Assura Share News (AGR)

(Sharecast News) - Healthcare property investor Assura reported significant progress in its third-quarter on Thursday, completing 17 property disposals during the quarter to generate net proceeds of £48.4m, in line with book value.

The FTSE 250 real estate investment trust said additional disposals worth £110m were under active discussion, with a further £90m identified as potential disposal opportunities.

It said the transactions aligned with Assura's strategy of streamlining its portfolio while focusing on growth opportunities in the UK private hospitals market.

Rent reviews also contributed positively to financial performance, with 59 reviews settled during the quarter.

They covered £8.5m of existing rent, resulting in a £0.6m uplift, equivalent to a 7.2% increase on prior passing rent.

The company also completed one capital project with a £1.2m spend and five lease regears covering £1.2m of existing rent.

Two further capital projects, with a combined budget of £4m, were currently underway.

Assura said its development pipeline remains robust, with five ongoing projects valued at £44m, of which £22m was yet to be spent.

They included two net zero carbon buildings - a GP medical centre and an NHS children's therapy centre - expected to become rent-producing in the next quarter.

In Ireland, three additional schemes were said to be progressing well.

Over the next two years, Assura said it planned to undertake 12 asset enhancement projects with a projected spend of £8.3m and regear 29 leases covering £2.8m of rent roll.

The company said its financial position remained strong, with net debt reduced by £46m during the quarter, driven by proceeds from disposals.

Its portfolio now comprised 608 properties with an annualised rent roll of £176.9m.

Assura reported a weighted average interest rate of 2.93%, with all drawn debt on a fixed-rate basis.

The company noted that its A- credit rating was reaffirmed by Fitch in August.

Assura maintained its quarterly dividend at 0.84p per share, equating to 3.36p annually, representing a dividend yield of 9.3% based on the latest share price.

"We have maintained momentum in the third quarter continuing to deliver against our strategic objectives," said chief executive officer Jonathan Murphy.

"The recently acquired 14 private hospitals are now fully embedded into our portfolio and are performing as we anticipated.

"Our asset disposal programme, announced at the time of our private hospital acquisition, raised £48m during the period and active discussions are underway on a further £110m."

Murphy said the company was on track to hit its target net debt-to-EBITDA below 9x and loan-to-value below 45% over the next 12-to-18 months.

"There is ongoing national recognition that improved health outcomes can be delivered by investment in community healthcare and through utilising capacity within the private sector.

"We have seen this recognition backed up by policy actions - £900m of funding for GPs announced in December; an additional £100m of committed investment to upgrade the GP estate; and this month a new partnership agreement between NHS England and the independent sector to work together for the benefit of patients.

"Assura is uniquely positioned to support this shift through the delivery of high-quality, modern and sustainable facilities."

At 0939 GMT, shares in Assura were down 0.44% at 35.94p.

Reporting by Josh White for Sharecast.com.