Half Yearly Report

RNS Number : 1065D

Assura Group Limited

26 November 2009

 



Assura Group Limited

("Assura", "the Group" or "the Company")

Interim results for the six months ended 30 September 2009

Strong increase in revenues and return to trading profits

26 November 2009: Assura Group Limited (LSE: AGR), one of the leading healthcare companies in the UK, today provides its unaudited interim results for the six months ended 30 September 2009. 

Financial Highlights

• Group revenues up 20 per cent to £26.8m (H1 2008: £22.3m) 

• Pharmacy revenues up 25 per cent to £15.2m (H1 2008: £12.1m) with a gross margin of 30 per cent (H1 2008: 27 per cent)1

• Group trading profit of £1.7m (H1 2008: £1.9m loss)

• Net assets of £178.2m (31 March 2009: £173.7m), equivalent to 65.4p (31 March 2009: 66.7p) per Share2 

• Investment portfolio of £306.9m (31 March 2009: £278.9m) reflecting a net initial yield of 6.27 per cent (31 March 2009: 6.27 per cent)3

• 23 rent reviews settled (H1 2008: 18) resulting in average annualised rental growth increase of 3.4 per cent (H1 2008: 6.1 per cent)

• Rent roll of £22.3m4

• Net debt drawn amounting to £224m 

• Debt facilities in place providing total facilities of £272m

• £21.5m repaid to National Australia Bank with further £8.5m debt reduction on track to be repaid in advance of year end deadline

• £25.2m cash and cash equivalents

Operating Highlights

• 117 investment properties at 30 September 2009 and three investment properties under construction on site

• 32 pharmacies trading5,6

• 21 additional pharmacy contracts granted, four of which are being disposed of and are currently in solicitors' hands5 

• 30 GPCos formed covering a population of 3.1 million patients5

• 68 NHS services won or at preferred bidder stage with an estimated aggregate mature run rate of £27m revenue per annum5

• 48 live NHS services5, 7

1 Excludes 50 per cent share of revenue derived from pharmacies owned in joint venture with GP Care.

2 Adjusted diluted net asset value per Ordinary Share (excluding the notional mark to market value of the Company's interest rate swap and own shares held).

3 Excludes investment properties under construction.

4 Including the rental value of own premises.

5 As at 23 November 2009.

6 Includes six pharmacies which form part of the joint venture with GP Care.

7 Excludes 10 private services and contracts which are yet to be operational or are at preferred bidder stage.

Commenting on today's announcement, Richard Burrell, CEO of Assura said: "We are pleased to have increased property and pharmacy revenues by 20 per cent and to have returned to profits at a pre-tax level. Assura has a top performing property portfolio and is continuing to achieve strong rental growth in an increasingly stable property market. Both our pharmacy and GPCo businesses increased revenues strongly in the period and our pharmacy business is now cash generative. Trading since the year end has been in line with our expectations and we look to the future with confidence."

Enquiries:

Assura Group Limited	020 7107 3800
Richard Burrell, CEO
Nigel Rawlings, CFO
Louise Bathersby, IR
FD	020 7831 3113
Ben Atwell

Chief Executive's Statement

Introduction

We have made good progress during the first six months of the year. Group turnover is up 20 per cent to £26.8m (H1 2008: £22.3m) and we are reporting a trading profit of £1.7m (H1 2008: £1.9m loss). All of our businesses are trading ahead of budget and we are encouraged by the outlook for the full year. Net assets as at 30 September 2009 increased to £178.2m (31 March 2009: £173.7m), equivalent to an adjusted fully diluted 65.4p (31 March 2009: 66.7p) per Ordinary Share.

Property business

We have continued to achieve good rental growth across the investment property portfolio during the period. 23 individual rent reviews were settled during the period, with an equivalent annual increase of 3.43 per cent on the passing rent relating to those properties. This growth, coupled with strong asset management of vacant space has helped to increase the rent roll on the entire portfolio as at 30 September 2009 to £22.3m (including rent from own premises amounting to £1.5m). Whilst we are pleased that rental growth is being maintained, we expect it to be at a slower rate in the second half of the year than the first six months. 

Despite the commercial property market being badly hit in the current economic downturn, recent trends are beginning to suggest some stabilisation and there appears to be appetite in the market for tenants with strong long term covenants. With 86 per cent of our investment property portfolio's rental income reimbursed by the NHS and a weighted average lease length across the portfolio of nearly 17.5 years, we believe that Assura's property portfolio is both defensive and robust.

In line with its strategy, the Company has sold four non-core investment properties during the period for an aggregate consideration of £5.7m. The prices achieved were all at, or in excess of, their 31 March 2009 property valuations, which valued the entire portfolio at a net initial yield of 6.27 per cent.  

As at 30 September 2009, the Company had three investment properties under construction on site with a forecast final total cost of £22m, of which £14m was expended. The Company has, in addition, a land bank of 20 sites at a written down value of £12.8m.

As at 30 September 2009, total property assets comprising investment property, investment properties under construction and development properties were £333m (31 March 2009: £334m) and there was net debt drawn against these assets amounting to some £224m (31 March 2009: £213m).

The Company is involved in the management of six LIFT companies and derives fees and investment income from these associated companies. These six LIFT companies have an aggregate development pipeline of circa £150m in the next two years and derived £1.1m total fee income during the first six months of the year.

