Final Results Part 2
Assura Group Limited
('Assura' or 'the Group' or 'the Company')
Audited results for the fifteen months ended 31 March 2008
Part 2
The above share of profits/(losses) include £4,854,000 (2006: £nil) in respect of developed investment property revalued for the first time since practical completion.
|
11. Exceptional pharmacy establishment cost |
|
15 months ended 31 March |
12 months ended 31 |
|
|
|
£'000 |
£'000 |
|
Pharmacy establishment cost |
|
- |
1,105 |
The Company entered into an arrangement with Pharma-e Limited, of which Dr John Curran is a Director and shareholder, to compensate Pharma-e Limited for consultancy services provided to the Group in connection with establishment of the pharmacy business of Assura Pharmacy Limited. The consideration was met by the issue of 650,000 Ordinary shares in the Company to Pharma-e Limited on 15 May 2006. The fair value of the shares issued was based on the market value of the shares on the date of issue. The weighed average fair value is the same as the fair value.
|
12. Termination of investment management services |
|
15 months ended 31 March |
12 months ended 31 |
|
|
|
£'000 |
£'000 |
|
Fees received |
|
19,985 |
- |
|
Fees payable to sub-advisers |
|
(5,901) |
- |
|
Other expenses |
|
(240) |
- |
|
Goodwill impairment |
|
(7,914) |
- |
|
|
|
5,930 |
- |
On 16 August 2007 the Company announced the termination of the investment management services provided by Assura Fund Management LLP, a subsidiary of the Company, to Stobart Group Limited (formerly The Westbury Property Fund Limited), subject to shareholder approval by the latter company.
Termination of the services was approved by the shareholders of Stobart Group Limited, at an Extraordinary General Meeting held on 19 September 2007, the profit for the Group from the payment of a termination fee by Stobart Group Limited is after allowance for payments to sub-advisers, taxation and estimated goodwill impairment.
That part of the payment which related to a performance fee due to the Company was taken in shares in Stobart Group Limited. As a result the Company holds 6,382,474 (2.7%) Ordinary Shares in Stobart Group Limited which are available for resale subject to a lock-in of two years commencing on the date of issue of the shares. The share price at date of issue was 145.5p and at 31 March 2008, 130.0p.
|
13. Finance revenue |
|
15 months ended 31 March |
12 months ended 31 |
|
|
|
£'000 |
£'000 |
|
Bank and other interest |
|
1,044 |
1,032 |
|
Unrealised profit on revaluation of derivative financial instrument |
|
3,660 |
2,202 |
|
Realised profit on revaluation of derivative financial instrument |
|
- |
3,473 |
|
Income from investments |
|
172 |
- |
|
|
|
4,876 |
6,707 |
In 2005 the Company entered into a 20 year interest rate swap at a rate of 4.5725%, on its full debt facility of £100m. On 2 November 2006, the swap was increased to £200m (£150m effective from 30 June 2007 and £200m effective from 31 December 2007) all at a new rate of 4.59% expiring on 31 December 2027. Throughout the period, the swap rate was below the three month LIBOR rate hence the Company benefited from income arising from the swap. Based on the actual 20 year swap rate at 31 March 2008, the fair value of this swap was a surplus of £5,862,000 (2006: £2,202,000).
|
14. Finance costs |
|
15 months ended 31 |
12 months ended 31 |
|
|
|
£'000 |
£'000 |
|
Long term loan interest payable |
|
9,221 |
1,782 |
|
Interest capitalised on developments |
|
(3,415) |
(734) |
|
Swap interest |
|
(2,328) |
(197) |
|
Non-utilisation fees |
|
86 |
190 |
|
Bank and other interest payable |
|
- |
34 |
|
Bank charges |
|
40 |
31 |
|
|
|
3,604 |
1,106 |
Interest was capitalised at 6% (2006: 5.45%).
15. Taxation
A reconciliation of the income tax charge applicable to the results from ordinary activities at the statutory income tax rate to income tax expense at the Group's effective income tax rate for the year is as follows:
|
|
|
|
|||||
|
|
|
|
|
|
|
15 months ended 31 March |
12 months ended 31 |
|
|
|
|
|
|
|
£'000 |
£'000 |
|
Profit from continuing operations before taxation |
|
|
|
12,639 |
18,800 |
||
|
Loss from discontinued operations before taxation |
|
|
|
(719) |
(331) |
||
|
Gain on disposal of discontinued operations |
|
|
|
874 |
- |
||
|
Net profit before taxation |
|
|
|
12,794 |
18,469 |
||
|
|
|
|
|
|
|
||
|
UK Income tax at rate of 22% |
|
|
|
2,815 |
4,063 |
||
|
Effects of: |
|
|
|
|
|
|
|
|
Capital gains on revaluation of investment properties not taxable |
(1,954) |
(3,749) |
|||||
|
Unrealised deficits not tax deductible on revaluation of premises and other investments |
320 |
- |
|||||
|
Income not taxable including interest receivable |
|
|
(268) |
(227) |
|||
|
Gain on revaluation of derivative financial instrument not taxable |
|
|
(805) |
(1,248) |
|||
|
Net effect of inter-company loan interest |
|
|
(1,633) |
(2,031) |
|||
|
Performance fee provision not tax deductible |
|
- |
(222) |
||||
|
Share-based payments not tax deductible |
|
375 |
524 |
||||
|
Unrealised gains on revaluation of investments in associates |
|
(1,119) |
- |
||||
|
Losses arising not relievable against current tax |
|
1,901 |
2,930 |
||||
|
Deferred tax asset previously not recognised |
|
(637) |
- |
||||
|
|
|
|
|
|
|
(1,005) |
40 |
The Company and its Guernsey registered subsidiaries, Assura Property Limited, Assura Administration Limited and Assura Pharmacy Holdings Limited, have obtained exempt company status in Guernsey under the terms of the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 so that they are exempt from Guernsey taxation on income arising outside Guernsey and on bank interest receivable in Guernsey. Each Company is, therefore, only liable to a fixed fee of £600 per annum. The directors intend to conduct these companies such that they continue to remain eligible for exemption. A taxation charge of £1,800 arose in Guernsey.
Assura Property Limited is subject to United Kingdom income tax on income arising on the investment properties, after deduction of its debt financing costs, allowable expenses and capital allowances. Assura Property Limited also has a place of establishment in the UK and provides management, administration and related services which are liable to corporation tax in the UK.
The Company's UK subsidiaries are subject to United Kingdom corporation tax on their profits less losses, although no charge (2006: £40,000) was incurred in the period.
With effect from 3 April 2008 the Group's affairs are conducted such that it will be considered to be resident in the UK for tax purposes.
16. Profit for the period from discontinued operations
On 12 September 2007 the Group disposed of its 70% holding in BHE Developments Limited whose activity was property development for a consideration of £1. The business, which is loss making, is outside the scope of Assura's core business.
The results of BHE Developments Limited for the period to 12 September 2007 and 31 December 2006 are presented below:
|
|
|
15 months ended 31 March |
12 months ended 31 |
|
|
|
£'000 |
£'000 |
|
Revenue |
|
36 |
- |
|
Administrative expenses |
|
(758) |
(331) |
|
Finance revenue |
|
3 |
- |
|
Loss before taxation |
|
(719) |
(331) |
|
Gain on disposal of discontinued operations |
|
874 |
- |
|
Profit/(loss) for the period from discontinued operations |
|
155 |
(331) |
|
|
|
|
|
At the date of disposal the net liabilities of BHE Developments were £874,000, and the net liabilities of the company at 31 December 2006 were £155,000. The net cash flows attributable to BHE Developments Limited are as follows:
|
|
|
15 months ended 31 March |
12 months ended 31 December |
|
|
|
|
|
|
Operating cash flows |
|
(719) |
(331) |
|
Net cash outflow |
|
(719) |
(331) |
|
|
|
31/03/08 |
31/12/06 |
|
|
|
|
|
|
Profit/(loss) per share from discontinued operations (pence) |
|
|
|
|
Basic |
|
0.07 |
(0.17) |
|
Diluted |
|
0.07 |
(0.17) |
The total disposal consideration and major classes of assets and liabilities sold and is analysed as follows:
|
|
31/03/08 |
31/12/06 |
|
|
£'000 |
£'000 |
|
Assets and liabilities disposed of other than cash |
|
- |
|
Intangible assets |
160 |
- |
|
Property, plant and equipment |
22 |
- |
|
Debtors |
5,902 |
- |
|
Creditors |
(793) |
- |
|
Inter-Group loan |
(1,900) |
- |
|
Interest-bearing liabilities |
(4,300) |
- |
|
Total assets and liabilities disposed of other than cash and cash equivalents |
(909) |
- |
|
|
31/03/08 |
31/12/06 |
|
|
£'000 |
£'000 |
|
Cash and cash equivalents relating to the disposal |
- |
- |
|
Cash and short-term deposits in BHE Developments on disposal |
(35) |
- |
|
Net cash outflow from disposal of subsidiary undertaking |
(35) |
- |
17. Earnings per Ordinary Share
The basic profit per Ordinary Share is based on the profit attributable to equity holders of the parent for the period of £14,071,000 (2006: £18,900,000) and on 226,284,648 Ordinary Shares (2006: 195,205,087), being the weighted average number of Ordinary Shares in issue in the respective year.
