Assura plc has said it remains in a strong financial position and is well placed to support the NHS and wider healthcare market as rising demand drives the need for more investment in infrastructure.
In a trading update for the first quarter ending 30 June 2024, CEO Jonathan Murphy said: ‘We deliver an exceptional product, have a strong financial position, and have a culture that focuses on all of our stakeholders to ensure we build strong relationships for the long-term.’
A significant development in Assura’s growth strategy was the announcement in May of a £250m joint venture with USS, the largest private pension scheme in the UK. Murphy described the move as ‘a significant and exciting step for Assura’, which would provide diversity of funding for future growth. The joint venture will allow Assura to recycle capital into a pipeline of opportunities across broader healthcare markets, including partnerships with NHS Trusts, private hospitals, mental health facilities, and projects in Ireland, added Murphy.
The company is also exploring further opportunities that could be funded through various sources, including third-party capital, while adhering to its LTV policy range of 40-50%.
Assura has continued to maintain a disciplined approach to its activities. Its portfolio now stands at 612 properties with an annualised rent roll of £149.2m, slightly down from £150.6m in March 2024. During the quarter, Assura completed three developments with a total spend of £46 million, including a GP surgery in Shirley, an ambulance hub at Bury St Edmunds, and its largest in-house project to date, the Northumbria Health & Care Academy in Cramlington.
It also settled 42 rent reviews in the quarter, covering £7m of existing rent and generating an uplift of £0.5m. The initial tranche of seven assets, valued at £107m, was also agreed for transfer to the joint venture with USS. Additionally, the company completed three asset enhancement capital projects with a total spend of £1.5m and four lease regears. A further five capital projects, totalling £2.9, are currently on site.
The company is currently on site with five developments, with a total cost of £46m, of which £32m remains to be spent. The immediate development pipeline includes five schemes with a total cost of £28m. Over the next two years, Assura plans to undertake 15 capital asset enhancement projects with a projected spend of £9m. In addition, 37 lease regears covering £4.5m of existing rent roll are in the pipeline.
Assura reported net debt of £1,159m, down from £1,217m in March 2024, on a fully unsecured basis, with cash and undrawn facilities of £293m.
‘The UK healthcare crisis is getting more severe by the year, which in turn is driving increased demand for healthcare infrastructure,’ said Murphy. ‘The requirement for investment in this space has received cross-party political support, and we look forward to working with whichever party is in government following today’s election.’