Assura Regulatory News (AGR)

Assura plc

Delivering our plan by growing our portfolio, refreshing the pipeline, strengthening the balance sheet and raising the dividend

22 November 2018

Assura plc ("Assura"), the leading primary care property investor and developer, is pleased to announce its results for the six months to 30 September 2018:

Continued growth of the portfolio

· 6% increase in investment property to £1.8 billion (March 2018: £1.7 billion)

· 39 properties added to the portfolio in the six months at a combined cost of £108 million (rent £5.5 million and WAULT of 13.3 years), and a further £50 million on three properties immediately after the period end

· 0.6% growth in diluted EPRA NAV per share to 52.7 pence (March 2018: 52.4 pence)

· 7% increase in rent roll to £97.0 million (March 2018: £91.0 million)

Delivering for investors

· 36% increase in EPRA earnings to £31.7 million (September 2017: £23.3 million)

· EPRA EPS of 1.3 pence (September 2017: 1.3 pence)

· IFRS profit before tax of £37.4 million (September 2017: £73.4 million) reduction reflecting lower revaluation gains

· Dividends paid in the period 1.3 pence (September 2017: 1.2 pence)

· 5% increase in dividend from January to 0.685p per quarter

Strengthened balance sheet enabling long-term low interest rates to be secured

· Assigned rating of A- (stable outlook) by Fitch Ratings Limited and completed issuance of £300 million unsecured listed bond with tenor of 10 years and interest rate of 3% per annum

· Weighted average cost of debt 3.28% and weighted average debt maturity 8.0 years (March 2018: 3.12% and 6.0 years respectively)

Well positioned, sector leader in a market that is in significant need of investment

· Current LTV of 30% (March 2018: 26%) giving significant headroom for future investment

· Strong pipeline (defined as opportunities currently in legal hands) with £189 million of acquisitions and developments

· Scalable internally managed operating model, with in-house development team

· Consensus that primary care must play a bigger role in health provision

· Significant underinvestment in the nation's primary care premises, many GP premises not currently fit for purpose

· Group operates in a highly fragmented market: portfolio of 556 medical centres compares with a total UK market of approximately 9,000 surgery buildings

Jonathan Murphy, CEO, said:

"We have continued to deliver on our investment plan in the first half of the year, which has seen us grow our portfolio, refresh our pipeline of acquisition and development opportunities, strengthen our balance sheet and achieve an investment grade rating of A-. The performance of the business and our confidence in the outlook is reflected in our decision to raise the dividend by 5 per cent."

Summary Results

For further information, please contact:

This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014 and has been announced in accordance with the Company's obligations under Article 17 of that Regulation.

Presentation and webcast:

A presentation will be held for analysts and investors on 22 November 2018 at 9.30am London time, with a webcast available from our website or via the following link:

http://webcasting.brrmedia.co.uk/broadcast/5bc46a50269b0c1ded189b1a

Notes to Editors

Assura plc, a constituent of the FTSE 250 and the EPRA* indices, is a UK REIT and long-term investor in and developer of primary care property. The company, headquartered in Warrington, works with GPs, health professionals and the NHS to create innovative property solutions in order to facilitate delivery of high-quality patient care in the community. At 30 September 2018, Assura's property portfolio was valued at £1,843 million.

Further information is available at www.assuraplc.com

*EPRA is a registered trademark of the European Public Real Estate Association.

CEO's statement

The first half of this year has been another six months of significant progress as we continue to consolidate our leadership position in UK primary care property. We have grown our portfolio by £110 million, largely reflecting the acquisition of 37 properties for £96 million plus £13 million of completed developments. Overall, our investment property increased 6% to 556 medical centres valued at £1.8 billion and we remain the largest listed owner of primary care properties.

As we announced on 5 October 2018, subsequent to the period end we completed a further three acquisitions at a cost of £50 million, including Stratford Healthcare Centre - a high quality property of scale that provides a wide range of services to the local community.

