
- diluted 66.7p
NDV per Ordinary Share -
basic 62.7p
- diluted 62.7p
------------------------- ------- -------- -------- --------
2021
GBPm IFRS EPRA NRV EPRA NTA EPRA NDV
------------------------- ------- -------- -------- --------
IFRS net assets 1,530.7 1,530.7 1,530.7 1,530.7
------------------------- ------- -------- -------- --------
Deferred tax (0.5) (0.5) -
Fair value of debt - - (34.6)
Real estate transfer tax 158.8 - -
------------------------- ------- -------- -------- --------
EPRA adjusted 1,689.0 1,530.2 1,496.1
------------------------- ------- -------- -------- --------
NTA per Ordinary Share -
basic 57.3p 57.3p
- diluted 57.3p 57.3p
NRV per Ordinary Share -
basic 63.2p
- diluted 63.2p
NDV per Ordinary Share -
basic 56.0p
- diluted 56.0p
------------------------- ------- -------- -------- --------
2022 20.1
Number of shares in issue 2,948,359,637 2,671,853,938
Potential dilutive impact of share options 1,225,519 1,637,671
------------------------------------------- ------------- -------------
Diluted number of shares in issue 2,949,585,156 2,673,491,609
------------------------------------------- ------------- -------------
For definitions of the above EPRA NAV metrics, see the
glossary.
Mark to market adjustments have been provided by the
counterparty or by reference to the quoted fair value of financial
instruments.
6. Property assets
Investment property and investment property under construction
("IPUC").
Properties are stated at fair value as at 31 March 2022. The
fair value has been determined by the Group's external valuers
CBRE, Cushman & Wakefield and Jones Lang LaSalle. The
properties have been valued individually and on the basis of open
market value (which the Directors consider to be the fair value) in
accordance with RICS Valuation - Professional Standards 2020 ("the
Red Book"). Valuers are paid on the basis of a fixed fee
arrangement, subject to the number of properties valued.
Investment IPUC Total Investment IPUC Total
2022 2022 2022 2021 2021 2021
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------- ---------- ------ ------- ---------- ------ -------
Opening market value 2,404.3 43.5 2,447.8 2,075.9 57.5 2,133.4
Additions:
---------- ------ ------- ---------- ------ -------
- acquisitions 233.5 - 233.5 228.9 - 228.9
- improvements 8.5 - 8.5 4.6 - 4.6
---------- ------ ------- ---------- ------ -------
242.0 - 242.0 233.5 - 233.5
Development costs - 62.1 62.1 - 56.9 56.9
Transfers 42.1 (42.1) - 77.7 (77.7) -
Transfer to assets held
for sale (76.0) - (76.0) (14.3) - (14.3)
Capitalised interest - 1.6 1.6 - 1.9 1.9
Disposals (0.5) - (0.5) (5.2) - (5.2)
Unrealised surplus on
revaluation 65.4 4.0 69.4 36.7 4.9 41.6
--------------------------- ---------- ------ ------- ---------- ------ -------
Closing market value 2,677.3 69.1 2,746.4 2,404.3 43.5 2,447.8
Add head lease liabilities
recognised separately 5.5 - 5.5 5.5 - 5.5
--------------------------- ---------- ------ ------- ---------- ------ -------
Closing fair value of
investment property 2,682.8 69.1 2,751.9 2,409.8 43.5 2,453.3
--------------------------- ---------- ------ ------- ---------- ------ -------
2022 2021
GBPm GBPm
--------------------------------------------------- ------- -------
Market value of investment property as estimated
by valuer 2,674.3 2,400.4
Add IPUC 69.1 43.5
Add capitalised lease premiums and rental payments 3.0 3.9
Add head lease obligations recognised separately 5.5 5.5
--------------------------------------------------- ------- -------
Fair value for financial reporting purposes 2,751.9 2,453.3
--------------------------------------------------- ------- -------
Completed investment property held for sale 76.0 14.3
Land held for sale 0.4 0.4
--------------------------------------------------- ------- -------
Total property assets 2,828.3 2,468.0
--------------------------------------------------- ------- -------
2022 2021
GBPm GBPm
------------------------------------ ------- -------
Investment property 2,647.3 2,400.4
Investment property held for sale 76.0 14.3
------------------------------------ ------- -------
Total completed investment property 2,750.3 2,414.7
------------------------------------ ------- -------
2022
GBPm
--------------------------------------- ------
Assets held for sale at 1 April 2021 14.7
Disposals during the year (14.3)
Net transfers from investment property 76.0
--------------------------------------- ------
Assets held for sale at 31 March 2022 76.4
--------------------------------------- ------
Fair value hierarchy
The fair value measurement hierarchy for all investment property
and IPUC as at 31 March 2022 was Level 3 - Significant unobservable
inputs (2021: Level 3). There were no transfers between Levels 1, 2
or 3 during the year.