The diluted profit per Ordinary Share is based on the profit for the period attributable to equity holders of the parent of £14,071,000 (2006: £18,900,000) and on 228,742,375 Ordinary Shares (2006: 200,310,356), being the weighted average number of Ordinary Shares in issue in the respective year.
|
|
15 months ended 31 March
2008 |
12 months ended 31 December
2006 |
|
Weighted average number of shares – basic
|
226,284,648
|
195,205,087
|
|
Weighted average number of own shares held
|
2,457,727
|
5,105,269
|
|
Weighted average number of shares – diluted
|
228,742,375
|
200,310,356
|
The following reflects the income and share data used in the basic and diluted earnings per share computations:
|
|
15 months ended 31 |
12 months ended 31 December |
|
|
£'000 |
£'000 |
|
Profit for the year from continuing operations |
13,644 |
18,760 |
|
Add minority liabilities |
272 |
471 |
|
Profit attributable to equity holders of the parent - continuing operations |
13,916 |
19,231 |
|
Profit/(loss) attributable to equity holders of the parent - discontinued operations |
155 |
(331) |
|
Profit attributable to equity holders of the parent |
14,071 |
18,900 |
Discontinued operations
Profit/(loss) per share for the discontinued operations is derived from the net profit attributable to equity holders of the parent from discontinuing operations of £155,000 (2006: loss of £331,000), divided by the weighted average number of Ordinary Shares for both basic and diluted amounts as per the table above.
18. Dividends paid on Ordinary Shares
|
|
Number of Ordinary Shares
|
Rate pence
|
2008
|
Number of Ordinary Shares
|
Rate pence
|
2006
|
|
|
|
|
£’000
|
|
|
£’000
|
|
Final dividend for 2006 (2005)
|
233,998,471
|
4.00
|
9,360
|
142,403,847
|
3.34
|
4,756
|
|
Interim dividend for 2008 (2006)
|
234,463,115
|
2.33
|
5,463
|
233,998,471
|
2.00
|
4,680
|
|
Second interim dividend for 2008
|
235,213,115
|
1.75
|
4,116
|
|
-
|
-
|
|
|
|
8.08
|
18,939
|
|
5.34
|
9,436
|
Following shareholder approval, and application to the Royal Court of Guernsey, £25,000,000 was transferred from the share premium account to distributable reserves on 2 June 2006 and a further £226,678,000 was similarly transferred on 29 June 2007. Dividends on 'own shares held' are recognised in distributable reserves.
The directors intend to recommend a final dividend of 4.67p per Ordinary Share be paid to shareholders on the Company's register on 27 June 2008.
19. Segmental information
The directors are of the opinion that the Group is engaged in four business segments, being medical and pharmacy services, primary care premises investment, primary care premises development and associated property related services. All the Group's activities and investments in primary health care properties and related activities are situated in the UK and in Guernsey.
The primary investment segment reporting format is determined to be business segments as the Group's risks and rates of return are affected predominantly by differences in the products and services provided. There is no secondary information as the activities of the Company are deemed to be in one geographical location, the UK and Guernsey. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.
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 GP's.
The Pharmacy 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.
Unrealised surplus on revaluation of investment properties is split between Property Investment and Property Development on the basis that after transfer of the property to investment property, the first revaluation surplus is shown in the Property Development segment.
Transfer prices between business segments are set on an arm's length basis in a manner similar to transactions with third parties. Segment revenue, segment expense and segment result include transfers between business segments. Those transfers are eliminated on consolidation.
The following table presents revenue, profit and certain assets and liability information regarding the Group's business segments:
15 months ended 31 March 2008:
|
|
Medical Services |
Pharmacy |
Property Investment |
Property Development |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Revenue from external customers |
47 |
17,866 |
20,245 |
- |
|
Inter-segment sales |
- |
- |
1,058 |
- |
|
Segment revenue |
47 |
17,866 |
21,303 |
- |
|
|
|
|
|
|
|
Operating profit/(loss) |
(7,823) |
(3,785) |
14,742 |
(4,711) |
|
Cost of employee share-based incentives |
(677) |
(402) |
(101) |
(383) |
|
Share of profits/(losses) of associates and joint ventures |
(534) |
(17) |
- |
5,087 |
|
Unrealised surplus on revaluation of investment properties |
- |
- |
1,167 |
7,713 |
|
Unrealised deficit on revaluation of property, plant and equipment |
- |
- |
(464) |
- |
|
Segmental result |
(9,034) |
(4,204) |
15,344 |
7,706 |
|
Unrealised deficit on revaluation of other investments |
- |
- |
- |
- |
|
Termination of investment management services |
|
|
|
|
|
Fees received |
- |
- |
- |
- |
|
Payment to sub-advisors and other expenses |
- |
- |
- |
- |
|
Goodwill impairment |
- |
- |
- |
- |
|
|
- |
- |
- |
- |
|
Net finance revenue/(cost) |
- |
- |
- |
- |
|
Gain on disposal of discontinued operations |
- |
- |
- |
- |
|
Profit/(loss) before tax |
(9,034) |
(4,204) |
15,344 |
7,706 |
|
Taxation |
- |
- |
- |
- |
|
Profit/(loss) for the period |
(9,034) |
(4,204) |
15,344 |
7,706 |
|
|
|
|
|
|
|
Assets and liabilities |
|
|
|
|
|
Fixed assets |
543 |
3,025 |
301,310 |
57,268 |
|
Equity accounted investments |
1,030 |
7,589 |
- |
8,744 |
|
Current assets |
2,120 |
6,442 |
19,120 |
1,209 |
|
Segment assets |
3,693 |
17,056 |
320,430 |
67,221 |
|
Unallocated assets |
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
Segment Liabilities |
|
|
|
|
|
Current liabilities |
(1,421) |
(4,001) |
(6,343) |
(241) |
|
Non-current liabilities |
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
Other segmental information |
|
|
|
|
|
Capital expenditure: |
|
|
|
|
|
Property, plant and equipment |
485 |
1,816 |
14,225 |
- |
|
Intangible assets |
1,418 |
- |
6,573 |
- |
|
Depreciation |
279 |
313 |
460 |
- |
|
|
Eliminations and Unallocated items |
Continuing |
Discontinued |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Revenue from external customers |
2,590 |
40,748 |
- |
|
|
Inter-segment sales |
(1,058) |
- |
- |
|
|
Segment revenue |
1,532 |
40,748 |
- |
|
|
|
|
|
|
|
|
Operating profit/(loss) |
(3,245) |
(4,822) |
(719) |
|
|
Cost of employee share-based incentives |
(141) |
(1,704) |
- |
|
|
Share of profits/(losses) of associates and joint ventures |
- |
4,536 |
- |
|
|
Unrealised surplus on revaluation of investment properties |
- |
8,880 |
- |
|
|
Unrealised deficit on revaluation of property, plant and equipment |
- |
(464) |
- |
|
|
Segmental result |
(3,386) |
6,426 |
(719) |
|
|
Unrealised deficit on revaluation of other investments |
(989) |
(989) |
- |
|
|
Termination of investment management services |
|
|
|
|
|
Fees received |
19,985 |
19,985 |
- |
|
|
Payment to sub-advisors and other expenses |
(6,141) |
(6,141) |
- |
|
|
Goodwill impairment |
(7,914) |
(7,914) |
- |
|
|
|
5,930 |
5,930 |
- |
|
|
Net finance revenue/(cost) |
1,272 |
1,272 |
- |
|
|
Gain on disposal of discontinued operations |
- |
- |
874 |
|
|
Profit/(loss) before tax |
2,827 |
12,639 |
155 |
|
|
Taxation |
1,005 |
1,005 |
- |
|
|
Profit/(loss) for the period |
3,832 |
13,644 |
155 |
|
|
|
|
|
|
|
|
Assets and liabilities |
|
|
|
|
|
Fixed assets |
1,500 |
363,646 |
- |
363,646 |
|
Equity accounted investments |
- |
17,363 |
- |
17,363 |
|
Current assets |
8,203 |
37,103 |
- |
37,094 |
|
Segment assets |
9,703 |
418,103 |
- |
418,376 |
|
Unallocated assets |
|
52,989 |
- |
52,989 |
|
Total assets |
|
471,092 |
- |
471,092 |
|
|
|
|
|
|
|
Segment Liabilities |
|
|
|
|
|
Current liabilities |
(4,112) |
(16,118) |
- |
(16,118) |
|
Non-current liabilities |
|
(189,591) |
- |
(189,591) |
|
Total liabilities |
|
(205,709) |
- |
(205,709) |
|
|
|
|
|
|
|
Other segmental information |