We have delivered on our plan to achieve an investment grade rating, having been assigned a rating of A- (stable outlook) by Fitch Ratings Limited, a result that underlines the strength of our business model and balance sheet. In July, we leveraged this rating to launch a £300 million unsecured listed bond with a coupon of 3% and a tenor of 10 years, locking into fixed rates and increasing our weighted average maturity of debt to 8 years. Our period end weighted average cost of debt is 3.28%.

Our current LTV is 30%, which we expect to increase as we fund further growth of the portfolio. We are comfortable with our LTV increasing to a level around 40% and so considerable headroom is in place to fund further growth.

As at the half year, we have a strong pipeline of acquisitions (£107 million) and developments (£82 million) currently in legal hands, and we are in discussions with many other schemes beyond this as we continue to see opportunities to refresh the pipeline. In particular, the level of development opportunities is promising and is starting to show the benefits from the investment we have made in strengthening our development team.

Financial highlightsDemonstrating our success in promptly investing the proceeds of the 2017 equity raise to further grow our portfolio, net rental income increased 21% to £46.2 million, while EPRA earnings increased 36% to £31.7 million, or 1.3 pence per share, also reflecting our decision to refinance the legacy secured Aviva debt. IFRS profit before tax was £37.4 million and diluted EPRA net asset value grew to 52.7 pence per share at the period end.

This strong financial performance has enabled us to announce an intended increase of 5% in our dividend from January 2019 to 0.685 pence per share on a quarterly basis.

Market opportunity

Under a new Secretary of State for Health, the NHS is planning the allocation of its additional funding with a renewed focus on illness prevention. This focus leans to investment in primary care, partnership working with community healthcare services and social prescribing. Further detail for NHS capital investment will come with next year's spending review, but with private finance initiatives ("PFI") ruled out by the Chancellor, good value public private partnership options for investment in community healthcare buildings, such as third party development, can play an important role.

Assura maintains an open dialogue with the key stakeholders within the NHS and Government. We continue to demonstrate our excellent track record and ability to deliver state of the art primary care premises within the heart of the community. We remain at the forefront to deliver value for money for the NHS and for the taxpayer as a third party developer ("3PD"). The ability to deliver these developments presents limited development risk for Assura with pre-let arrangements and the opportunity for future rental growth.

We have continued to both source and complete acquisition opportunities during the period utilising our proprietary database. Our extended development pipeline is the strongest it has been for the past five years. Assura's market share remains modest and there are many opportunities for further growth in a highly fragmented and specialist market.

Board changesSimon Laffin retired as Non-Executive Chairman and a Director of the Company at the conclusion of the AGM on 10 July. Simon was appointed Chairman in 2011 and served over a period which has seen Assura grow strongly, join the FTSE 250 Index and establish itself as a leader in its sector. I have thoroughly enjoyed working with Simon during his time with Assura and I would like to thank him personally and on behalf of the Board for his valued contribution to our success as well as wish him well for the future.

Ed Smith was appointed as Non-Executive Chairman of the Board at the conclusion of the AGM, having joined the Board in October last year. We continued to strengthen the Board with the appointment of Jonathan Davies as a Non-Executive Director in June. Both have brought a wealth of business and financial experience as well as fresh perspectives to the Board and I look forward to working with them as we continue to develop our business and strategy to add value for our shareholders.

Outlook

The strength of our balance sheet has been recognised in achieving an investment grade rating of A- and raising £300 million in the listed bond market on an unsecured basis. We retain headroom for further investment with an LTV of 30% and available facilities of £398 million.

We have a strong pipeline of £107 million of targeted acquisitions and £82 million of development opportunities currently in legal hands.

The open market rent review mechanism in our sector provides income growth whilst recent land and construction cost inflation provides the potential for future rental growth.

We believe that Assura will continue to provide stable long-term returns and our confidence is reflected in the proposed increase in quarterly dividend from January 2019.

Jonathan Murphy

CEO

21 November 2018

Business review

For the six months ended 30 September 2018

Portfolio as at 30 September 2018: £1,842.7 million (31 March 2018: £1,732.7 million)

Our business is based on our investment portfolio of 556 properties. This has a passing rent roll of £97.0 million (March 2018: £91.0 million), 84% of which is underpinned by the NHS. The WAULT is 12.2 years and 68% of the rent roll will still be contracted in 2028.