The Company sees opportunities emerging out of properties owned by NHS bodies and Primary Care Trusts ("PCTs"). Given the inevitable cut backs in NHS spending and the increasing move by PCTs to encourage community based provision from a range of providers, there are a number of opportunities arising for the Company to acquire, manage and/or develop existing PCT-owned estates to enable more flexible provision of service, whilst at the same time creating long dated, secure income streams out of the underlying property.

Property portfolio performance

The Investment Property Databank ("IPD") has recently published the UK Healthcare Index for 2008. Assura, along with its peers and other competitors, contributed data to the compilation of this index. The IPD UK Healthcare Index produced a total return during 2008 of minus 4.6 per cent which compares favourably against the IPD UK All Property Index of minus 22.1 per cent, underlining the comparatively defensive nature of the healthcare property assets in general.

We are pleased to report that the Assura property portfolio produced a total return of minus 2.9 per cent in the same period which represents a 1.7 per cent out-performance against the new benchmark index and an outperformance of 19.2 per cent against the broader market. This performance placed Assura in the top 5 per cent of all property portfolios and in the top quartile of all portfolios in the new IPD UK Healthcare Index. 

  Pharmacy business

During the first six months of the year, Assura's wholly-owned pharmacies (excluding the six GP Care JV owned stores) dispensed 1.32 million prescription items and generated turnover of £15.2m (H1 2008: £12.1m).  The year-on-year increase in prescription items in wholly owned pharmacies was 21 per cent and from stores that were trading for the whole of the previous 12 months there was an 11 per cent increase. We have seen a marked improvement in service revenues from the pharmacies through both nationally commissioned advanced services (e.g. Medicines Use Reviews) and locally commissioned enhanced services (e.g. smoking cessation advice) and we are beginning to see profitable revenue streams from these activities. During the period, this business achieved a gross margin of more than 30 per cent compared with 27 per cent in the comparative period. Total branch EBITDA for the wholly-owned pharmacies was £0.61m (H1 2008: £0.34m).

During the period under review, Assura Pharmacy had four new contracts approved by either PCTs or the Appeal Unit. The number of opportunities for new pharmacy contracts is directly affected by the number of new medical centre developments that are approved by PCTs and the Company operates pharmacies within both Assura developed medical centres and those built by other property developers or LIFT companies. Pharmacies that trade within medical centres have historically been seen as having greater value than traditional high street pharmacies due to their prime position and this continues to be the case. During the period, the Company opened two medical centre-based pharmacies, one in Manchester at a third party owned site and one in Grimsby at an Assura owned development. Both pharmacies were opened as a result of new contract applications (as opposed to having to buy and relocate an existing business) and have created significant value for the Company over and above the premiums payable for opening at the sites.

During the first six months of the year, the Company has sold or closed seven non-core or poorly performing pharmacies and now operates 26 wholly owned pharmacies and a further six high street pharmacies are operated in joint venture with GP Care.

GP Provider Organisation (GPCo) business

We have seen strong revenue growth in a number of our GPCos where aggregate gross revenues during the first six months were ahead of plan and reached £4.1m (H1 2008: £0.4m). This rapid growth in turnover was due to contracts for new NHS services starting and a continued build up in the number of patient contacts and appointments across our live services. We are pleased to report that three GPCos generated a net profit during the first six months of the year and in the month of September, seven GPCos generated a net profit contributing to central overheads.  

Since the beginning of April, the Company's GPCos have opened a number of new Health Centres for patients in Bath, Coventry, Stockton, Hartlepool, Reading, Hull, Hertford and Cheshunt reflecting a mix of GP services, walk-in centres and urgent care centres. All of these facilities are treating significant and growing numbers of patients and feedback on quality of service and waiting times has been positive. Another five Centres are due to open by the end of January 2010. 

As at 23 November 2009, the Company's 30 GPCos had 68 NHS services won or at preferred bidder stage (excluding 10 private services), with 48 of these services live and 20 services yet to be operational or at the preferred bidder stage. The aggregate run rate revenue for all 68 commissioned GPCo NHS services is expected to be in excess of £27m per annum. The tender pipeline we are seeing from the local NHS organisations (Primary Care Trusts) continues to grow and whilst we accept the General Election may result in a slow down in tender activity next year, we are currently experiencing a high volume of procurement for new contracts which are scheduled to start in the spring of 2010 or earlier. 

As this business is expected to be loss making for some time and will consume further cash, the Board is in the process of evaluating a number of options to separate the GPCo business from the rest of the Group. This review of our future options for this business will be completed in the second half of the year and will be reported on in the full year accounts.

Overhead reduction

Following the restructuring of the business at the beginning of 2009, administrative expenses, including pharmacy stores, have been reduced by £1.5m in the first half of the year to £13.1m (H1 2008: £14.6m).  

Debt facilities 

As at 30 September 2009, net debt amounted to £224m (31 March 2009: £213m), drawn from total facilities of £272m.