Descriptions and definitions relating to valuation techniques
and key unobservable inputs made in determining fair values are as
follows:
Valuation techniques used to derive Level 3 fair values
The valuations have been prepared on the basis of fair market
value which is defined in the Red Book as "the estimated amount for
which an asset or liability should exchange on the valuation date
between a willing buyer and a willing seller in an arms-length
transaction after proper marketing and where the parties had each
acted knowledgeably, prudently and without compulsion".
Unobservable inputs
The key unobservable inputs in the property valuation are the
net initial yield, the equivalent yield and the ERV, which are
explained in more detail below. It is also worth noting that the
properties are subject to physical inspection by the valuers on a
rotational basis (at least once every three years).
In respect of 93% of the portfolio by value, the net initial
yield ranges from 3.5% to 8.7% (2021: 3.4% to 8.1%) and the
equivalent yield ranges from 3.3% to 8.5% (2021: 3.8% to 8.1%). A
decrease in the net initial or equivalent yield applied to a
property would increase the market value. Factors that affect the
yield applied to a property include the weighted average unexpired
lease term, the estimated future increases in rent, the strength of
the occupier covenant and the physical condition of the property.
Lower yields generally represent properties with index-linked
reviews, 100% NHS tenancies and longer unexpired lease terms,
ranging from 3.5% to 4.5%. Higher yields (range 5.0% to 8.0%) are
applied for a weaker occupier mix and leases approaching expiry.
Our properties have a range of occupier mixes, rent review basis
and unexpired terms. A 0.25% shift in either net initial or
equivalent yield would have approximately a GBP153 million (2021:
GBP132 million) impact on the investment property valuation.
The ERV ranges from GBP100 to GBP669 per sq.m (2021: GBP100 to
GBP427 per sq.m), in respect of 100% of the portfolio by value. An
increase in the ERV of a property would increase the market value.
A 2% increase in the ERV would have approximately a GBP54.8 million
(2021: GBP48.3 million) increase in the investment property
valuation. The nature of the sector we operate in, with long
unexpired lease terms, low void rates, low occupier turnover and
upward only rent review clauses, means that a significant fall in
the ERV is considered unlikely.
7. Deferred revenue
2022 2021
GBPm GBPm
------------------------------------------------- ----- -----
Arising from rental received in advance 29.5 24.9
Arising from pharmacy lease premiums received in
advance 6.6 6.6
------------------------------------------------- ----- -----
36.1 31.5
------------------------------------------------- ----- -----
Current 30.1 25.4
Non-current 6.0 6.1
------------------------------------------------- ----- -----
36.1 31.5
------------------------------------------------- ----- -----
8. Borrowings
2022 2021
GBPm GBPm
--------------------------------- ------- -------
At 1 April 948.7 841.5
Amount drawn down in year 315.9 298.1
Amount repaid in year (20.0) (190.0)
Loan issue costs (2.1) (3.2)
Amortisation of loan issue costs 1.9 1.6
Write-off of loan issue costs - 0.7
At 31 March 1,244.4 948.7
================================= ======= =======
Due within one year - -
Due after more than one year 1,244.4 948.7
At 31 March 1,244.4 948.7
============================= ======= =====
The Group has the following bank facilities:
1. 10-year senior unsecured bond of GBP300 million at a fixed
rate of 3% maturing July 2028, 10-year senior unsecured Social Bond
of GBP300 million at a fixed interest rate of 1.5% maturing
September 2030 and 12-year senior unsecured Sustainability Bond of
GBP300 million at a fixed rate of 1.625% maturing June 2033. The
Social and Sustainability Bonds were launched in accordance with
Assura's Social & Sustainable Finance Frameworks respectively
to be used for eligible investment in the acquisition, development
and refurbishment of publicly accessible primary care and community
healthcare centres. The bonds are subject to an interest cover
requirement of at least 150%, maximum LTV of 65% and priority debt
not exceeding 0.25:1. In accordance with pricing convention in the
bond market, the coupon and quantum of the facility are set to
round figures with the proceeds adjusted based on market rates on
the day of pricing.