At 30 September 2018, our portfolio of completed investment properties was valued at £1,825.9 million, including investment properties held for sale of £7.3 million (March 2018: £1,709.6 million and £7.4 million), which produced a net initial yield ("NIY") of 4.79% (March 2018: 4.80%). Taking account of potential lettings of unoccupied space and any uplift to current market rents on review, our valuers assess the net equivalent yield to be 4.95% (March 2018: 4.98%). Adjusting this Royal Institution of Chartered Surveyors standard measure to reflect the advanced payment of rents, the true equivalent yield is 5.11% (March 2018: 5.15%).

Our EPRA NIY, based on our passing rent roll and latest annual direct property costs, was 4.77% (March 2018: 4.77%).

Expressed as a percentage of opening investment property plus additions, Total Property Return for the six months was 2.8% compared with 5.9% in 2017.

The net valuation gain in the six months of £5.7 million represents a 0.7% uplift on a like-for-like basis net of movements relating to properties acquired in the period. The NIY on our assets continues to represent a substantial premium over the 15-year UK gilt which traded at 1.718% at 30 September 2018.

Investment and development activity

We have invested substantially during the period, with this expenditure split between investments in completed properties, developments, forward funding projects, extensions and fit-out costs enabling vacant space to be let as follows:

In the first six months of the year we added 39 completed medical centres to our portfolio, including two developments. These were at a combined total cost of £108.2 million with a combined passing rent of £5.5 million (yield on cost of 5.1%) and a WAULT of 13.3 years.

We continue to source properties that meet our investment criteria for future acquisition. As at the half year, the acquisition pipeline stands at £107 million, being opportunities that are currently in solicitors' hands and which we would hope to complete within three to six months, subject to satisfactory due diligence.

As announced on 5 October 2018, we completed the acquisition of three properties from the pipeline for a combined consideration of £50 million in the first few days of the second half. This took the cumulative year to date spend to £158 million with a passing rent roll of £7.7 million and WAULT of 14.2 years. These additional three properties are not included in the reported half year numbers.

Live developments and forward funding arrangements

Of the five developments that were on site at March 2018, Brixworth and Durham have completed in the first half of the year and the remaining three are currently expected to complete in the second half of the year. In addition, we are now on site at South Woodham Ferrers, a 1,490 square metre scheme with a development cost of £6.3 million.

Each of the four developments on site at 30 September 2018 are under forward funding agreements, with a combined development cost of £18.5 million of which we had spent £10.2 million as at the half year.

In addition to the four developments currently on site, we have a pipeline of 14 properties (estimated cost £64 million) which we would hope to be on site within 12 months. This takes the total development pipeline to £82 million, which includes an increasing proportion that are directly sourced and developed by our in-house team (as opposed to being forward funded).

During this first six months of the year, we recorded a revaluation gain of £0.5 million in respect of investment property under construction (September 2017: £4.2 million).

Portfolio management

We have continued to deliver rental growth and have successfully concluded 107 rent reviews during the six months to generate a weighted average annual rent increase of 1.79% (year to March 2018: 1.70%) on those properties. Our portfolio benefits from a 27% weighting in fixed, Retail Price Index ("RPI") and other uplifts which generated an average uplift of 2.72% during the period. The majority of our portfolio is subject to open market reviews and these have generated an average uplift of 0.97% during the period.

We have signed eight new tenancies (rent £0.1 million) in the first half and have a further 12 (rent £0.1 million) that we hope to complete shortly. We have also completed one lease regear (rent £0.2 million) with a further 11 (rent £1.1 million) currently in legal hands.

Our EPRA Vacancy Rate was 1.9% (March 2018: 1.8%).

Administrative expenses

The Group analyses cost performance by reference to our EPRA Cost Ratios (including and excluding direct vacancy costs) which were 11.9% and 10.7% respectively (2017: 11.7% and 11.5%).