The Company refinanced a portfolio of seven properties, previously secured to National Australia Bank ("NAB"), with Norwich Union Commercial Finance (part of the Aviva Group "NU") from whom a long term loan amounting to £24.5m was drawn on 23 September 2009 at an all-in fixed rate of 5.85 per cent. On 30 September 2009 £21.5m was repaid to NAB reducing the NAB loan from £190m to £168.5m on that date. The NAB loan will be reduced further to £160m as required on or before 30 March 2010. Given surplus cash held by the Company currently, it is expected that this repayment of £8.5m will be made well in advance of that date.

The Company's loans from NU have increased from £65m at 31 March 2009 to £75m at 30 September 2009 and the Company has offers of finance from NU available to assist with funding for all current and prospective developments planned to start shortly.

The Company's loan from Royal Bank of Scotland reduced to £6.8m in the period.

The Company also recorded a gain from changes in the fair value of interest rate swaps of £8.6m which is included within finance revenue.

Summary and outlook

We are pleased to have delivered a 20 per cent increase in revenues and to have returned to profits at a pre-tax level. Assura has a top performing property portfolio and is continuing to achieve strong rental growth in an increasingly stable property market. Our pharmacy business increased revenues strongly and is now profitable and generating cash. We envisage that a separation of the GPCo business from the rest of the Group will focus the Company back to its core property and pharmacy businesses and accelerate the prospect of a return to dividend payments.  

Trading since the period end has been in line with our expectations and we look to the future with confidence.

Richard Burrell

Chief Executive Officer

25 November 2009

  Interim Consolidated Income Statement

For the six months ended 30 September 2009

			Six months		Six months
			ended 30		ended 30
			September 2009		September 2008
			Unaudited		Unaudited
	Notes		£'000		£'000
Revenue			26,786		22,334
Cost of sales			(12,031)		(9,666)
Gross profit			14,755		12,668
Administrative expenses	8		13,102		14,553
Group trading profits/losses			1,653		(1,885)
Unrealised deficit on revaluation of investment property			-		(12,584)
Gain on disposal of investment properties			117		-
Gain on disposal of pharmacies			776		-
Impairment of development properties			-		(13,448)
Unrealised deficit on revaluation of property, plant and equipment			-		(1,651)
Impairment of goodwill			(279)		(95)
Impairment of other investments			-		(2,553)
Gain on disposal of other investments			409		-
Cost of employee share-based incentive			(455)		(782)
Share in associates and joint venture losses			(776)		(989)
Group operating profit/(loss)			1,445		(33,987)
Finance revenue			9,129		1,177
Finance costs			(6,604)		(8,039)
			2,525		(6,862)
Profit/(loss) before taxation			3,970		(40,849)
Taxation	9		(187)		877
Profit/(loss)for the period from continuing operations			3,783		(39,972)
Profit/(loss) for the year attributable to:
Equity holders of the parent			3,821		(39,843)
Minority interest			(38)		(129)
			3,783		(39,972)
Earnings per share (pence)
Basic earnings/(loss) per share from continuing operations	11		1.25p		(17.71)p
Diluted earnings/(loss)per share from continuing operations	11		1.25p		(17.71)p

  Interim Consolidated Statement of Comprehensive Income

For the six months ended 30 September 2009

			Six months		Six months
			ended 30		ended 30
			September 2009		September 2008
			Unaudited		Unaudited
	Notes		£'000		£'000
Profit/(loss) for the period			3,783		(39,972)
.
Revaluation on land and buildings			-		1,173
Other comprehensive income for the period, net of tax			-		1,173
Total comprehensive income/(loss) for the period, net of tax attributable to equity holders of the parent			3,783		(38,799)
Attributable to:
Equity holders of the parent			3,821		(38,670)
Minority interests			(38)		(129)
			3,783		(38,799)

  Interim Consolidated Balance Sheet

As at 30 September 2009

				30/09/09		31/03/09
				Unaudited		Audited
						As restated
		Notes		£'000		£'000
Non-current assets
	Investment property	12		306,910		278,925
	Investment properties under construction	13		26,255		-
	Development property	14		-		54,767
	Investment in associates			8,258		7,491
	Investment in joint ventures			12,502		10,807
	Intangible assets			43,214		41,844
	Property, plant and equipment	15		26,531		26,798
	Other investments			-		5,968
				423,670		426,600
Current assets
	Cash and cash equivalents	16		25,236		24,790
	Accounts receivable			10,966		9,693
	Inventories			1,901		1,640
	Property work-in-progress			878		1,053
				38,981		37,176
	Non-current assets held for sale and included in disposal groups	17		5,715		509
Total assets				468,366		464,285
Current liabilities
	Accounts payable			22,292		24,698
	Interest bearing loans and borrowings	18		9,210		31,600
				31,502		56,298
Non-current liabilities
	Interest bearing loans and borrowings	18		239,582		206,679
	Payments due under finance lease			1,028		1,076
	Derivative financial instrument at fair value			16,990		25,609
	Deferred tax provision			1,099		912
				258,699		234,276
Total liabilities				290,201		290,574
Net assets				178,165		173,711
Represented by:
Capital and reserves
	Share capital	19		31,747		31,747
	Own shares held			(5,093)		(5,093)
	Share premium			23,212		23,212
	Distributable reserve			213,614		213,614
	Retained earnings			(88,920)		(93,233)
	Revaluation reserve			3,605		3,642
				178,165		173,889
Minority interests				-		(178)
Total equity				178,165		173,711
Basic net asset value per Ordinary Share		20		58.14p		56.69p
Diluted net asset value per Ordinary Share		20		58.14p		56.69p
Adjusted basic net asset value per Ordinary Share		20		65.35p		66.71p
Adjusted diluted net asset value per Ordinary Share		20		65.35p		66.71p