|
|
|
|
|
Capital expenditure: |
|
|
|
|
|
Property, plant and equipment |
42 |
16,568 |
- |
16,568 |
|
Intangible assets |
- |
7,991 |
- |
7,991 |
|
Depreciation |
68 |
1,120 |
- |
1,120 |
Year ended 31 December 2006:
|
|
Medical Services |
Pharmacy |
Property Investment |
Property Development |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Revenue from external customers |
- |
2,792 |
13,331 |
- |
|
Inter-segment sales |
- |
- |
114 |
- |
|
Segment revenue |
- |
2,792 |
13,445 |
- |
|
|
|
|
|
|
|
Operating profit/(loss) |
(1,993) |
(1,970) |
6,720 |
(4,102) |
|
Cost of employee share-based incentives |
(241) |
(281) |
(139) |
(525) |
|
Share of losses of associates and joint ventures |
(37) |
- |
- |
(1,417) |
|
Unrealised surplus on revaluation of properties |
- |
- |
15,558 |
1,483 |
|
Exceptional pharmacy establishment cost |
- |
(1,105) |
- |
- |
|
Segmental result |
(2,271) |
(3,356) |
22,139 |
(4,561) |
|
Movement in performance fee provision |
- |
- |
- |
- |
|
Net finance revenue |
- |
- |
- |
- |
|
Profit/(Loss) before tax |
(2,271) |
(3,356) |
22,139 |
(4,561) |
|
Taxation |
- |
- |
- |
- |
|
Profit/(loss) for the year |
(2,271) |
(3,356) |
22,139 |
(4,561) |
|
|
|
|
|
|
|
Assets and liabilities |
|
|
|
|
|
Property, plant and equipment |
182 |
1,807 |
256,567 |
35,222 |
|
Equity accounted investments |
869 |
- |
- |
1,070 |
|
Current assets |
1,392 |
2,006 |
9,277 |
203 |
|
Segment assets |
2,443 |
3,813 |
265,844 |
36,495 |
|
Unallocated assets |
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
Segment liabilities Current liabilities |
(3,433) |
(4,441) |
(5,199) |
(470) |
|
Non-current liabilities |
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
Other segmental information |
|
|
|
|
|
Capital expenditure: |
|
|
|
|
|
Property, plant and equipment |
1,016 |
1,564 |
3,358 |
- |
|
Intangible assets |
- |
248 |
- |
3,718 |
|
Depreciation |
92 |
53 |
80 |
- |
|
|
Eliminations and Unallocated items |
Continuing |
Discontinued |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Revenue from external customers |
- |
16,123 |
- |
|
|
Inter-segment sales |
(114) |
- |
- |
|
|
Segment revenue |
(114) |
16,123 |
- |
|
|
|
|
|
|
|
|
Operating profit/(loss) |
- |
(1,345) |
(331) |
|
|
Cost of employee share-based incentives |
(93) |
(1,279) |
- |
|
|
Share of losses of associates and joint ventures |
- |
(1,454) |
- |
|
|
Unrealised surplus on revaluation of properties |
- |
17,041 |
- |
|
|
Exceptional pharmacy establishment cost |
- |
(1,105) |
- |
|
|
Segmental result |
(93) |
11,858 |
(331) |
|
|
Movement in performance fee provision |
1,010 |
1,010 |
- |
|
|
Net finance revenue |
5,601 |
5,601 |
(331) |
|
|
Profit/(Loss) before tax |
6,518 |
18,469 |
- |
|
|
Taxation |
(40) |
(40) |
(331) |
|
|
Profit/(loss) for the year |
6,478 |
18,429 |
- |
|
|
|
|
|
|
|
|
Assets and liabilities |
|
|
|
|
|
Property, plant and equipment |
- |
293,778 |
9 |
293,787 |
|
Equity accounted investments |
- |
1,939 |
- |
1,939 |
|
Current assets |
- |
12,878 |
820 |
13,698 |
|
Segment assets |
- |
308,595 |
829 |
309,424 |
|
Unallocated assets |
|
18,841 |
- |
18,841 |
|
Total assets |
|
327,436 |
829 |
328,265 |
|
|
|
|
|
|
|
Segment liabilities Current liabilities |
- |
(13,543) |
(984) |
(14,527) |
|
Non-current liabilities |
|
(46,238) |
- |
(46,238) |
|
Total liabilities |
|
(59,781) |
(984) |
(60,765) |
|
|
|
|
|
|
|
Other segmental information |
|
|
|
|
|
Capital expenditure: |
|
|
|
|
|
Property, plant and equipment |
196 |
6,134 |
- |
6,134 |
|
Intangible assets |
27,104 |
31,070 |
- |
31,070 |
|
Depreciation |
78 |
303 |
- |
303 |
20. Investments in subsidiaries
A table listing all the subsidiaries, including other dormant subsidiaries, is below:
|
Name of subsidiary |
Place of incorporation |
Share-holding 2008 |
Share-holding 2006 |
Business activity |
|
Assura Property Limited |
Guernsey |
100% |
100% |
Property investment |
|
Assura Pharmacy Holdings Limited |
Guernsey |
100% |
100% |
Holding company |
|
Assura Pharmacy Limited |
England |
100% |
100% |
Pharmacy |
|
Assura PharmaInvest Limited |
England |
100% |
- |
Holding Company |
|
Clearup Limited |
England |
100% |
- |
Dormant |
|
P&L Worsley Limited |
England |
100% |
- |
Dormant |
|
Armside Chemists Limited |
England |
100% |
- |
Dormant |
|
Assura Mobility Limited |
England |
100% |
- |
Dormant |
|
Trinity Healthcare Consortium Limited |
England |
100% |
100% |
Dormant |
|
Crown Heights Health Consortium Limited |
England |
100% |
100% |
Dormant |
|
Crown Heights Consortium (No. 2) Limited |
England |
100% |
- |
Dormant |
|
Assura Medical Limited |
England |
100% |
100% |
Management of clinical services |
|
Assura Estates Limited |
Guernsey |
100% |
100% |
Dormant |
|
Assura Medical Solutions Limited |
England |
100% |
100% |
Dormant |
|
Assura Administration Limited |
Guernsey |
100% |
100% |
Company administration services |
|
Assura LIFT Holdings Limited |
England |
100% |
100% |
Investment holding company |
|
Assura Intelligence Limited (formerly Stream Partners Limited) |
England |
100% |
100% |
Medical data processing company |
|
Assura Investments Limited (formerly Strategis Limited) |
England |
100% |
100% |
Property investment |
|
Assura Services Limited |
England |
100% |
100% |
Dormant |
|
Assura Fund Management LLP |
England |
100% |
100% |
Fund management |
|
PCI Management Limited |
England |
100% |
100% |
Holding company |
|
Primary Care Initiatives (Macclesfield) Limited |
England |
100% |
100% |
Property investment |
|
BHE (Heartlands) Limited |
England |
100% |
100% |
Property investment |
|
BHE (Bonnyrigg) Limited |
England |
100% |
100% |
Dormant |
|
BHE (Wand) Limited |
England |
100% |
100% |
Dormant |
|
BHE Management Services Limited |
England |
100% |
100% |
Management services |
|
Assura (Scotland) Limited |
Scotland |
100% |
100% |
Dormant |
|
BHE (St James) Limited |
England |
100% |
100% |
Property investment |
|
Assura Finance Limited |
England |
100% |
100% |
Finance company |
|
Assura Nominees Limited |
Guernsey |
100% |
100% |
Nominee holding company |
|
Assura Management Services Limited |
England |
100% |
- |
Management services |
|
Assura Diagnostics Limited |
England |
80% |
- |
Hirer of diagnostic equipment |
|
Assura Property Management Limited |
England |
100% |
- |
Property management |
|
Assura Properties Limited |
England |
100% |
- |
Property investment |
|
Assura Properties UK Limited |
England |
100% |
- |
Property investment |
|
Urosonics Limited |
England |
100% |
- |
Dormant |
|
Cystoscope Hire Limited |
England |
100% |
- |
Dormant |
|
Assura Retail York Limited |
England |
100% |
- |
Property Investment |
|
Assura Health and Wellness Centres Limited |
England |
100% |
- |
Trading company |
|
Assura Care Homes Limited |
England |
100% |
- |
Trading company |
|
GB Primary Care (SWH) Limited |
England |
100% |
- |
Dormant |
|
BHE Developments Limited (sold 12 September 2007) |
England |
- |
70% |
Property investment |
21. Investment Property
Properties are stated at fair value, which has been determined based on valuations performed by Savills Commercial Limited as at 31 March 2008, on the basis of open market value, supported by market evidence, in accordance with international valuation standards.
|
|
|
31/03/08 |
31/12/06 |
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
Opening fair value of investment property |
|
211,751 |
131,643 |
|
Acquisitions |
|
22,639 |
22,272 |
|
Acquired as part of a business combination |
|
- |
16,462 |
|
Subsequent expenditure |
|
5,315 |
2,435 |
|
Transfers from development property |
|
46,277 |
24,251 |
|
Transfers from work in progress |
|
18 |
186 |
|
Transfers to land & buildings |
|
(13,635) |
(2,539) |
|
Unrealised profit on revaluation |
|
8,880 |
17,041 |
|
Closing market value |
|
281,245 |
211,751 |
|
Add minimum payment under finance leases |
|
1,266 |
1,381 |
|
Closing fair value of investment property |
|
282,511 |
213,132 |
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.