We also measure our operating efficiency as the proportion of administrative costs to the average gross investment property value. This ratio during the period was 0.23% (2017: 0.25%) and administrative costs stood at £4.2 million (2017: £3.6 million).

Financing

As we continue to grow through both acquisitions and developments, we have obtained additional lending during the period on an unsecured basis, in line with our financing strategy.

In July 2018, we were assigned an investment grade corporate rating of A- (stable outlook) by Fitch Ratings Limited. As noted in the press release issued by Fitch, the key sensitivities that may lead to a negative impact on the rating include LTV increasing to above 40% on a sustained basis, the net debt to EBITDA ratio being above nine times on a sustained basis, increasing usage of secured debt and the EBITDA net interest cover dropping below two times. As a result, we have included these measures within our financing statistics included in the table below.

Immediately following the rating being issued, on 12 July 2018, we priced a £300 million unsecured bond with a tenor of 10 years at an interest rate of 3% per annum.

As announced in our trading update at the start of July, we had temporarily increased the revolving credit facility ("RCF") to £400 million to support our acquisition pipeline prior to the bond being launched. The facility has now returned to £300 million and is undrawn as at the end of September.

Our LTV ratio currently stands at 30% and will increase in the short term as we draw down on debt facilities to invest in additional properties. Our policy allows us to reach the range of 40% to 50% should the need arise. All of the drawn debt facilities at 30 September 2018 are at fixed interest rates, although this will change as we draw on the RCF which is at a variable rate. The weighted average debt maturity is 8.0 years.

As at 30 September 2018, we had undrawn facilities and cash totalling £398 million. Details of the outstanding facilities and their covenants are set out in Note 11.

Net finance costs presented through EPRA earnings in the year amounted to £10.2 million (2017: £11.2 million).

Alternative Performance Measures ("APMs")

The financial performance for the period is reported including a number of APMs (financial measures not defined under IFRS). We believe that including these alongside IFRS measures provides additional information to help understand the financial performance for the period, in particular in respect of EPRA performance measures which are designed to aid compatibility across real estate companies. Calculations with reconciliation back to reported IFRS measures are included where possible.

IFRS profit before tax

IFRS profit before tax for the period was £37.4 million (2017: £73.4 million). The decrease can primarily be attributed to the decreased valuation gain on investment property, offset to some extent by the higher net rental income following additions to the portfolio.

EPRA earnings

The movement in EPRA earnings can be summarised as follows:

EPRA earnings has grown 36% to £31.7 million in the six months to 30 September 2018 reflecting the property acquisitions completed and the reduced finance costs from reducing our LTV and the average cost of borrowings.

Earnings per share

The basic earnings per share ("EPS") on profit for the period was 1.6 pence (2017: 4.2 pence).

EPRA EPS, which excludes the net impact of valuation movements and gains on disposal, was 1.3 pence (2017: 1.3 pence).

Based on calculations completed in accordance with IAS 33, share-based payment schemes are currently expected to be dilutive to EPS, with 0.4 million new shares expected to be issued. The dilution has no impact on the presented figures, as illustrated in the table below:

Dividends

Total dividends settled in the six months to 30 September 2018 were £31.2 million or 1.3 pence per share (2017: 1.2 pence per share). £5.1 million of this was satisfied through the issuance of shares via scrip.

As a Real Estate Investment Trust ("REIT") with requirement to distribute 90% of taxable profits (Property Income Distribution, "PID"), the Group expects to pay out as dividends at least 90% of recurring cash profits. Both dividends paid in the first half of the year were normal dividends (non-PID), as a result of brought forward tax losses and available capital allowances.

The October 2018 dividend has subsequently been paid as a PID and future dividends will be a mix of PID and normal dividends as required.

The table below illustrates our cash flows over the period:

Net cash flow from operations differs from EPRA earnings due to movements in working capital balances. The Group has restricted cash of £1.8 million (March 2018: £2.0 million) representing tenant deposits.

Diluted EPRA NAV movement

Our Total Accounting Return per share for the six months ended 30 September 2018 is 3.1% of which 1.3 pence per share (2.5%) has been distributed to shareholders and 0.3 pence per share (0.6%) is the movement on EPRA NAV.