The interim condensed consolidated financial statements were approved at a meeting of the Board of Directors held on 25 November 2009 and signed on its behalf by:

Nigel Rawlings    

Chief Financial Officer

  Interim Consolidated Statement of Changes in Equity

For the six months ended 30 September 2009

	Share	Own	Share	Distributable	Retained	Revaluation	Total	Minority	Total
	Capital	Shares	Premium	Reserve	Earnings	Reserve		Interest	Equity
		Held
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
1 April 2009	31,747	(5,093)	23,212	213,614	(93,233)	3,642	173,889	(178)	173,711
(Loss)/profit attributable to equity holders and minority interest	-	-	-	-	3,821	-	3,821	(38)	3,783
Total comprehensive income	-	-	-	-	3,821	-	3,821	(38)	3,783
Depreciation transfer for land and buildings	-	-	-	-	37	(37)	-	-	-
Cost of employee share-based incentives	-	-	-	-	455	-	455	-	455
Majority interest acquired in former minority interest	-	-	-	-	-	-	-	216	216
30 September 2009	31,747	(5,093)	23,212	213,614	(88,920)	3,605	178,165	-	178,165
(Unaudited)
	Share	Own	Share	Distributable	Retained	Revaluation	Total	Minority	Total
	Capital	Shares	Premium	Reserve	Earnings	Reserve		Interest	Equity
		Held
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
1 April 2008	23,522	(4,561)	2,073	224,116	17,201	3,089	265,440	(57)	265,383
Revaluation of land and buildings	-	-	-	-	-	1,173	1,173	-	1,173
(Loss)/profit attributable to equity holders and minority interest	-	-	-	-	(39,843)	-	(39,843)	(129)	(39,972)
Total comprehensive income	-	-	-	-	(39,843)	1,173	(38,670)	(129)	(38,799)
Depreciation transfer for land and buildings	-	-	-	-	85	(85)	-	-	-
Dividends on Ordinary Shares	-	-	-	(10,502)	-	-	(10,502)	-	(10,502)
Cost of employee share-based incentives	-	-	-	-	782	-	782	-	782
Issue of Ordinary Shares	73	-	524	-	-	-	597	-	597
Transaction costs on issuance of Ordinary Shares	-	-	(10)	-	-	-	(10)	-	(10)
Own shares held	-	(482)	-	-	-	-	(482)	-	(482)
30 September 2008	23,595	(5,043)	2,587	213,614	(21,775)	4,177	217,155	(186)	216,969
(Unaudited)

Interim Consolidated Cash Flow Statement

For the six months ended 30 September 2009

	Six months		Six months
	ended 30		ended 30
	September 2009		September 2008
	Unaudited		Unaudited
	£’000		£’000
Operating activities
Rent received	9,666		7,521
Revenue from pharmacies	15,189		12,082
Fees received	1,605		1,164
Dividend received	211		338
Bank and other interest received	301		839
Expenses paid	(15,334)		(4,581)
Purchases by pharmacies	(10,506)		(8,817)
Interest paid and similar charges	(7,491)		(5,731)
Net cash (outflow)/inflow from operating activities	(6,359)		2,815
Investing activities
Purchase of development and investment property	(11,327)		(44,834)
Proceeds from sale of development and investment property	6,031		-
Purchase of investments in associated companies	-		(5)
Purchase of investments in joint venture companies	(1,036)		-
Proceeds from sale of investments	6,376		-
Purchase of property, plant and equipment	(881)		(2,529)
Proceeds from sale of property, plant and equipment	1,153		-
Cash paid on acquisition of subsidiaries	(64)		(5,801)
Costs associated with registration of pharmacy licences	(1,370)		(441)
Cost of development work-in-progress	(118)		(390)
Loans (advanced)/repaid to associated companies	(785)		290
Loans advanced to joint ventures	(1,416)		(1,888)
Net cash outflow from investing activities	(3,437)		(55,598)
Financing activities
Issue of Ordinary Shares	-		115
Issue costs paid on issuance of Ordinary Shares	-		(10)
Dividends paid	-		(10,502)
Drawdown of term loan	33,547		63,150
Repayment of term loan	(22,885)		(12,148)
Loan issue costs	(420)		(443)
Net cash inflow from financing activities	10,242		40,162
Increase/(decrease) in cash and cash equivalents	446		(12,621)
Opening cash and cash equivalents	24,790		20,460
Closing cash and cash equivalents	25,236		7,839

  Notes to the Interim Condensed Consolidated Financial Statements

For the six months ended 30 September 2009

1.    Corporate information

The interim condensed consolidated financial statements of the Group for the six months ended 30 September 2009 were authorised for issue in accordance with a resolution of the directors on 25 November 2009.

The principal activities of the Group are the ownership and development of a diversified portfolio of primary healthcare properties and the provision of pharmacy and medical services.

The Company's Ordinary Shares are traded on the London Stock Exchange.

2.    Basis of preparation

The interim condensed consolidated financial statements for the six months ended 30 September 2009 have been prepared in accordance with IAS 34 Interim Financial Reporting.