22. Development Property
|
|
|
31/03/08 |
31/12/06 |
|
|
|
£'000 |
£'000 |
|
Opening balance |
|
35,231 |
15,789 |
|
Development costs incurred in year |
|
64,891 |
42,958 |
|
Capitalised interest |
|
3,415 |
734 |
|
Transfer from work in progress |
|
8 |
1 |
|
Transfers to investment property |
|
(46,277) |
(24,251) |
|
Closing balance |
|
57,268 |
35,231 |
|
|
|
|
|
23. Investments in Associates and Joint Ventures
The Group has the following investments in associates:
Associates
|
|
Year |
Shares held |
|
|
Name of Company |
Ended |
by the Group |
|
|
|
|
2008 |
2006 |
|
Infracare (Midlands) Limited |
30 September |
257 Ordinary Shares of £1 |
240 Ordinary Shares of £1 |
|
GB Consortium 1 Limited |
31 March |
6,252 Ordinary Shares of £1 |
4,200 Ordinary Shares of £1 |
|
GB Consortium 2 Limited |
31 March |
2,322 Ordinary Shares of £1 |
27 Ordinary Shares of £1 |
|
GB Primary Care (Fourth Wave Bids) Limited |
31 March |
1 Ordinary Share of £1 |
1 Ordinary Share of £1 |
|
GB Primary Care Limited |
31 March |
8,500 Ordinary Shares of £1 |
- |
|
|
% held |
Place of |
Business |
|
|
Name of Company |
|
Incorporation |
Activity |
|
|
|
2008 |
2006 |
|
|
|
Infracare (Midlands) Limited |
43% |
40% |
England |
Holds 60% of the share capital in the Dudley South LIFT Company |
|
GB Consortium 1 Limited |
40% |
40% |
England |
Holds 60% of the share capital in the Barnet, Enfield and Haringey, and Liverpool and Sefton LIFT Companies |
|
GB Consortium 2 Limited |
45% |
45% |
England |
Holds 60% of the share capital in the Coventry LIFT Company |
|
GB Primary Care (Fourth Wave Bids) Limited |
50% |
50% |
England |
Fourth wave LIFT bidding vehicle and preferred bidder for SE Essex LIFT Company |
|
GB Primary Care Limited |
85% |
50% |
England |
Holds 60% of the share capital in the South East Essex LIFT Company |
The above investments comprise:
|
|
|
|
|
31/03/08 |
31/12/06 |
|
|
|
|
|
Group |
Group |
|
|
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
|
|
Cost of shares |
|
|
|
17 |
4 |
|
Loans |
|
|
|
5,057 |
2,483 |
|
Share of accumulated profit/(loss) |
|
|
|
3,670 |
(1,417) |
|
|
|
|
|
8,744 |
1,070 |
The above loans are unsecured, due after one year, and carry interest at 12-13%.
The following information is given in respect of the Group's share of all associates:
|
|
31/03/08 |
31/12/06 |
|
|
Group |
Group |
|
|
£'000 |
£'000 |
|
|
|
|
|
Investment property |
28,935 |
22,098 |
|
Current assets |
6,042 |
8,006 |
|
|
34,977 |
30,104 |
|
|
|
|
|
Liabilities due within one period |
2,529 |
2,187 |
|
Liabilities due after one period |
28,778 |
29,334 |
|
|
31,307 |
31,521 |
|
|
|
|
|
Share of net assets/(liabilities) |
3,670 |
(1,417) |
|
Add back loans |
5,057 |
2,483 |
|
Other |
17 |
4 |
|
Carrying amount of associates |
8,744 |
1,070 |
|
Share of associates revenue and profit: |
|
|
|
Revenue |
3,462 |
973 |
|
Profit/(loss) |
5,087 |
(1,417) |
The movement on investments in associates during the year was as follows:
|
|
31/03/08 |
31/12/06 |
|
|
Group |
Group |
|
|
£'000 |
£'000 |
|
Opening balance |
1,070 |
1,368 |
|
Acquired in period |
3 |
- |
|
Net loans advanced or transferred |
2,574 |
1,119 |
|
Share of profit/(losses) for the period |
5,087 |
(1,417) |
|
Closing balance |
8,744 |
1,070 |
Joint Ventures
The Group has the following investments in joint ventures:
|
|
Year |
Shares held |
% held |
||
|
Name of Entity |
|
2008 |
2006 |
2008 |
2006 |
|
Assura Blackpool LLP |
31 March |
n/a |
n/a |
50% |
- |
|
Assura Derwentside LLP |
31 March |
n/a |
n/a |
50% |
- |
|
Assura East Riding LLP |
31 March |
n/a |
n/a |
50% |
50% |
|
Assura Hampshire Health LLP |
31 March |
n/a |
n/a |
50% |
- |
|
Assura Leeds LLP |
31 March |
n/a |
n/a |
50% |
- |
|
Assura Liverpool LLP |
31 March |
n/a |
n/a |
50% |
50% |
|
Assura Macclesfield LLP |
31 March |
n/a |
n/a |
50% |
50% |
|
Assura Minerva LLP |
31 March |
n/a |
n/a |
50% |
50% |
|
Assura Vertis LLP |
31 March |
n/a |
n/a |
50% |
- |
|
Assura Wiltshire LLP |
31 March |
n/a |
n/a |
50% |
- |
|
Assura Wyre Forest LLP |
31 March |
n/a |
n/a |
50% |
- |
|
Peninsula Health LLP |
31 March |
n/a |
n/a |
50% |
- |
|
GP Care Pharmacy Limited |
31 March |
1 Ordinary Share of £1 |
- |
50% |
- |
|
|
Place of |
Business |
|
Name of Entity |
|
|
|
Assura Blackpool LLP |
England |
Enhanced medical services |
|
Assura Derwentside LLP |
England |
Enhanced medical services |
|
Assura East Riding LLP |
England |
Enhanced medical services |
|
Assura Hampshire Health LLP |
England |
Enhanced medical services |
|
Assura Leeds LLP |
England |
Enhanced Medical services |
|
Assura Liverpool LLP |
England |
Enhanced Medical services |
|
Assura Macclesfield LLP |
England |
Enhanced Medical services |
|
Assura Minerva LLP |
England |
Enhanced Medical services |
|
Assura Vertis LLP |
England |
Enhanced medical services |
|
Assura Wiltshire LLP |
England |
Enhanced medical services |
|
Assura Wyre Forest LLP |
England |
Enhanced medical services |
|
Peninsula Health LLP |
England |
Enhanced medical services |
|
GP Care Pharmacy Limited |
England |
Pharmacy |
In addition, the Group has an interest in Skeeles Pharmacy Limited and Douglas Skeeles Limited which are dormant, wholly-owned subsidiaries of GP Care Pharmacy Limited.
The above investments comprise:
|
|
|
|
31/03/08 |
31/12/06 |
|
|
|
|
Group |
Group |
|
|
|
|
£'000 |
£'000 |
|
Cost of shares or member's core capital |
|
|
1,868 |
906 |
|
Loans |
|
|
7,339 |
- |
|
Share of accumulated losses |
|
|
(588) |
(37) |
|
|
|
|
8,619 |
869 |
Members' capital is interest free.
The following information is given in respect of the Group's share of all joint ventures:
|
|
31/03/08 |
31/12/06 |
|
|
Group |
Group |
|
|
£'000 |
£'000 |
|
Non-current assets |
3,399 |
- |
|
Current assets |
1,286 |
453 |
|
|
|
|
|
|
4,685 |
453 |
|
Liabilities due within one year |
1,449 |
490 |
|
Non-current liabilities |
3,824 |
- |
|
|
5,273 |
490 |
|
|
|
|
|
Share of net liabilities |
(588) |
(37) |
|
Add back loans |
7,339 |
- |
|
Other |
1,868 |
906 |
|
Carrying amount of joint ventures |
8,619 |
869 |
|
|
|
|
|
Share of joint ventures revenue and profit: |
|
|
|
Revenue |
39 |
- |
|
|
|
|
|
Loss |
(838) |
(37) |
The movement on investments in joint ventures during the year was as follows:
|
|
31/03/08 |
31/12/06 |
|
|
Group |
Group |
|
|
£'000 |
£'000 |
|
Opening balance |
869 |
- |
|
Acquired in period |
962 |
906 |
|
Net loans advanced or transferred |
7,339 |
- |
|
Share of losses in period |
(551) |
(37) |
|
Closing balance |
8,619 |
869 |
24. Intangible assets
|
|
Goodwill |
Pharmacy |
Total |
|
|
|
licences |
|
|
|
31/03/08 |
31/03/08 |
31/03/08 |
|
|
£'000 |
£'000 |
£'000 |
|
Cost |
|
|
|
|
At 1 January 2007 |
36,714 |
284 |
36,998 |
|
Goodwill arising in the period as below |
2,230 |
- |
2,230 |
|
Pharmacy licence development and licences costs acquired during the period |
- |
6,573 |
6,573 |
|
At 31 March 2008 |
38,944 |
6,857 |
45,801 |
|
|
|
|
|
|
Impairment |
|
|
|
|
At 1 January 2007 |
- |
- |
|
|
Impairment during the period |
7,914 |
- |
7,914 |
|
At 31 March 2008 |
7,914 |
- |
7,914 |
|
|
|
|
|
|
Net book value at 31 March 2008 |
31,030 |
6,857 |
37,887 |
|
|
Goodwill |
Pharmacy |
Total |
|
|
|
licences |
|
|
|
31/12/06 |
31/12/06 |
31/12/06 |
|
|
£'000 |
£'000 |
£'000 |
|
Cost |
|
|
|
|
At 1 January 2006 |
5,892 |
36 |
5,928 |
|
Goodwill arising in the year as below |
30,822 |
- |
30,822 |
|
Pharmacy licence development and licences costs acquired during the year |
- |
248 |
248 |
|
At 31 December 2006 |
36,714 |
284 |
36,998 |
|
|
|
|
|
|
Net book value at 31 December 2006 |
36,714 |
284 |
36,998 |
Pharmacy licences represent an ongoing open ended relationship with local PCTs to provide drugs and services on behalf of the NHS. They are therefore considered to have an infinite useful life.
2008 business combinations
During the period, the Group acquired four pharmacy branches through the acquisition of the entire share capital of Clearup Limited (29 March 2007), P&L Worsley Limited (14 May 2007) and Armside Chemists Limited (2 July 2007). Although the completion accounts are yet to be finalised for the acquisition of Armside Chemists Limited, it is estimated that the total consideration for the three acquisitions will be £4,058,000. In addition, five pharmacy licenses were acquired in asset deals for a total consideration of £3,505,000.