Portfolio analysis by capital value

Portfolio analysis by region

Portfolio analysis by tenant covenant

EPRA performance measures

The European Public Real Estate Association ("EPRA") has published Best Practices Recommendations with the aim of improving the transparency, comparability and relevance of financial reporting with the real estate sector across Europe. This section details the rationale for each performance measure as well as our performance against each measure.

Summary table

EPRA EPS

Six months ended 30 September 2018: 1.3p

Six months ended 30 September 2017: 1.3p

Diluted EPRA EPS (p)

Six months ended 30 September 2018: 1.3p

Six months ended 30 September 2017: 1.3p

Definition

Earnings from operational activities.

Purpose

A key measure of a company's underlying operating results and an indication of the extent to which current dividend payments are supported by earnings.

The calculation of EPRA EPS and diluted EPRA EPS are shown in Note 7 to the accounts.

EPRA NAV

Six months ended 30 September 2018: 52.7p

31 March 2018: 52.4p

Definition

NAV adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term investment property business. Presented on a diluted basis.

Purpose

Adjusts IFRS NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities with a true real estate investment company with a long-term investment strategy.

The calculation of EPRA NAV is shown in Note 8 to the accounts.

EPRA NNNAVSix months ended 30 September 2018: 52.7p

31 March 2018: 51.8p

Definition

EPRA NAV adjusted to include the fair values of (i) financial instruments, (ii) debt and (iii) deferred taxes.

Purpose

Adjusts EPRA NAV to provide stakeholders with the most relevant information on the current fair value of all the assets and liabilities within a real estate company.

The calculation of EPRA NNNAV is shown in Note 8 to the accounts.

EPRA NIY 30 September 2018: 4.77%

31 March 2018: 4.77%

EPRA "topped-up" NIY 30 September 2018: 4.81%

31 March 2018: 4.81%

Definition - EPRA NIY

Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers' costs.

Definition - EPRA "topped-up" NIY

This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents).

Purpose

A comparable measure for portfolio valuations, this measure should make it easier for investors to judge for themselves how the valuation compares with that of portfolios in other listed companies.

EPRA Vacancy RateSix months ended 30 September 2018: 1.9%

31 March 2018: 1.8%

Definition

Estimated rental value ("ERV") of vacant space divided by ERV of the whole portfolio.

Purpose

A "pure" (%) measure of investment property space that is vacant, based on ERV.

EPRA Cost Ratios (including direct vacancy costs)Six months ended 30 September 2018: 11.9%

Six months ended 30 September 2017: 11.7%

EPRA Cost Ratios (excluding direct vacancy costs)Six months ended 30 September 2018: 10.7%

Six months ended 30 September 2017: 11.5%

Definition

Administrative and operating costs (including and excluding direct vacancy costs) divided by gross rental income.

Purpose

A key measure to enable meaningful measurement of the changes in a company's operating costs.

Interim condensed consolidated income statement

For the six months ended 30 September 2018

There were no items of other comprehensive income or expense and therefore the profit for the period also represents the Group's total comprehensive income. All income derives from continuing operations.

Interim condensed consolidated balance sheet

As at 30 September 2018

The interim condensed consolidated financial statements were approved at a meeting of the Board of Directors held on

21 November 2018 and signed on its behalf by:

Jonathan Murphy Jayne Cottam

CEO CFO

Interim condensed consolidated statement of changes in equity

For the six months ended 30 September 2018

Interim condensed consolidated statement of cash flow

For the six months ended 30 September 2018

Notes to the interim condensed consolidated financial statements

For the six months ended 30 September 2018

1. Corporate information

The Interim Condensed Consolidated Financial Statements of the Group for the six months ended 30 September 2018 were authorised for issue in accordance with a resolution of the Directors on 21 November 2018.

Assura plc ("Assura") is incorporated in England and Wales and the Company's Ordinary Shares are listed on the London Stock Exchange.

As of 1 April 2013, the Group has elected to be treated as a UK REIT. See Note 6 for further details.