This financial report covers the six month accounting period from 1 April 2009 to 30 September 2009 and the six month accounting period from 1 April 2008 to 30 September 2008. 

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 March 2009 which are prepared in accordance with IFRS as adopted by the European Union.

The financial statements are presented in pounds sterling rounded to the nearest thousand unless specified otherwise.

3.    The results for the six months to 30 September 2009 and to 30 September 2008 are unaudited. The interim accounts do not constitute statutory accounts. The balance sheet as at 31 March 2009 has been extracted from the Group's 2009 annual report and financial statements. The auditor has reported on the 2009 accounts and the report was unqualified.

4.    Significant accounting policies

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year to 31 March 2009 except for the adoption of new Standards and Interpretations as of 1 January 2009 noted below:

IFRS 2 Share based payments - Vesting conditions and cancellations

The standard has been amended to clarify the definition of vesting conditions and to prescribe the accounting treatment of an award that is effectively cancelled because a non-vesting condition is not satisfied. The adoption of this amendment did not have any impact on the financial position or performance of the Group.

IFRS 8 Operating segments

This standard requires disclosure of information about the Group's operating segments and replaces the requirement to determine primary (business) and secondary (geographical) reporting segments of the Group. Adoption of this Standard did not have any effect on the financial position or performance of the Group. The Group determined that the operating segments were the same as the business segments previously identified under IAS 14 Segmental Reporting. Additional disclosures about each of these segments are disclosed in note 6, including revised comparative information.

IAS 1 Revised presentation of financial statements

The revised standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with non-owner changes in equity presented as a single line. In addition, the standard introduces the statement of comprehensive income: it presents all items of recognised income and expense, either in one single statement, or as two linked statements. The Group has elected to present two statements.

IAS 40 Investment properties

An amendment to this standard requires development properties to be classified as part of investment property and fair valued. If fair value cannot be reliably estimated it is carried at cost until construction is complete or fair value can be reliably estimated (whichever is earlier), at which stage it is valued at fair value. The amendment has been applied prospectively for investment properties under construction from 1 April 2009. Consequently, investment properties under construction have been valued on this basis by the Directors as at 30 September 2009. In determining the fair value, the valuer is required to consider the significant risks which are relevant to the development process including, but not limited to, construction and letting risks. Historically, properties under construction or development were included in the Balance Sheet at cost. A provision for impairment was made, if necessary, to reduce the carrying value to the recoverable amount. 

In addition to the above, the Board has issued various other standards, interpretations and amendments that do not presently have, and are not expected to have in future, any material impact on the Group financial statements.

5.    Restatement

During the period it was noted that the loan repayments due within one year had been incorrectly included within non-current liabilities in the 31 March 2009 accounts. The loan repayment structure was fully disclosed in note 28 stating that £30m was due to be repaid on or before 30 March 2010. The balance sheet for the year to 31 March 2009 has therefore been restated in these accounts showing an increase to current liabilities of £30m with a corresponding decrease to non-current liabilities. There is no effect on net assets.

6.    Segmental information

The Group's operating segments are internally reported to the chief operating decision maker based on four business segments, being medical services, pharmacy services, primary care premises investment and primary care premises development and associated property related services. All the Group's activities and investments in primary healthcare properties and related activities are situated in the UK and in Guernsey. 

The Medical Services segment provides medical services, principally outpatient and other services traditionally undertaken in hospitals but now being relocated into GP surgeries, community hospitals and other facilities in the community, in collaboration with GPs.

The Pharmacy services segment operates integrated pharmacies in medical centres. 

The Property Investment segment invests in primary care premises.

The Property Development segment develops primary care premises and undertakes property related services including property fund management.

The following tables present revenue and profit information regarding the Group's business segments for the six months ended 30 September 2009 and 30 September 2008 respectively:

Six months ended 30 September 2009:

	Medical Services	Pharmacy	Property Investment	Property Development	Total	Eliminations	Unallocated items	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue from external customers	372	15,191	10,922	1,014	27,499	(713)	-	26,786
Inter-segment sales	-	-	856	-	856	(856)	-	-
Segment revenue	372	15,191	11,778	1,014	28,355	(1,569)	-	26,786
Operating profit/(loss)	(3,789)	(121)	8,534	(1,206)	3,418	(1,569)	(196)	1,653
Cost of employee share-based incentives	(137)	(91)	(68)	(91)	(387)	-	(68)	(455)
Share of profits/(losses) of associates and joint ventures	(736)	(22)	-	(18)	(776)	-	-	(776)

Realised surplus on sale of pharmacies	-	776	-	-	776	-	-	776
Realised surplus on revaluation of investment property	-	-	117	-	117	-	-	117
Impairment of goodwill	(279)	-	-	-	(279)	-	-	(279)
Segmental result	(4,941)	542	8,583	(1,315)	2,869	(1,569)	(264)	1,036
Gain on disposal of other investments	-	-	-	-	-	-	(409)	(409)
Net finance revenue	-	-	-	-	-	-	2,525	2,525
Profit/(loss) before tax	(4,941)	542	8,583	(1,315)	2,869	(1,569)	2,.670	3,970
Taxation	-	(187)	-	-	(187)	-	-	(187)
Profit/(loss) for the period	(4,941)	355	8,583	(1,315)	2,682	(1,569)	2,670	3,783

