11 November 2021
ASSURA PLC
(“Assura” or the “Company”)
Proposed equity placing of new ordinary shares to fund investment in the significant development, acquisition and asset enhancement pipeline
Assura, the leading primary care property investor and developer, is announcing a proposed placing, by way of accelerated bookbuild, of up to 267,554,740 new ordinary shares (“Placing Shares”), representing up to approximately 10 % of the Company's existing issued share capital (the “Placing”). The Placing is expected to raise gross proceeds of approximately £190 million.
As separately announced today, the Company is also conducting a retail offer of up to the sterling equivalent of €8 million of new ordinary shares (the “Retail Shares”) at the same price as the Placing Shares through the PrimaryBid platform (the “PrimaryBid Offer”), details of which are contained in a related announcement.
The maximum number of Placing Shares and Retail Shares to be issued pursuant to the Placing and the PrimaryBid Offer respectively shall not exceed 267,554,740 new ordinary shares in aggregate.
The Placing, which is being conducted by way of an accelerated bookbuilding process (the “Bookbuild”) available to qualifying new and existing investors, will be launched immediately following this announcement.
Highlights
- Assura has been working with the NHS and GPs for 18 years and has a strong track record of deploying capital efficiently; over £1 billion has been invested since April 2017 including £185 million of modern, purpose-built developments that are now used to deliver vital health services in the communities they support.
- COVID has highlighted and emphasised the need for significant investment in the primary care estate within the UK. The pandemic has heightened health inequalities, dramatically increased waiting lists, highlighted capacity constraints for hospitals, exposed older premises as unfit for purpose and emphasised the value of service delivery in a community setting, including vaccinations.
- Assura is responding by applying its strengthened development capability in supporting upgraded or new premises in the community, using design innovation and sustainability credentials to better meet the needs of customers and unlocking emerging opportunities.
- Assura's integrated platform, relationship with the NHS and its customers, as well as substantial market access continues to drive an acquisition pipeline that currently has 22 properties, with a total cost of £102 million, in legal hands.
Following the acquisition of primary care developer GPI in May 2019, Assura's market-leading development capability was further strengthened by the acquisition of Apollo in February 2021. The development team has grown from two people to ten. The present pipeline, which will ensure Assura continues to capture development margin and produce modern, purpose-built, best-in-class buildings, stands (as at 30 September 2021) at a record £480 million, and is split as follows:
- 12 schemes currently on site (total cost £72 million)
- 20 schemes expected to be on site within 12 months (total cost £145 million); and
- 37 schemes where Assura is appointed as preferred developer currently awaiting NHS approval (total cost £263 million)
- Assura's dedicated asset management team continues to drive lease re-gears, generate new tenant leases and initiate capital projects to extend or improve existing GP facilities. A spend of £19 million on 24 asset enhancement projects is being targeted over the next two years.
- Assura therefore has a substantial pipeline against which it will deploy the anticipated proceeds of the fundraising, which is expected to reduce its LTV to approximately 36% (on a pro forma basis).
Interim results
Assura has today separately announced its interim results for the six months ended 30 September 2021:
- LTV of 39% (March 2021: 37%) and a lowest ever cost of debt of 2.30%
- EPRA earnings up 7% to £40.9 million (2020: £35.8 million); EPRA EPS of 1.5p (2020: 1.4p)
- EPRA NTA increased to 58.4p per share (March 2021: 57.2p)
- Portfolio increased 6% to £2,595 million as at 30 September 2021 (March 2021: £2,453 million)
- Portfolio Net Initial Yield (“NIY”) at 4.56% (March 2021: 4.56%), valuation gain of £28.1 million in the six months
- Current quarterly dividend of 0.74p (March 2021: 0.71p)
- Selective capital recycling with 27 new additions for total cost of £117 million and 11 selective disposals for proceeds of £15 million which generated a modest profit over book value.
- 87,000 people benefited from the SixbySix social impact strategy in the half-year period
This announcement should be read in conjunction with the Interim Results.
Jonathan Murphy, CEO of Assura said:
“The NHS has been put under significant strain by COVID, which has highlighted capacity constraints in hospitals, increased waiting lists, and exposed older buildings as inadequate for current healthcare requirements. Assura's experience, built up through years of close engagement with the NHS, means we are well positioned to deliver the future innovative community buildings this country needs and support the NHS' response to key societal themes including digitalisation, the integration of healthcare systems and mental health support.
“Assura is proud to have invested over £1 billion into primary care properties since April 2017 and currently has a strong pipeline of opportunities in which to invest to further support the vital health services delivered in a community setting.
“Assura's market leading development capabilities allow us to access a growing pipeline of development opportunities, including in emerging areas such as diagnostic treatment centres, mental health support and with providers of primary care at scale, and helps us access scale benefits which drive returns and support our dividend policy.”