2. Five-year club revolving credit facility with Barclays, HSBC,
NatWest and Santander for GBP125 million on an unsecured basis at
an initial margin of 1.60% above SONIA subject to LTV and expiring
in November 2024. The margin increases based on the LTV of the
subsidiaries to which the facility relates, up to 1.95% where the
LTV is in excess of 45%. The facility is subject to a historical
interest cover requirement of at least 175% and maximum LTV of 60%.
As at 31 March 2022, the facility was undrawn (2021: undrawn). The
facility was GBP300 million as at March 2021 and during the year
the decision was taken by the Company to reduce the facility to
GBP125 million.
3. 10-year notes in the US private placement market for a total
of GBP100 million. The notes are unsecured, have a fixed interest
rate of 2.65% and were drawn on 13 October 2016. An additional
GBP107 million of notes were issued in two series, GBP47 million in
August 2019 and GBP60 million in October 2019, with maturities of
10 and 15 years respectively and a weighted average fixed interest
rate of 2.30%. The facilities are subject to a historical interest
cover requirement of at least 175%, maximum LTV of 60% and a
weighted average lease length of seven years.
4. GBP150 million of unsecured privately placed notes in two
tranches with maturities of eight and ten years drawn on 20 October
2017. The weighted average coupon is 3.04%. The facility is subject
to a historical cost interest cover requirement of at least 175%,
maximum LTV of 60% and a weighted average lease length of seven
years.
The Group has been in compliance with all financial covenants on
all of the above loans as applicable throughout the year. Debt
instruments held at year-end have prepayment options that can be
exercised at the sole discretion of the Group. As at the year end
no prepayment option has been exercised. Borrowings are stated net
of unamortised loan issue costs and unamortised bond pricing
adjustments totalling GBP12.6 million (2021: GBP8.3 million).
9. Share capital
Number Share capital Number Share capital
of shares 2022 of shares 2021
2022 GBPm 2021 GBPm
============================= ============= ============= ============= =============
Ordinary Shares issued and
fully paid
============================= ============= ============= ============= =============
At 1 April 2,671,853,938 267.2 2,413,241,827 241.3
Issued 9 April 2020 - - 240,207,920 24.0
Issued 15 April 2020 - scrip - - 6,543,440 0.7
Issued 15 July 2020 - scrip - - 1,290,983 0.1
Issued 22 July 2020 - - 676,549 0.1
Issued 4 September 2020 - - 213,319 -
Issued 14 October 2020 -
scrip - - 1,879,606 0.2
Issued 4 November 2020 - - 1,199,598 0.1
Issued 13 January 2021 -
scrip - - 6,433,015 0.7
Issued 5 February 2021 - - 167,681 -
Issued 9 April 2021 682,128 0.1 - -
Issued 14 April 2021 - scrip 3,011,418 0.3 - -
Issued 7 July 2021 867,377 0.1 - -
Issued 14 July2021 - scrip 501,077 - - -
Issued 13 October 2021 -
scrip 362,022 - - -
Issued 26 October 2021 240,000 0.1 - -
Issued 11 November 2021 267,554,740 26.7 - -
Issued 12 January 2022 -
scrip 3,286,937 0.3 - -
Total share capital 2,948,359,637 294.8 2,671,853,938 267.2
============================= ============= ============= ============= =============
There is no difference between the number of Ordinary Shares
issued and authorised. At the AGM each year, approval is sought
from shareholders giving the Directors the ability to issue
Ordinary Shares, up to 10% of the Ordinary Shares in issue at the
time of the AGM.
The Ordinary Shares issued in April 2020, July 2020, October
2020, January 2021, April 2021, July 2021, October 2021 and January
2022 were issued to shareholders who elected to receive Ordinary
Shares in lieu of a cash dividend under the Company scrip dividend
alternative. In the year to 31 March 2022 this increased share
capital by GBP0.6 million and share premium by GBP4.4 million
(2021: GBP1.6 million and GBP10.1 million respectively).
In April 2020, a total of 240,207,920 new Ordinary Shares were
placed at a price of 77 pence per share. The equity raise resulted
in gross proceeds of GBP185.0 million which has been allocated
appropriately between share capital (GBP24.0 million) and share
premium (GBP161.0 million). Issue costs totalling GBP4.3 million
were incurred and have been allocated against share premium.