Assets and liabilities
Intangible assets	-	14,705	-	28,509	43,214	-	-	43,214
Fixed assets	1,181	2,737	327,530	26,255	357,703	-	1,993	359,696
Equity accounted investments	6,014	6,488	-	8,258	20,760	-	-	20,760
Current assets	794	9,464	20,724	7,471	38,453	-	6,243	44,696
Segment assets	7,989	33,394	348,254	70,493	460,130	-	8,236	468,366
Total assets					460,130	-	8,236	468,366
Segment Liabilities
Current liabilities	(3,211)	(5,132)	(21,014)	(582)	(29,939)	-	(1,563)	(31,502)

Derivative financial instruments					-	-	(16,990)	(16,990)
Non-current liabilities					-	-	(241,709)	(241,709)
Total liabilities					(29,939)	-	(260,262)	(290,201)

 Six months ended 30 September 2008:

	Medical Services	Pharmacy	Property Investment	Property Development	Total	Eliminations	Unallocated items	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue from external customers	166	12,082	8,974	492	21,714	620	-	22,334
Inter-segment sales	-	-	625	-	625	(625)	-	-
Segment revenue	166	12,082	9,599	492	22,339	(5)	-	22,334
Operating profit/(loss)	(4,008)	(2,332)	7,493	(2,933)	(1,780)	(5)	(100)	(1,885)
Cost of employee share-based incentives	(236)	(156)	(156)	(117)	(665)	-	(117)	(782)
Share of profits/(losses) of associates and joint ventures	(372)	(237)	(380)	-	(989)	-	-	(989)

Unrealised deficit on revaluation of investment properties	-	-	(12,584)	-	(12,584)	-	-	(12,584)
Unrealised deficit on revaluation of development properties	-	-	-	(13,448)	(13,448)	-	-	(13,448)
Impairment of goodwill	(95)	-	-	-	(95)	-	-	(95)
Unrealised deficit on revaluation of property, plant and equipment	-	-	(781)	-	(781)	-	(870)	(1,651)
Segmental result	(4,711)	(2,725)	(6,408)	(16,498)	(30,342)	(5)	(1,087)	(31,434)
Unrealised deficit on revaluation of other investments	-	-	-	-	-	-	(2,553)	(2,553)
Net finance revenue/(cost)	-	-	-	-	-	-	(6,862)	(6,862)
Profit/(loss) before tax	(4,711)	(2,725)	(6,408)	(16,498)	(30,342)	(5)	(10,502)	(40,849)
Taxation	-	-	-	-	-	-	877	877
Profit/(loss) for the period	(4,711)	(2,725)	(6,408)	(16,498)	(30,342)	(5)	(9,625)	(39,972)

Twelve months ended 31 March 2009:
Assets and liabilities
Intangibles	-	13,335	-	28,509	41,844	-	-	41,844
Fixed assets	1,115	2,768	299,504	54,767	358,154	-	2,336	360,490
Equity accounted investments	4,328	6,479	-	7,491	18,298	-	-	18,298
Current assets	950	8,778	13,992	11,684	35,404	-	2,281	37,685
Segment assets	6,393	31,360	313,496	102,451	453,700	-	4,617	458,317
Derivative financial instrument					-	-	5,968	5,968
Total assets					453,700	-	10,585	464,285
Segment Liabilities
Current liabilities	(3,684)	(5,149)	(13,357)	(525)	(22,715)	-	(3,583)	(26,298)

Derivative financial instruments					-	-	(25,609)	(25,609)
Non-current liabilities					-	-	(238,667)	(238,667)
Total liabilities					(22,715)	-	(267,859)	(290,574)

7.    Impairments

Goodwill and pharmacy licences

The Group tests goodwill and pharmacy licences for impairment annually (as at 31 March) and when circumstances indicate the carrying value may be impaired. The Group's impairment test for goodwill and pharmacy licences is based on value in use calculations that use a discounted cash flow model. The key assumptions used to determine the recoverable amount for the difference cash generating units were discussed in the annual statements for the year ended 31 March 2009. 

The Group has considered the valuation of goodwill and pharmacy licences as at 30 September 2009 and has concluded that there are no indicators of impairment. A full review will be carried out for the year ended 31 March 2010.

8.    Administrative expenses

	Six months ended 30 September 2009	Six months ended 30 September 2008
	Unaudited	Unaudited
	£’000	£’000
Branch administrative expenses	4,249	3,903
Other administrative expenses	8,853	10,650
	13,102	14,553

 

9.    Taxation on profit on ordinary activities

	Six months ended 30	Six months ended 30
	September	September
	2009	2008
	£'000	£'000
	Unaudited	Unaudited
Tax charged in the income statement
Current income tax:
UK corporation tax	-	-
Deferred tax:
Origination and reversal of temporary differences	187	(877)
Total tax charge/(credit)	187	(877)

10.    Dividends paid on ordinary shares

Dividends on Ordinary Shares declared and paid during the six month period: 

	Number of Ordinary Shares	Rate pence	30 September 2009 £'000	Number of Ordinary Shares	Rate pence	30 September 2008 £'000
Final dividend	306,427,150	0.00	-	235,213,115	4.67	10,984
Dividends paid		0.00	-		4.67	10,984

Dividends paid in 2008 include £597,000 which was taken as a scrip dividend through the issue of 731,665 Ordinary Shares, of which 590,912 shares were issued to the employee benefit trust.