On 17 October 2007 the Group acquired the entire share capital of two diagnostic and equipment rental businesses, Urosonics Limited and Cystoscope Hire Limited for a consideration of £1,451,000 satisfied by the issue of 750,000 Ordinary Shares in the Company at market value.
The net assets acquired, fair value of consideration paid and goodwill arising on these transactions are set out in the table below:
|
|
Pharmacy acquisitions |
Diagnostics acquisitions |
Total |
|
|
£'000 |
£'000 |
£'000 |
|
Non current assets |
210 |
52 |
262 |
|
Pharmacy licenses |
2,901 |
- |
2,901 |
|
Cash |
737 |
10 |
747 |
|
Other Current Assets |
235 |
16 |
251 |
|
Deferred tax |
(812) |
- |
(812) |
|
|
|
|
|
|
Net assets acquired at book value |
3,271 |
78 |
3,349 |
|
|
|
|
|
|
Fair value adjustment |
(10) |
- |
(10) |
|
Net assets acquired at fair value |
3,261 |
78 |
3,339 |
|
Fair value of shares in Assura Group Limited |
- |
1,451 |
1,451 |
|
Cash paid |
4,002 |
- |
4,002 |
|
Attributable costs |
71 |
45 |
116 |
|
Total consideration |
4,073 |
1,496 |
5,569 |
|
Goodwill arising on acquisition |
812 |
1,418 |
2,230 |
Included in the £2,230,000 of goodwill recognised above are certain assets that cannot be individually separated and reliably measured due to their nature. These items include the exported value of future earnings, synergies and staff in place.
During the current period the Group terminated its management contract for The Westbury Property Fund Limited (see note 12). As a result goodwill relating to the acquisition of Assura Administration and related parties in the prior year has been impaired in the period. This is shown in the eliminations and unallocated segment.
From the date of acquisition to 31 March 2008, the acquired businesses have contributed £11,000 of losses to the results of the Group. If the combination had taken place at the beginning of the year, the consolidated profit of the Group would have been £14,595,000 and revenue would have been £45,689,000.
2006 Business Combinations
On 6 February 2006 the Group acquired, for cash, the entire share capital of PCI Management Limited, an intermediate holding company and its subsidiary, Primary Care Initiatives (Macclesfield) Limited.
On 15 May 2006 the Group acquired the entire share capital of Assura Administration Limited (formerly Berrington Fund Management Limited) and related parties, Assura Investments Limited (formerly) Strategis Limited and Assura Services Limited (formerly Tarncourt Limited) and the Member's capital of Assura Fund Management LLP (formerly Berrington Fund Management LLP). The consideration for the acquisition was £11,484,000 paid in cash plus the issue of 16,826,359 ordinary shares to the vendors.
On 1 June 2006 the Group contracted to acquire the 30% of Assura LIFT Holdings Limited not then owned by the Group. The consideration for the acquisition was met by the issue of 1,322,476 ordinary shares to the vendors on completion. Included in the 30% stake being acquired were 11,093 shares of 0.1p each in Assura LIFT Holdings Limited which were held by R Pesskin, representing 7.8% of the share capital in that Company. The Group has consolidated 100% of the Company as the 11,093 shares were subject to a put and call option committing the Group to the acquisition of those shares. The put option was exercised in the period. The consideration for these shares in Assura LIFT Holdings Limited comprised the issue of a further 464,666 Ordinary shares in the Company, the cost of which had been provided for in a deferred consideration reserve.
On 5 October 2006 the Group acquired the entire share capital of Assura Intelligence Limited (formerly Stream Partners Limited) for £299,000 paid in cash. The acquisition of Assura Intelligence Limited is subject to conditional deferred consideration, payable in 2009, of shares in Assura Group. The number of shares to be issued to the vendors being the number of patients processed by Assura Intelligence Limited's data processing service in the calendar year 2008 divided by 1.7 and subject to a maximum of 441,176 shares being granted, the cost of which is being expensed on a time apportioned basis with the credit being added to retained earnings.
The net assets acquired, fair value of consideration paid and goodwill arising on these transactions are set out in the table below.
|
|
Assura Administration and related parties |
PCI Management Limited and subsidiary |
Assura LIFT Holdings Limited |
Stream Partners Limited |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investment Property |
- |
13,903 |
- |
- |
13,903 |
|
Property, plant and equipment |
1,533 |
- |
- |
- |
1,533 |
|
Cash |
1,440 |
1,945 |
18 |
30 |
3,433 |
|
Other Current Assets/(Liabilities) |
(235) |
(547) |
(139) |
19 |
(902) |
|
Bank loan - Long term |
- |
(11,896) |
- |
- |
(11,896) |
|
Bank loan - Current portion |
- |
(604) |
- |
- |
(604) |
|
Other long-term liabilities |
- |
- |
(490) |
- |
(490) |
|
Net Assets Acquired at book value |
2,738 |
2,801 |
(611) |
49 |
4,977 |
|
Fair value of performance fee entitlement |
11,490 |
- |
- |
- |
11,490 |
|
Net Assets Acquired at fair value |
14,228 |
2,801 |
(611) |
49 |
16,467 |
|
Fair Value of shares in Assura Group Limited |
28,605 |
- |
2,248 |
- |
30,853 |
|
Cash paid |
11,483 |
2,486 |
- |
300 |
14,269 |
|
Deferred consideration |
- |
- |
790 |
- |
790 |
|
Attributable costs |
953 |
315 |
69 |
40 |
1,377 |
|
Total consideration |
41,041 |
2,801 |
3,107 |
340 |
47,289 |
|
Goodwill arising on acquisition |
26,813 |
- |
3,718 |
291 |
30,822 |
Included in the £30,822,000 recognised above are certain intangible assets that cannot be individually separated and reliably measured and reliably measured due to their nature. These terms include customer contracts, synergies and staff in place.
From the date of acquisition to 31 December 2006, the acquired businesses contributed £216,000 to the profit of the Group. If the combination had taken place at the beginning of the prior year, the consolidated profit of the Group would have been £17,603,000.
Impairment of goodwill
The Company tests annually whether goodwill or pharmacy licenses have suffered any impairment.
Goodwill acquired through business combinations and licences have been allocated for impairment testing purposes to four cash generating units as follows:
|
|
Goodwill |
Pharmacy licences |
||
|
|
31/03/08 |
31/12/06 |
31/03/08 |
31/12/06 |
|
Property development cash generating unit |
24,791 |
32,705 |
- |
- |
|
LIFT cash generating unit |
3,718 |
3,718 |
- |
- |
|
Pharmacy cash generating unit |
812 |
- |
6,857 |
284 |
|
Medical cash generating unit |
1,709 |
291 |
- |
- |
|
|
31,030 |
36,714 |
6,857 |
284 |
These represent the lowest level within the Group at which goodwill is monitored for internal management purposes.
Property development cash generating unit
The recoverable amount of the property development unit has been determined based on a value in use calculation according to a budget approved by the Board covering a four year period. The discount rate applied to cash flow projections is 8.5% (2006: 8.5%) and cash flows beyond the four year forecasts are extrapolated using a 5% growth rate (2006: 5%) based on management's experience and conservative expectations.
LIFT cash generating unit;
The recoverable amount of the LIFT unit has been determined based on a value in use calculation according to financial models approved by LIFT company shareholders covering a 25 year period. The discount rate applied to cash flow projections is 8.5% (2006: 8.5%). The forecast cash flows include the project returns on funding loans provided by Assura LIFT Holdings Limited based on the actual interest rate of 14% (2006: 14%), the estimated residual value at the end of the primary lease period and the pipeline of projects.
Pharmacy cash generating unit;
The recoverable amount of the pharmacy unit has been determined based on a value in use calculation based on budgets approved by the Board covering a five year period. The discount rate applied to cash flow projections is 8.5% and cash flows beyond the five year forecasts are extrapolated using a 4% growth rate based on management's experience.
Medical cash generating unit;
The recoverable amount of the medical unit has been determined based on a value in use calculation based on budgets approved by the Board covering a five year period. The discount rate applied to cash flow projections is 8.5% and cash flows beyond the five year forecasts are extrapolated using a 15% growth rate reducing to 5%.