In November 2021, a total of 267,554,740 new Ordinary Shares
were placed at a price of 68 pence per share. The equity raise
resulted in gross proceeds of GBP182.0 million which has been
allocated appropriately between share capital (GBP26.8 million) and
share premium (GBP155.2 million). Issue costs totalling GBP4.7
million were incurred and have been allocated against share
premium.
The Ordinary Shares issued on 4 November 2020, 9 April 2021 and
26 October 2021 were issued as part consideration for the
acquisition of medical centres.
The Ordinary Shares issued in July 2020, September 2020,
February 2021 and July 2021 relate to employee share awards under
the Performance Share Plan. The shares issued on 4 September 2020
(213,319) and a portion of the shares issued on 7 July 2021
(230,934) were issued to the EBT on behalf of employees under the
PSP.
The merger reserve relates to the capital restructuring in
January 2015 whereby Assura plc replaced Assura Group Limited as
the top company in the Group and was accounted for under merger
accounting principles.
10. Dividends paid on Ordinary Shares
Pence per Number of 2022 2021
Payment date share Ordinary Shares GBPm GBPm
================ ========= ================ ===== =====
15 April 2020 0.697 2,413,241,824 - 16.9
15 July 2020 0.71 2,654,993,187 - 18.9
14 October 2020 0.71 2,662,174,038 - 18.9
13 January 2021 0.71 2,665,253,242 - 18.9
================ ========= ================ ===== =====
14 April 2021 0.71 2,671,853,938 19.0 -
================ ========= ================ ===== =====
14 July 2021 0.74 2,675,547,484 19.8 -
================ ========= ================ ===== =====
13 October 2021 0.74 2,676,915,938 19.8 -
================ ========= ================ ===== =====
12 January 2022 0.74 2,945,072,700 21.8 -
================ ========= ================ ===== =====
80.4 73.6
================ ========= ================ ===== =====
The April dividend for 2022/23 of 0.74 pence per share was paid
on 13 April 2022 and the July dividend for 2022/23 of 0.78 pence
per share is currently planned to be paid on 13 July 2022 with a
record date of 10 June 2022.
A scrip dividend alternative was introduced with effect from the
January 2016 quarterly dividend. Details of shares issued in lieu
of dividend payments can be found in Note 9.
The April 2020, October 2020, April 2021 and October 2021
dividends were PIDs as defined under the REIT regime. Future
dividends will be a mix of PID and normal dividends as
required.
11. LTV
The Group manages its capital structure and makes adjustments to
it in light of changes in economic conditions. To maintain or
adjust the capital structure, the Group may make disposals, adjust
the dividend payment to shareholders, return capital to
shareholders or issue new shares.
The Group monitors capital structure with reference to LTV,
which is calculated as net debt divided by total property. The LTV
percentage on this basis is 36% at 31 March 2022 (31 March 2021:
37%).
2022 2021
GBPm GBPm
======================================= ======= =======
Investment property 2,682.8 2,409.8
Investment property under construction 69.1 43.5
Held for sale 76.4 14.7
Total property 2,828.3 2,468.0
======================================= ======= =======
2022 2021
GBPm GBPm
======================= ======= ======
Borrowings 1,244.4 948.7
Head lease liabilities 5.5 5.5
Cash (243.5) (46.6)
Net debt 1,006.4 907.6
======================= ======= ======
LTV 36% 37%
==== === ===
12. Commitments
At the year end the Group had 17 (2021: 16) committed
developments which were all on site with a contracted total
expenditure of GBP166.4 million (2021: GBP72.5 million) of which
GBP65.2 million (2021: GBP36.6 million) had been expended.
The Group is committed to invest up to GBP5 million in PropTech
investor PI Labs III LP, which can be requested on demand to cover
investments that the fund makes in qualifying, selected PropTech
businesses. GBP0.7 million had been invested as at 31 March
2022.
Glossary
AGM is the Annual General Meeting.
Average Debt Maturity is each tranche of Group debt multiplied
by the remaining period to its maturity and the result divided by
total Group debt in issue at the year end.
Average Interest Rate is the Group loan interest and derivative
costs per annum at the year end, divided by total Group debt in
issue at the year end.
British Property Federation ("BPF") is the membership
organisation, the voice, of the real estate industry.
Building Research Establishment Environmental Assessment Method
("BREEAM") assess the sustainability of buildings against a range
of criteria.
Clinical Commissioning Groups ("CCGs") are the groups of GPs and
other healthcare professionals responsible for commissioning
primary and secondary healthcare services in their locality.