11.    Earnings per ordinary share

The basic earnings per Ordinary Share is based on the profit attributable to equity holders of the parent for the period of £3,821,000 (2008: Loss of £39,843,000) and on 306,427,150 Ordinary Shares (2008: 224,919,329), being the weighted average number of Ordinary Shares in issue in the respective period.

The diluted earnings per Ordinary Share is based on the profit for the period of £3,821,000 (2008: Loss of £39,843,000) and on 306,427,150 Ordinary Shares (2008: 224,919,329), being the weighted average number of Ordinary Shares in issue in the respective period, including share awards that are potentially dilutive.

	Six months ended 30 September 2009	Six months ended 30 September 2008
Weighted average number of shares – basic	306,427,150	224,919,329
Weighted average number of share awards that are potentially dilutive	-	-
Weighted average number of shares – diluted	306,427,150	224,919,329

 

12.    Investment property

Properties are stated at fair value, which has been determined based on valuations performed by the Directors as at 30 September 2009, on the basis of open market value, supported by reference to the market evidence available and the availability of bank debt, in accordance with international valuation standards.

	30 September 2009	31 March 2009
	£'000	£'000
Opening fair value of investment property	277,753	281,245
Separately acquired assets	-	21,251
Additions as part of a business combination	-	3,125
Subsequent expenditure	962	2,627
Disposals	(5,723)	(19,801)
Transfers from development property	38,460	26,160
Transfers from work-in-progress	-	80
Transfers to land and buildings	(276)	(3,565)
Transfers to assets held for sale	(5,390)	-
Unrealised (loss) on revaluation	-	(33,369)
Closing market value	305,786	277,753
Add present value of future lease obligations	1,124	1,172
Closing fair value of investment property	306,910	278,925

Prior to a site being acquired, any site acquisition, investigation and third party bid related costs are included in work-in-progress. Upon acquisition of a site, transfers are made from work-in-progress to development property where future costs are subsequently included. Upon acquisition of an investment property again any pre acquisition costs are transferred from work-in-progress to investment property. Finally costs are transferred to investment property from development property upon practical completion of the medical centre and when tenants have taken occupation or signed lease agreements. Transfers are made to land and buildings in respect of the proportion of those medical centres used by the Group.

Given the Group's increasing revenues from its trading rather than investment operations, the property investment portfolio, which was last valued on 31 March 2009 by Savills Commercial Limited, was valued internally by the Directors at 30 September 2009. During the six month period from 01 April to 30 September the Group exchanged and completed the sale of six assets for a total consideration of £6m which was at or above their 31 March valuation in each case. A further four disposals have completed since 30 September realising an additional £6m which again was at or above their 31 March valuation in each case.

The Group has completed four medical centre developments in the six month period, has a further three such developments on site at 30 September, and will be commencing further developments in the current six month period. Where the expected end valuation of any development might fall short of the total anticipated development costs, provision was made in each case in the accounts of the Group at 31 March 2009. 

13.    Investment properties under construction

Properties are stated at fair value or where this cannot be reliably determined the property is measured at cost until the earlier of the date construction is completed and the date at which fair value becomes reliably determinable. The valuations have been performed by the Directors as at 30 September 2009 on this basis supported by reference to the market evidence available and the availability of bank debt, in accordance with international valuation standards.

	30 September 2009	31 March  2009
	£'000	£'000
Opening fair value of investment properties under construction	-	-
Transfers from development properties	54,767	-
Development costs incurred in period	8,750	-
Capitalised interest	1,095	-
Transfer from work-in-progress	293	-
Disposals	(190)	-
Transfers to investment property	(38,460)	-
Closing fair value of investment properties under construction	26,255	-

The Company has adopted the amendment to IAS 40, as described in note 4, which brings property under construction within the scope of IAS 40 Investment Properties. Consequently, as at 1 April 2009, all investment properties under construction, previously described as development properties, were transferred to investment properties.

14.    Development property

	30 September 2009	31 March  2009
	£'000	£'000
Opening balance	54,767	57,268
Development costs incurred in period	-	39,570
Capitalised interest	-	3,270
Transfer from work-in-progress	-	1,197
Disposals	-	-
Impairment	-	(20,378)
Transfers to investment property under construction	(54,767)	-
Transfers to investment property	-	(26,160)
Closing balance	-	54,767

As described in note 13 above, a change in International Accounting Standards has necessitated the reclassification of development properties to investment properties under construction. This reclassification took place as at 1 April 2009.

Provision has been made against certain developments and plots of land as a result of the movement in property values and estimated fair values at 31 March 2009.

15.    Property, plant and equipment

Additions and disposals

During the six months ended 30 September 2009, the Group acquired assets with a cost of £881,000 and disposed of assets with a cost of £122,000.

16.    Cash and cash equivalents

	30	31
	September	March
	2009	2009
	£'000	£'000
Petty cash	1	1
Cash held in current account	16,639	12,193
Restricted cash	8,582	12,582
Rent held on deposit	14	14
	25,236	24,790

Restricted cash is in respect of an interest payment guarantee and also ring fenced for committed property development expenditure which is released to pay contractors invoices directly.