25. Property, Plant and Equipment
|
|
|
|
|
|
|
|
|
Computer, |
Fixtures, |
|
|
|
Land and buildings |
medical and other |
fittings and furniture |
Total |
|
|
31/03/08 |
31/03/08 |
31/03/08 |
31/03/08 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Cost |
|
|
|
|
|
At 1 January |
2,645 |
1,505 |
2,164 |
6,314 |
|
At acquisition |
210 |
52 |
- |
262 |
|
Transfer from investment property |
13,635 |
- |
- |
13,635 |
|
Additions at cost |
- |
1,279 |
1,392 |
2,671 |
|
Disposals at cost |
- |
(294) |
- |
(294) |
|
Revaluation |
2,519 |
- |
- |
2,519 |
|
At 31 March |
19,009 |
2,542 |
3,556 |
25,107 |
|
Depreciation |
|
|
|
|
|
At 1 January |
- |
174 |
167 |
341 |
|
Depreciation for the year |
- |
710 |
410 |
1,120 |
|
Disposals |
- |
(221) |
- |
(221) |
|
At 31 March |
- |
663 |
577 |
1,240 |
|
|
|
|
|
|
|
Net book value at 31 March 2008 |
19,009 |
1,879 |
2,979 |
23,867 |
|
|
|
Computer, |
Fixtures, |
|
|
|
Land and buildings |
medical and other equipment |
fittings and furniture |
Total |
|
|
31/12/06 |
31/12/06 |
31/12/06 |
31/12/06 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Cost |
|
|
|
|
|
At 1 January |
- |
11 |
63 |
74 |
|
At acquisition |
- |
95 |
2 |
97 |
|
Transfer from investment property |
2,539 |
- |
- |
2,539 |
|
Additions at cost |
- |
1,399 |
2,099 |
3,498 |
|
Revaluation |
106 |
- |
- |
106 |
|
At 31 December |
2,645 |
1,505 |
2,164 |
6,314 |
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
At 1 January |
- |
2 |
36 |
38 |
|
Depreciation for the year |
- |
172 |
131 |
303 |
|
At 31 December |
- |
174 |
167 |
341 |
|
|
|
|
|
|
|
Net book value at 31 December 2006 |
2,645 |
1,331 |
1,997 |
5,973 |
Land and buildings are stated at fair value which has been determined based on valuations performed by Savills Commercial Limited as at 31 March 2008, on the basis of open market value, supported by market evidence, in accordance with international valuation standards. The previous valuation was carried out by Savills Commercial Limited on the same basis as at 31 December 2006. If the land and buildings were measured using the cost model, the carrying amounts would be as follows:
|
|
31/03/08 |
31/12/06 |
|
|
£'000 |
£'000 |
|
Cost and net book value |
16,384 |
2,539 |
26. Other investment
|
|
31/03/08 |
31/12/06 |
|
Available for-sale financial assets |
9,047 |
250 |
|
Listed equity shares |
8,297 |
- |
|
Unlisted equity shares |
750 |
250 |
|
|
9,047 |
250 |
The Group owns 6,382,474 Ordinary Shares of 10p each in Stobart Group Limited which are listed on the London Stock Exchange, valued at closing price.
27. Cash and cash equivalents
|
|
|
31/03/08 |
31/12/06 |
|
|
|
£'000 |
£'000 |
|
Petty cash |
|
1 |
8 |
|
Cash held in current account |
|
20,093 |
18,468 |
|
Cash held to bank's order |
|
360 |
360 |
|
Rent held on deposit |
|
6 |
6 |
|
|
|
20,460 |
18,842 |
Cash is held to the bank's order as security for letters of credit issued by the bank to the debt funders for the three LIFTCos to which the Group has pledged funding upon practical completion of the medical centres under development.
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.
|
28. Debtors |
|
|
|
|
|
|
31/03/08 |
31/12/06 |
|
|
|
£'000 |
£'000 |
|
Trade debtors |
|
4,144 |
6,182 |
|
VAT recoverable |
|
2,240 |
1,105 |
|
Prepayments & accrued income |
|
3,600 |
1,526 |
|
Other debtors |
|
4,284 |
1,079 |
|
|
|
14,268 |
9,892 |
The Group has entered into commercial property leases on its investment property portfolio. These non cancellable leases have remaining terms of up to 25 years with an average lease length of 18 years. All leases are subject to revision of rents according to various rent review clauses. Future minimum rentals receivable under non cancellable operating leases as at 31 March are as follows:
|
|
31/03/08
|
31/12/06
|
|
|
£’000
|
£’000
|
|
Within one year
|
16,615
|
12,354
|
|
After one year but not more than five years
|
65,709
|
48,560
|
|
More than five years
|
228,981
|
176,382
|
|
|
311,305
|
237,296
|
Trade debtors are generally on 30-60 days' terms and are shown net of a provision for impairment. As at 31 March 2008, no trade debtors were impaired or fully provided for (2006: Nil).
As at 31 March 2008 and 31 December 2006, the analysis of trade debtors that were past due but not impaired is as follows:
|
|
|
|
Past due but not impaired |
|||
|
|
Total |
Neither past due nor impaired |
>30 days |
>60 days |
>90 days |
>120 days |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
2008 |
4,144 |
3,171 |
435 |
131 |
173 |
234 |
|
2006 |
6,182 |
4,005 |
940 |
308 |
116 |
813 |
The credit quality of trade debtors that are neither past due nor impaired is assessed by reference to internal historical information relating to counterparty default rates.
|
29. Bank overdraft |
|
31/03/08 |
31/12/06 |
|
|
|
£'000 |
£'000 |
|
Bank overdraft |
|
- |
2,135 |
|
|
|
|
|
Assura Pharmacy Limited had a £5m overdraft arrangement with National Australia Bank Limited as part of the £100m loan facility agreement on which interest was charged at base rate plus a margin of 1%. The overdraft was repaid in March 2008.
|
|
|
|
|
|
30. Creditors |
|
31/03/08 |
31/12/06 |
|
|
|
£'000 |
£'000 |
|
Trade creditors |
|
6,133 |
4,273 |
|
Other creditors and accruals |
|
5,761 |
4,747 |
|
Payments due under finance leases |
|
94 |
92 |
|
Loan (see note 31) |
|
561 |
604 |
|
Interest payable and similar charges |
|
96 |
124 |
|
Rents received in advance |
|
3,473 |
2,552 |
|
|
|
16,118 |
12,392 |
The total of future minimum lease payments payable under non-cancellable finance leases is shown below:
|
|
|
31/03/08
|
31/12/06
|
|
|
|
£’000
|
£’000
|
|
Within one year
|
|
94
|
92
|
|
After one year but not more than five years
|
|
394
|
384
|
|
More than five years
|
|
778
|
905
|
|
|
|
1,266
|
1,381
|
The above finance lease arrangements are in respect of investment property held by the Group on leasehold rather than freehold terms. The amounts due above that are more than one year, which total £1,172,000 (2006: £1,289,000) have been disclosed in non-current liabilities on the consolidated balance sheet.
|
31. Long-term Loan |
|
|
|
|
|
|
31/03/08 |
31/12/06 |
|
|
|
£'000 |
£'000 |
|
|
|
|
|
|
At 1 January |
|
44,949 |
24,930 |
|
Amount drawn down in year |
|
298,420 |
72,000 |
|
Acquired on acquisition of PCI Management Limited |
|
- |
11,896 |
|
Amount repaid in year |
|
(154,258) |
(64,000) |
|
Loan issue costs |
|
(1,355) |
(123) |
|
Amortisation of loan issue costs |
|
663 |
246 |
|
At 31 March (31 December 2006) |
|
188,419 |
44,949 |
The Group had a loan agreement with National Australia Bank Limited for £95,000,000 as part of a £100,000,000 loan facility and a £12,500,000 loan facility with The General Practice Finance Corporation (GPFC) Limited. The National Australia Bank Limited loan was repaid in March 2008.
The GPFC loan is due for repayment by quarterly instalments with the balance of £6,000,000 due on 28 May 2031. £113,000 is due within a year (see note 30).
These loans are secured by way of a debenture over the wholly owned property assets of the Group and a fixed charge over shares held in certain subsidiary companies.
During the period, the loan facility with National Australia Bank Limited was subject to the following financial covenants:
(i) Loan to value ratio - the aggregate outstanding loan to current valuation of investment properties should not exceed 75%.
(ii) Projected net rental income receivable during the following 12 month period must cover 130% of projected finance costs.
(iii) Financial indebtedness must be below 65% of gross asset value.
(iv) Average weighted lease length must exceed 12.5 years.
The Group has been in compliance with the financial covenants throughout the period since issue.
Interest was charged at a rate of 0.65% above the swap rate on the £95m loan facility with National Australia Bank Limited and is charged at a rate of 6.45% on the £12.5m loan facility with The General Practice Finance Corporation Limited.
Two new loan facilities were entered into in March 2008:
(i) Loan to value ratio - the aggregate outstanding loan to current valuation of investment properties should not exceed 75%.
(ii) Projected net rental income receivable during the following 12 month period must cover 130% of projected finance costs.
(iii) Financial indebtedness must be below 65% of gross asset value.
(iv) Average weighted lease length must exceed 12.5 years.
|
32. Share capital |
|
|
|
|
|
|
|
|
|
|
|
|
31/03/08 |
31/03/08 |
31/12/06 |
31/12/06 |
|
Authorised |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
Ordinary Shares of 10p each |
300,000,000 |
30,000 |
300,000,000 |
30,000 |
|
Preference Shares of 10p each |
20,000,000 |
2,000 |
20,000,000 |
2,000 |
|
|
|
32,000 |
|
32,000 |
|
|
|
|
|
|
|
|
Number of Shares |
Share Capital |
Number of Shares |
Share Capital |
|
|
31/03/08 |
31/03/08 |
31/12/06 |
31/12/06 |
|
Ordinary Shares issued and fully paid |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
Opening balance |
233,998,471 |
23,400 |
142,403,847 |
14,240 |
|
|
|
|
|
|
|
Issued on 14 September 2007 to settle the deferred consideration from 2006 on the acquisition of Assura LIFT Holdings Limited |
464,644 |
47 |
- |
- |
|
Issued on 12 October 2007 to acquire Urosonics Limited and Cystoscope Hire Limited |
750,000 |
75 |
- |
- |
|
Issued for cash on 15 May 2006 |
- |
- |
64,729,021 |
6,473 |
|
Issued on 15 May 2006 in exchange for shares in Assura Administration Limited (formerly Berrington Fund Management Limited) and related parties |
- |
- |
16,826,359 |
1,683 |
|
Issued on 15 May 2006 for services provided by Pharma-e Limited |
- |
- |
650,000 |
65 |
|
Issued on 1 June 2006 to acquire minority interest in Assura LIFT Holdings Limited (formerly BHE Holdings Limited) |
- |
- |
1,322,476 |
132 |
|
Issued to the Assura Executive Incentive Plan |
- |
- |
8,066,768 |
807 |
|
Total issued in period |
1,214,644 |
122 |
91,594,624 |
9,160 |
|
Closing balance |
235,213,115 |
23,522 |
233,998,471 |
23,400 |
|
Own shares held |
(10,331,474) |
(1,033) |
(8,066,768) |
(807) |
|
Total Share Capital |
224,881,641 |
22,489 |
225,931,703 |
22,593 |
Voting rights
Ordinary shareholders are entitled to vote at all general meetings.