Copies of this statement are available from the website at www.assuraplc.com.

2. Basis of preparation

The Interim Condensed Consolidated Financial Statements for the six months ended 30 September 2018 have been prepared in accordance with IAS 34 Interim Financial Reporting. These accounts cover the six-month accounting period from 1 April 2018 to 30 September 2018 with comparatives for the six-month accounting period from 1 April 2017 to 30 September 2017, or 31 March 2018 for balance sheet amounts.

The Interim Condensed Consolidated Financial Statements do not include all the information and disclosures required in the Annual Report and should be read in conjunction with those in the Group's Annual Report as at 31 March 2018 which are prepared in accordance with IFRSs as adopted by the European Union.

The accounts are presented in pounds sterling rounded to the nearest 0.1 million unless specified otherwise.

The accounts are prepared on a going concern basis.

3. Accounts

The results for the six months to 30 September 2018 and to 30 September 2017 are unaudited. The interim accounts do not constitute statutory accounts. The financial information for the year ended 31 March 2018 does not constitute the Company's statutory accounts for that year but is derived from those accounts. Statutory accounts have been delivered to the Registrar of Companies. The auditor reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006.

4. New standards, interpretations and amendments thereof, adopted by the Group

The accounting policies adopted in the preparation of the Interim Condensed Consolidated Financial Statements are consistent with those followed in the preparation of the Group's Annual Report for the year ended 31 March 2018, except for the adoption of IFRS 9 and IFRS 15, neither of which have resulted in a material impact to the accounts.

IFRS 16 is applicable for the Company from 1 April 2019. The standard will result in a right of use asset and finance lease liability being recognised in respect of head lease obligations, although the numbers are not expected to be material.

The Group is not expecting any other new and proposed changes in accounting standards endorsed by the EU to have a material impact on reported numbers in future periods.

5. Finance costs

6. Taxation on profit on ordinary activities

The Group elected to be treated as a UK REIT with effect from 1 April 2013. The UK REIT rules exempt the profits of the Group's property rental business from corporation tax. Gains on properties are also exempt from tax, provided the properties are not held for trading or sold in the three years post completion of development. The Group will otherwise be subject to corporation tax at 19%.

Group tax charges relate to its non-property income. As the Group has sufficient brought forward losses, no tax is due in relation to the current or prior period.

As a REIT, the Group is required to pay Property Income Distributions ("PIDs") equal to at least 90% of the Group's rental profit calculated by reference to tax rules rather than accounting standards. To remain as a UK REIT there are a number of conditions to be met in respect of the principal company of the Group, the Group's qualifying activities and the balance of business. The Group remains compliant at 30 September 2018.

7. Earnings per Ordinary Share

The current estimated number of shares over which nil-cost options may be issued to participants is 0.4 million.

8. Net asset value per Ordinary Share

The EPRA measures set out above are in accordance with the Best Practices Recommendations of the European Public Real Estate Association dated November 2016.

Mark to market adjustments represent fair value and have been provided by the counterparty as appropriate or by reference to the quoted fair value of financial instruments.

9. Property assets

Investment property and investment property under construction ("IPUC")

Investment properties are stated at fair value, as determined for the Company by Savills Commercial Limited and Jones Lang LaSalle as at 30 September 2018. The properties have been valued individually and on the basis of open market value in accordance with RICS Valuation - Professional Standards 2017 ("the Red Book").

Initial yields mainly range from 4.00% to 4.75% (March 2018: 4.10% to 4.75%) for prime units, increasing up to 8.00% (March 2018: 8.00%) for older units with shorter unexpired lease terms. For properties with weaker tenants and poorer units, the yields range from 5.60% to over 8.00% (March 2018: 5.50% to over 8.00%) and higher for those very close to lease expiry or those approaching obsolescence.

A 0.25% shift of valuation yield would have approximately a £100.5 million (March 2018: £94.0 million) impact on the investment property valuation:

As at 30 September 2018, 15 assets are held as available for sale (31 March 2018: 15 assets).