Rent held on deposit is subject to the respective tenant's lease agreement and is not available for use by the Group. All interest earned on these deposits is due to the respective tenant.

17.    Assets classified as held for sale and disposal groups

	Investment	Pharmacy	Property, plant
	Properties	Licences	and equipment	Total	Total
	30/09/09	30/09/09	30/09/09	30/09/09	31/03/09
	£'000	£'000	£'000	£'000	£'000
Transferred from investment properties	5,390	-	-	5,390	-
Transferred from pharmacy licences	-	186	-	186	188
Transferred from property, plant and equipment	-	-	230	230	458
Impairment during the period	-	-	(91)	(91)	(137)
At 30 September 2009 / 31 March 2009	5,390	186	139	5,715	509

The above amounts represent the net book values of assets in disposal groups held for sale. The amounts relate to the disposal of four properties and two pharmacies. The sale of the four properties and two pharmacies completed during October and November 2009.

Pharmacy licences are the costs incurred in developing or acquiring pharmacy licences. The property, plant and equipment value represents the fit out expenditure of the pharmacies which are being disposed of.

18.    Interest-bearing loans and borrowings

The Group refinanced a portfolio of seven properties, previously secured to National Australia Bank ("NAB"), with Aviva from whom a long term loan amounting to £24.5m was drawn on 23 September 2009 at an all in fixed rate of 5.85%. On 30 September 2009 £21.5m was repaid to NAB reducing the loan from NAB from £190m to £168.5m on that date. The NAB loan will be reduced further to £160m as required on or before 30 March 2010. 

The Group's loans from Aviva have increased to £75m at 30 September 2009 and the Group has offers of finance from Aviva available to assist with funding for all current and prospective developments planned to start shortly.

The Group's loan from RBS reduced to £6.8m in the period.

  19.    Share capital

				£'000
Consolidated and Company Authorised
3,000,000,000 Ordinary Shares of 10p each				300,000
20,000,000 Preference Shares of 10p each				2,000
				302,000
		30		31
		September		March
		2009		2009
	Number of	Share	Number of	Share
	Shares	Capital	Shares	Capital
		£'000		£'000
Ordinary Shares issued and fully paid
At 1 April	317,467,036	31,747	235,213,115	23,522
Issued in period	-	-	82,253,921	8,225
	317,467,036	31,747	317,467,036	31,747
Own shares held	(11,039,886)	(5,093)	(11,039,886)	(5,093)
Total Share Capital	306,427,150	26,654	306,427,150	26,654

The own shares held are held by the Assura Group Limited Employee Benefit Trust for the purposes of the Assura Group Limited Executive Incentive Plan.

20.    Net asset values

The basic net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £178,165,000 (31 March 2009: £173,711,000) on 306,427,150 (31 March 2009: 306,427,150) Ordinary Shares in issue at the 30 September 2009. 

The adjusted basic net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £200,246,000 (31 March 2009: £204,413,000) which is after adding back the 'own shares held' reserve of £5,093,000 (31 March 2009: £5,093,000) and the derivative financial instrument at fair value of a liability of £16,990,000 (31 March 2009: liability of £25,609,000) and on 306,427,150 (31 March 2009: 306,427,150) Ordinary Shares in issue at 30 September 2009.

The diluted net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £178,165,000 (31 March 2009: £173,711,000) and on 306,427,150 (31 March 2009: 306,427,150) Ordinary Shares in issue at 30 September 2009. 

The adjusted diluted net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £200,246,000 (31 March 2009: £204,413,000) which is after adding back the 'own shares held' reserve of £5,093,000 (31 March 2009: £5,093,000) and the derivative financial instrument at fair value of a liability of £16,990,000 (31 March 2009: liability of £25,609,000) and on 306,427,150 (31 March 2009: 306,427,150) Ordinary Shares in issue at 30 September 2009.

21.    Commitments

At the period end the Group had 3 developments on-site with a contracted total expenditure of £22m (31 March 2009: £51m) of which £14m (31 March 2009: £38m) had been expended.  In addition to these property developments in progress, the Group has an identified development pipeline amounting to a further £22m (31 March 2009: £84m) spread across 5 properties.  This pipeline will only be formally contracted if development finance can be obtained on acceptable terms.

In addition the Group is committed to invest £2.2m of capital into GPCos (31 March 2009: £2.5m).

22.    Related parties

During the year the Group entered into transactions, in the ordinary course of business, with related parties.

	Sales	Purchases
	To	From
	£'000	£'000
Related Party
Associates
30 September 2009	1,014	-
30 September 2008	492	-
Joint Ventures
30 September 2009	76	-
30 September 2008	4	-

	Amounts	Amounts
	Owed By	Owed To
	£'000	£'000
Related Party
Associates
30 September 2009	5,337	-
31 March 2009	4,899	-
Joint Ventures
30 September 2009	11,920	3,237
31 March 2009	9,475	2,655

23.    Events after the balance sheet date

During October and November 2009 the group has completed the sale of all assets classified as held for sale as at the balance sheet date as described in note 17.

24.    A copy of this statement has been sent to every shareholder. Further copies are available from the Company's registered office or from the website www.assuragroup.co.uk.

 

END

 

 

IR ILFFALDLEFIA