During the period the Assura Group Employee Benefit Trust acquired 2,264,706 shares at a cost of £3,754,000.
On 15 May 2006 the Company formed the Assura Executive Equity Incentive Plan (EEIP) and issued and transferred 8,066,768 ordinary shares into the plan. Participants will be allocated units each of which represent one Ordinary Share, 68.5% of which was scheduled to vest on 31 December 2008 and the balance on 31 December 2010. These dates were varied in the period and are now 31 March 2009 and 31 March 2011 respectively. The units will vest at the end of the vesting periods if the compound growth in total shareholder return in each period is 12.5% above a base reference price of £1.90. A sliding scale will apply if the total shareholder return is between 0% and 12.5% over the base reference price. Upon vesting, an appropriate number of Ordinary Shares will be transferred by the trustees of the plan to participants less a deduction for the number of shares needed to recover any tax or national insurance liabilities which arise for participants.
During the period 2,513,500 (2006: 3,130,000) units were granted to participants which vest on 31 March 2009.
The fair value of equity settled share options is estimated as at the date of grant using a Monte-Carlo model, taking into account the terms and conditions upon which options were granted. The fair value of the units granted in the period, is £3,091,000 (2006: £6,554,000) based on market price at the date the shares were granted. This cost is allocated over the vesting period. Given that the Company's share price at the date of this report is substantially below the base preference price, the cumulative expense has been computed by preference to the second vesting date given the likelihood of the units being granted at the first vesting date. The cost allocation for the period was £1,578,000 (2006: £1,279,000), 2006 included 500,000 units issued to the Chairman (see notes 3 and 4). Dividends are paid to, and accumulate in, the Assura EEIP.
On 5 October 2006 the Group acquired the entire share capital of Assura Intelligence Limited for cash and conditional deferred consideration payable in 2009, in shares in Assura Group. The number of shares to be issued to the vendors is subject to a maximum of 441,176, the cost of which is being expensed on a time apportioned basis with the credit being added to retained earnings. The cost incurred in the period was £365,000 (2006: £91,000).
On 1 June 2006, the Group acquired 30% of Assura LIFT Holdings Limited. The consideration included the issue of a further 464,666 Ordinary Shares in Assura Group Limited, the cost of which was provided for in a deferred consideration reserve.
These shares were issued in the period and the deferred consideration reserve released. 650,000 Ordinary Shares were issued on 15 May 2006 to Pharma-e Limited to compensate for consultancy services provided to the Group described in note 11.
|
33. Share premium |
|
|
|
|
|
|
31/03/08 |
31/12/06 |
|
|
|
£'000 |
£'000 |
|
Opening balance |
|
226,678 |
122,239 |
|
Proceeds arising on issue of Ordinary Shares |
|
2,073 |
129,439 |
|
Transfer to distributable reserve |
|
(226,678) |
(25,000) |
|
Closing balance |
|
2,073 |
226,678 |
|
|
|
|
|
On 2 June 2006, following both shareholders' approval and that of the Royal Court in Guernsey, £25,000,000 of share premium was transferred to distributable reserve. On 29 June 2007 a further £226,678,000 was similarly transferred.
|
34. Distributable reserve
|
|
|
|
|
|
|
31/03/08
|
31/12/06
|
|
|
|
£’000
|
£’000
|
|
At 1 January
|
|
15,564
|
-
|
|
Transfer from share premium (see note 33)
|
|
226,678
|
25,000
|
|
Dividends on Ordinary Shares (see note 18)
|
|
(18,126)
|
(9,436)
|
|
|
|
224,116
|
15,564
|
|
|
|
|
|
|
|
|
|
|
|
35. Retained earnings
|
|
|
|
|
|
|
31/03/08
|
31/12/06
|
|
|
|
£’000
|
£’000
|
|
Opening balance
|
|
1,852
|
(18,328)
|
|
Profit for the period attributable to equity holders
|
|
14,070
|
18,901
|
|
Cost of employee share-based incentives
|
|
1,578
|
1,279
|
|
Minority interest disposed of in the period
|
|
(299)
|
-
|
|
Closing balance
|
|
17,201
|
1,852
|
|
|
|
|
|
|
36. Revaluation reserve
|
|
|
|
|
|
|
31/03/08
|
31/12/06
|
|
|
|
£’000
|
£’000
|
|
Opening balance
|
|
106
|
-
|
|
Revaluation of land & buildings in the year
|
|
2,983
|
106
|
|
Closing balance
|
|
3,089
|
106
|
|
|
|
|
|
37. Deferred consideration reserve
|
|
31/03/08
|
31/12/06
|
|
|
£’000
|
£’000
|
|
Opening balance
|
790
|
-
|
|
Deferred share-based consideration arising in year
|
-
|
790
|
|
Deferred share-based consideration paid in the period
|
(790)
|
-
|
|
Closing balance
|
-
|
790
|
At 1 June 2006, the Group acquired 30% of Assura LIFT Holdings Limited. The consideration included the issue of a further 464,666 Ordinary shares in Assura Group Limited at a future date no later than 31 December 2009, the cost of which was provided for in the deferred consideration reserve. The shares were issued in the period and the deferred consideration reserve was eliminated as a result.
38. Net asset value per Ordinary Share
The basic net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £265,383,000 (2006: £267,500,000) on 227,146,347 (2006: 225,932,000) Ordinary Shares in issue at the balance sheet date.
The adjusted basic net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £269,944,000 (2006: £268,307,000) which is after adding back the 'own shares held' reserve of £4,561,000 (2006: £807,000) and on 227,146,347 (2006: 225,932,000) Ordinary Shares in issue at the balance sheet date.
The diluted net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £265,383,000 (2006: £267,500,000) and on 228,628,438 (2006: 233,998,000) Ordinary Shares in issue at the balance sheet date.
The diluted net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £269,944,000 (2006: £268,307,000) which is after adding back the 'own shares held' reserve of £4,561,000 (2006: £807,000) and on 228,628,438 (2006: 233,998,000) Ordinary Shares in issue at the balance sheet date.
|
39. Note to the Consolidated Cash Flow Statement |
|
|
|
|
|
|
2008 |
2006 |
|
|
|
£'000 |
£'000 |
|
Reconciliation of net profit before taxation to net cash inflow from operating activities: |
|||
|
|
|
|
|
|
Net profit before taxation |
|
12,794 |
18,469 |
|
Taxation |
|
1,005 |
(40) |
|
Adjustment for non-cash items: |
|
|
|
|
Depreciation |
|
1,120 |
303 |
|
Increase in debtors |
|
(4,376) |
(6,354) |
|
Increase in creditors |
|
3,704 |
8,559 |
|
Increase in pharmacy inventories |
|
(776) |
(567) |
|
Surplus on revaluation of investment property |
|
(8,880) |
(17,041) |
|
Deficit on revaluation of property, plant and equipment |
|
464 |
- |
|
Deficit on revaluation of other investments |
|
989 |
- |
|
Termination of investment management services |
|
(1,134) |
- |
|
Interest capitalised on developments |
|
(3,415) |
- |
|
Profit on revaluation of financial instrument |
|
(3,660) |
(5,674) |
|
Movement in performance fee provision |
|
- |
(1,010) |
|
Share-based pharmacy establishment cost |
|
- |
1,105 |
|
Share of (profits)/losses of associates and joint ventures |
|
(4,536) |
1,454 |
|
Cost of employee share-based incentives |
|
1,704 |
1,279 |
|
Other gains and losses |
|
(2,088) |
(580) |
|
Amortisation of loan issue costs |
|
663 |
246 |
|
Net cash (outflow)/inflow from operating activities |
|
(6,422) |
149 |
|
|
|
|
|
40. Deferred tax
Deferred tax consists of the following:
|
Deferred income tax liabilities/(assets) recognised in the financial statements
|
||||
|
|
Consolidated balance sheet
|
Consolidated income statement
|
||
|
|
31/03/2008
|
31/12/2006
|
15 months ended 31/03/2008
|
12 months ended 31/12/2006
|
|
|
£’000
|
£’000
|
£’000
|
£’000
|
|
Decelerated allowances on premises, plant and equipment
|
43
|
-
|
43
|
-
|
|
Pharmacy licenses recognised on acquisition
|
(812)
|
-
|
-
|
-
|
|
Trading losses carried forward
|
962
|
-
|
962
|
-
|
|
|
193
|
-
|
1,005
|
-
|
|
Deferred income tax liabilities/(assets) not recognised in the financial statements
|
||
|
|
Consolidated balance statement
|
|
|
|
31/03/2008
|
31/12/2006
|
|
|
£’000
|
£’000
|
|
Tax losses
|
105
|
739
|
|
Decelerated allowances on premises
|
65
|
176
|
|
Deficit on revaluation of investment properties in the UK
|
3,640
|
-
|
|
|
3,810
|
915
|
41. Financial instruments
The Group holds cash and liquid resources as well as having debtors and creditors that arise directly from its operations. The Group has entered into an interest rate swap during the year as disclosed in note 13.