Code or New Code is the UK Corporate Governance Code 2018, a
full copy of which can be found on the website of the Financial
Reporting Council.
Company is Assura plc.
Direct Property Costs comprise cost of repairs and maintenance,
void costs, other direct irrecoverable property expenses and rent
review fees.
District Valuer ("DV") is the commercial arm of the Valuation
Office Agency. It provides professional property advice across the
public sector and in respect of primary healthcare represents NHS
bodies on matters of valuations, rent reviews and initial rents on
new developments.
Earnings per Ordinary Share from Continuing Operations ("EPS")
is the profit attributable to equity holders of the parent divided
by the weighted average number of shares in issue during the
period.
EBITDA is EPRA earnings before tax and net finance costs. In the
current period this is GBP114.1 million, calculated as net rental
income (GBP126.5 million) less administrative expenses (GBP11.7
million) and share-based payment charge (GBP0.7 million).
European Public Real Estate Association ("EPRA") is the industry
body for European REITs. EPRA is a registered trade mark of the
European Public Real Estate Association.
EPRA Cost Ratio is administrative and operating costs divided by
gross rental income. This is calculated both including and
excluding the direct costs of vacant space.
EPRA earnings is a measure of profit calculated in accordance
with EPRA guidelines, designed to give an indication of the
operating performance of the business, excluding one-off or
non-cash items such as revaluation movements and profit or loss on
disposal. See Note 4.
EPRA EPS is EPRA earnings, calculated on a per share basis. See
Note 4.
EPRA NAV is IFRS NAV adjusted to adjust certain assets to fair
value and exclude long -- term items not expected to crystallise.
This has now been replaced by EPRA NTA. See Note 5.
EPRA Net Disposal Value ("EPRA NDV") is the balance sheet net
assets adjusted to reflect the fair value of debt and derivatives.
See Note 5.
EPRA Net Reinstatement Value ("EPRA NRV") is the balance sheet
net assets excluding deferred tax and adjusted to add back
theoretical purchasers' costs that are deducted from the property
valuation. See Note 5.
EPRA Net Tangible Assets ("EPRA NTA") is the balance sheet net
assets excluding deferred taxation. See Note 5.
EPRA NIY is annualised rental income based on cash rents passing
at the balance sheet date, less non-recoverable property operating
expenses, divided by the market value of property, increased with
(estimated) purchasers' costs.
EPRA "topped up" NIY incorporates an adjustment to the EPRA NIY
in respect of the expiration of rent-free periods or other
unexpired lease incentives.
EPRA NNNAV is EPRA NAV adjusted to include the fair value of
debt, financial instruments and deferred tax. This has now been
replaced by EPRA NDV.
EPRA Vacancy Rate is the ERV of vacant space divided by the ERV
of the whole portfolio.
Equivalent Yield is a weighted average of the Net Initial Yield
and Reversionary Yield and represents the return a property will
produce based upon the timing of the income received. The true
equivalent yield assumes rents are received quarterly in advance.
The nominal equivalent assumes rents are received annually in
arrears.
Estimated Rental Value ("ERV") is the external valuers' opinion
as to the open market rent which, on the date of valuation, could
reasonably be expected to be obtained on a new letting or rent
review of a property.
GMS is General Medical Services.
Gross Rental Income is the gross accounting rent receivable.
Group is Assura plc and its subsidiaries.
IFRS is International Financial Reporting Standards adopted
pursuant to Regulation (EC) 1606/2002 as it applies in the EU.
Interest Cover is the number of times net interest payable is
covered by EBITDA. In the current period net interest payable is
GBP28.0 million, EBITDA is GBP114.1 million, giving interest cover
of 4.1 times.
KPI is a Key Performance Indicator.
Like-for-like represents amounts calculated based on properties
owned at the previous year end.
Loan to Value ("LTV") is the ratio of net debt to the total
value of property assets. See Note 11.
Mark to Market is the difference between the book value of an
asset or liability and its market value.
MSCI is an organisation that provides performance analysis for
most types of real estate and produces an independent benchmark of
property returns. The MSCI All Healthcare Index refers to the MSCI
UK Annual Healthcare Property Index, incorporating all properties
reported to MSCI for the 12 months to December that meet the
definition of healthcare.
NAV is Net Asset Value.
Net debt is total borrowings plus head lease liabilities less
cash. See Note 11.