The main risks arising from the Group's financial instruments and properties are credit risk, liquidity risk, interest rate risk and equity price risk. The Board regularly reviews and agrees policies for managing each of these risks and these are summarised below.
Credit risk
Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Group. In the event of a default by an occupational tenant, the Group will suffer a rental income shortfall and incur additional costs, including legal expenses, in maintaining, insuring and re-letting the property.
Given the enhanced rights of landlords who can issue proceedings and enforcement by bailiffs, defaults are rare and potential defaults are managed carefully by the credit control department. The maximum credit exposure in aggregate is one quarter's rent of circa £5m, however this amount derives from all the tenants in the portfolio and such a scenario is hypothetical. The Group's credit risk is well spread across circa 147 tenants at any one time.
There are no significant concentrations of credit risk within the Group. The maximum credit risk exposure relating to financial assets is represented by carrying value as at the balance sheet date.
Liquidity risk
Liquidity risk is the risk that the Group will encounter in realising assets or otherwise raising funds to meet financial commitments. Investments in property are relatively illiquid, however, the Group has tried to mitigate this risk by investing in desirable properties which are well let to GPs and PCTs. In order to progress its property investment and development programme, the Group needs access to bank and equity finance, both of which may be difficult to raise notwithstanding the quality, long lease length, NHS backing and diversity of its property portfolio.
The Group finances its activities with a combination of bank loans, cash and short-term deposits. Overdrafts are used to satisfy short-term cash flow requirements. Other financial assets and liabilities, such as trade debtors and trade creditors, arise directly from the Group's operating activities. The Group also enters into derivative transactions, principally interest rate swaps with the purpose of managing the interest rate risks arising from the Group's operations and its sources of finance.
The table below summarises the maturity profile of the Group's financial liabilities at 31 March 2008 and 31 December 2006 based on contractual undiscounted payments.
|
|
On |
Less than |
3 to 12 |
1 to 5 |
|
|
|||||||
|
Year ended 31 March 2008 |
demand |
3 months |
months |
years |
>5 years |
Total |
|||||||
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|||||||
|
Interest bearing loans and borrowings |
- |
138 |
423 |
171,427 |
16,992 |
188,980 |
|||||||
|
Trade and other payables |
- |
15,846 |
71 |
394 |
778 |
16,729 |
|||||||
|
|
- |
15,624 |
494 |
171,821 |
17,770 |
205,709 |
|||||||
|
|
|
|
|
|
|
|
|||||||
|
|
On |
Less than |
3 to 12 |
1 to 5 |
|
|
|||||||
|
Year ended 31 December 2006 |
demand |
3 months |
months |
years |
>5 years |
Total |
|||||||
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|||||||
|
Interest bearing loans and borrowings |
2,135 |
25 |
579 |
33,551 |
11,398 |
47,688 |
|||||||
|
Trade and other payables |
- |
11,719 |
69 |
384 |
905 |
13,077 |
|||||||
|
|
2,135 |
11,744 |
648 |
33,935 |
12,303 |
60,765 |
|||||||
Interest rate risk
The Group's exposure to market risk for changes in interest rates relates primarily to the Group's cash deposits and, as debt is utilised, long term debt obligations. The Group's policy is to manage its interest cost using interest rate swaps (see note 13). The swap itself is revalued to its market value by reference to market interest rates at each balance sheet date.
The interest rate profile of the financial assets and liabilities of the Group at 31 March 2008 was as follows:
|
|
Within 1 year |
1-5 years |
More than 5 years |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Floating rate |
|
|
|
|
|
Cash |
20,460 |
- |
- |
20,460 |
|
|
Within 1 year |
1-5 years |
More than 5 years |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Fixed rate |
|
|
|
|
|
Interest rate swap |
- |
- |
5,862 |
5,862 |
|
Long-term loans: |
|
|
|
|
|
NAB |
- |
(168,917) |
- |
(168,917) |
|
GPFC |
(113) |
(531) |
(11,225) |
(11,869) |
|
RBS |
(448) |
(2,035) |
(5,711) |
(8,194) |
|
Payments due under finance leases |
(94) |
(394) |
(778) |
(1,266) |
The NAB long-term loan is a £250m National Australia Bank sponsored securitisation conduit available for five years from March 2008. The facility is backed up by a 364 day £255m liquidity facility for use when Commercial Paper cannot be issued by the conduit. The maturity of any draw downs under the liquidity facility is up to a maximum of three months.
The interest rate profile of the financial assets and liabilities of the Group at 31 December 2006 was as
follows:
|
|
Within 1 year |
1-5 years |
More than 5 years |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Floating rate |
|
|
|
|
|
Cash |
18,842 |
- |
- |
18,842 |
|
|
Within 1 year |
1-5 years |
More than 5 years |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Fixed rate |
|
|
|
|
|
Interest rate swap |
- |
- |
2,202 |
2,202 |
|
Bank overdraft |
(2,135) |
- |
- |
(2,135) |
|
Long term loans: |
|
|
|
|
|
NAB |
- |
(33,053) |
- |
(32,053) |
|
GPFC |
(604) |
(490) |
(11,406) |
(12,500) |
|
Payments due under finance leases |
(92) |
(384) |
(905) |
(1,381) |
The NAB long-term loan was part of a £100m National Australia Bank loan facility which was due for repayment in July 2008. The loan was repaid in March 2008.
The interest rate swap contract is adjusted to fair value at each balance sheet date. For the other financial assets and liabilities, their book value equates to their fair value, hence the above figures, for both 2008 and 2006 comprise both book and fair values.
|
|
Book value |
Fair value |
||
|
|
2008 |
2006 |
2008 |
2006 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash |
20,460 |
18,842 |
20,460 |
18,842 |
|
Interest rate swap |
5,862 |
2,202 |
5,862 |
2,202 |
|
Bank overdraft |
- |
(2,135) |
- |
(2,135) |
|
Long term loan |
(188,980) |
(44,553) |
(188,980) |
(44,553) |
|
Payments due under finance leases |
(1,266) |
(1,381) |
(1,266) |
(1,381) |
On 2 November 2006 the company increased its interest rate swap from £100m at 31 December 2006 to £150m at 30 June 2007 and £200m at 31 December 2007, all fixed until 31 December 2027 at a rate of 4.59%. The interest rate swap was revalued to its fair value of £5,861,000 at 31 March 2008 compared with a value of £2,202,000 at 31 December 2006 leading to a valuation gain in the year of £3,660,000 (2006 - £5,675,000) see note 13.
The interest rate swap is intended to protect the Group against fluctuations in interest rates given that the group's bank loan is at floating rate. The interest rate swap is measured against the three month LIBOR. Interest charged on the Group's £250m facility entered into in March 2008 (see note 31) is that applicable to asset backed Commercial Paper. The Group is therefore exposed to any differential between that rate and the three month LIBOR.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group's profit before tax.
|
|
Increase/ decrease in basis points |
Effect on profit before tax |
|
2008 |
+75 |
(763) |
|
|
-75 |
763 |
|
|
|
|
|
2006 |
+50 |
(84) |
|
|
-50 |
84 |
Equity price risk
The Group holds listed equity investments classified as available-for-sale. The Group's listed equity investments consist of 6,382,474 Ordinary Shares of 10p each in Stobart Group Limited (see note 26). The fair value, being market value, of the investment is therefore subject to variations in the equity share price.
The analysis below reflects the effect on the Group's investment given an increase or decrease of 5% in the equity share price.
|
|
Increase/ decrease in equity share price |
Effect on book value |
|
|
% |
£'000 |
|
2008 |
+5% |
415 |
|
|
-5% |
(415) |
|
2006 |
- |
- |
|
|
- |
- |
Capital risk
The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.
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 adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the period end 31 March 2008 and year end 31 December 2006.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group's policy is to keep the gearing at a reliable level for a strongly asset-backed operating business. In order to achieve this it must have access to share capital when appropriate otherwise it may need to sell property and other assets. The Group includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations. Capital includes convertible preference shares, equity attributable to the equity holders of the parent less the net unrealised gains reserve.
42. Commitments
At the year end the Group had a property investment and development pipeline amounting to a further £202,000,000 (2006: £150,224,000). The bulk of this expenditure is however discretionary and the amount of contracted expenditure was £42,000,000 (2006: £28,000,000).
The Company has given guarantees in favour of the GPFC amounting to £360,000 (2006: £360,000) to secure future LIFT investments by the Group.
43. Related parties
During the period certain costs, amounting to £211,000 (2006: £200,000) in total, relating to Assura Pharmacy Limited were incurred and recharged by Pharma-e Limited, a company in which John Curran, a former director of Assura Pharmacy Limited (resigned 23 March 2007), is a Director and shareholder and Andrew Murray is an employee. Transactions between Assura Pharmacy Limited and Pharma-e Limited are made at normal market prices. Invoices are payable upon presentation. A balance of £11,701 was outstanding at the year end which related to services for April 2008.
During the period Assura Pharmacy Limited transferred one of its branches to GP Care Pharmacy Limited, a joint venture vehicle in which it holds a 50% interest for £550,000. Assura Pharmacy Limited made loans to GP Care Pharmacy Limited. The loans, which totalled £7,028,200 as at 31 March 2008, are secured on the assets of GP Care Pharmacy Limited. Interest chargeable on the loans in the period was £11,000.
44. Events after the balance sheet date
At an Extraordinary General Meeting held on 3 April, Shareholders approved the change in status of the Company from Chapter 15 (investment) to Chapter 6 (trading) and the Group's management and control was moved to the UK immediately thereafter to reflect the change in nature of business of the Group.
This information is provided by RNS
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