Net Initial Yield ("NIY") is the annualised rents generated by
an asset, after the deduction of an estimate of annual recurring
irrecoverable property outgoings, expressed as a percentage of the
asset valuation (after notional purchasers' costs). Development
properties are not included.
Net Rental Income is the rental income receivable in the period
after payment of direct property costs. Net rental income is quoted
on an accounting basis.
Operating efficiency is the ratio of administrative costs to the
average gross investment property value. This ratio during the
period equated to 0.45%. This is calculated as administrative
expenses of GBP11.7 million divided by the average property balance
of GBP2,603 million (opening GBP2,453 million plus closing GBP2,752
million, divided by two).
Primary Care Network ("PCN") is a GP practice working with local
community, mental health, social care, pharmacy, hospital and
voluntary services to build on existing primary care services and
enable greater provision of integrated health services within the
community they serve.
Primary Care Property is the property occupied by health
services providers who act as the principal point of consultation
for patients such as GP practices, dental practices, community
pharmacies and high street optometrists.
Property Income Distribution ("PID") is the required
distribution of income as dividends under the REIT regime. It is
calculated as 90% of exempted net income.
PSP is Performance Share Plan.
Real Estate Investment Trust ("REIT") is a listed property
company which qualifies for and has elected into a tax regime which
exempts qualifying UK profits, arising from property rental income
and gains on investment property disposals, from corporation tax,
but requires the distribution of a PID.
Rent Reviews take place at intervals agreed in the lease
(typically every three years) and their purpose is usually to
adjust the rent to the current market level at the review date.
Rent Roll is the passing rent (i.e. at a point in time) being
the total of all the contracted rents reserved under the leases, on
an annual basis. At March 2022 the rent roll was GBP135.7 million
(March 2021: GBP121.7 million) and the growth in the year was
GBP14.0 million.
Retail Price Index ("RPI") is an official measure of the general
level of inflation as reflected in the retail price of a basket of
goods and services such as energy, food, petrol, housing, household
goods, travelling fares, etc. RPI is commonly computed on a monthly
and annual basis.
Reversionary Yield is the anticipated yield which the initial
yield will rise to once the rent reaches the ERV and when the
property is fully let. It is calculated by dividing the ERV by the
valuation.
RPI Linked Leases are those leases which have rent reviews which
are linked to changes in the RPI.
Total Accounting Return is the overall return generated by the
Group including the impact of debt. It is calculated as the
movement on EPRA NTA (see glossary definition and Note 5) for the
period plus the dividends paid, divided by the opening EPRA NTA.
Opening EPRA NTA (i.e. at 31 March 2021) was 57.2 pence per share,
closing EPRA NTA was 60.7 pence per share, and dividends paid total
2.93 pence per share giving a return of 11.2% in the year.
Total Contracted Rent Roll or Total Contracted Rental Income is
the total amount of rent to be received over the remaining term of
leases currently contracted. For example, a lease with rent of
GBP100 and a remaining lease term of ten years would have total
contracted rental income of GBP1,000. At March 2022, the total
contracted rental income was GBP1.81 billion (March 2021: GBP1.57
billion) and the growth in the year was GBP240 million.
Total Property Return is the overall return generated by
properties on a debt-free basis. It is calculated as the net rental
income generated by the portfolio plus the change in market values,
divided by opening property assets plus additions. In the year to
March 2022, the calculation is net rental income of GBP126.5
million plus revaluation of GBP69.4 million giving a return of
GBP195.9 million, divided by GBP2,748 million (opening investment
property GBP2,400.4 million and IPUC GBP43.5 million plus additions
of GBP242.0 million and development costs of GBP62.1 million). This
gives a Total Property Return in the year of 7.1%.
Total Shareholder Return ("TSR") is the combination of dividends
paid to shareholders and the net movement in the share price during
the period, divided by the opening share price. The share price at
31 March 2021 was 72.1 pence, at 31 March 2022 it was 66.9 pence,
and dividends paid during the period were 2.93 pence per share.
UK GBC is the UK Green Building Council.
Weighted Average Unexpired Lease Term ("WAULT") is the average
lease term remaining to first break, or expiry, across the
portfolio weighted by contracted rental income.
Yield on cost is the estimated annual rent of a completed
development divided by the total cost of development including site
value and finance costs expressed as a percentage return.
Yield shift is a movement (usually expressed in basis points) in
the yield of a property asset or like-for-like portfolio over a
given period.
Yield compression is a commonly used term for a reduction in
yields.
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