The total value of investment property is £1,825.9 million, which is completed investment property of £1,818.6 million plus £7.3 million of investment property held for sale.

10. Deferred revenue

11. Borrowings

The Group has the following bank facilities:

1. 10-year senior secured bond for £110 million at a fixed interest rate of 4.75% maturing in December 2021. The secured bond carries a loan to value covenant of 75% (70% at the point of substitution of an investment property or cash) and an interest cover requirement of 1.15 times (1.5 times at the point of substitution). In addition, the bond is subject to a WAULT test of 10 years which, if not met, gives the bondholder the option to request repayment of £5.5 million every six months. The WAULT of the charged properties is below 10 years at 30 September and £11.0 million has therefore been shown as due within one year, at the option of the bondholder. At the date of this report, the option has not been taken up.

2. Five-year club revolving credit facility with RBS, HSBC, Santander and Barclays for £300 million on an unsecured basis at an initial margin of 1.50% above LIBOR subject to LTV, expiring in May 2021. The facility is subject to a historical interest cover requirement of at least 175%, maximum LTV of 60% and a weighted average lease length of seven years. As at 30 September 2018, the facility was undrawn (31 March 2018: £130 million drawn).

3. 10-year notes in the US private placement market for a total £100 million. The notes are unsecured, have a fixed interest rate of 2.65% and were drawn on 13 October 2016. The facility is subject to a historical interest cover requirement of at least 175%, maximum LTV of 60% and a weighted average lease length of seven years.

4. £150 million of privately placed notes in two tranches with maturities of eight and 10 years drawn on 20 October 2017. The weighted average coupon is 3.04%. The facility is subject to a historical cost interest cover requirement of at least 175%, maximum LTV of 60% and weighted average lease length of seven years.

5. 10-year senior unsecured bond of £300 million at a fixed interest rate of 3.00% maturing July 2028. The facility is subject to an interest cover requirement of at least 150%, maximum LTV of 65% and Priority Debt not exceeding 0.25:1. In accordance with pricing convention in the bond market, the coupon and quantum of the facility are set to round figures with the proceeds adjusted based on market rates on the day of pricing.

The Group has been in compliance with all financial covenants on all of the above loans as applicable throughout the period.

12. Share capital

The Ordinary Shares issued in April 2017, July 2017, October 2017, January 2018, April 2018 and July 2018 were issued to shareholders who elected to receive Ordinary Shares in lieu of a cash dividend under the Company scrip dividend alternative.

In June 2017, a total of 163,999,820 new Ordinary Shares of 10 pence each were placed at a price of 60 pence per share. The raising resulted in gross proceeds of approximately £98.4 million which has been allocated appropriately between share capital (£16.4 million) and share premium (£82.0 million). Issue costs totalling £2.3 million were incurred and have been allocated against share premium.

In August 2017, 3,226,687 Ordinary Shares were issued following employees exercising nil-cost options awarded under the Value Creation Plan ("VCP").

On 6 December 2017, 545,124,813 Ordinary Shares were issued by way of a Firm Placing, Placing and Open Offer and Offer for Subscription at a price of 57 pence per Ordinary Share. Gross proceeds to the Company were £310.7 million, which has been allocated appropriately between share capital (£54.5 million) and share premium (£256.2 million). Issue costs totalling £9.7 million were incurred and have been allocated against share premium.

13. Commitments

At the period end the Group had four forward funding purchases on site (31 March 2018: five) with a contracted total expenditure of £18.5 million (31 March 2018: £36 million) of which £10.2 million (31 March 2018: £13.9 million) had been expended.

14. Dividends paid on Ordinary Shares

A dividend of 0.655 pence per share was paid to shareholders on 17 October 2018.

Directors' responsibilities statement

Principal risks and uncertainties

The factors identified by the Board as having the potential to affect the Group's operating results, financial control and/or the trading price of its shares were set out in detail in the Annual Report for the year ended 31 March 2018.

The Directors have reconsidered the principal risks and uncertainties facing the Group. Accordingly, the Directors do not consider that the principal risks and uncertainties have changed significantly since the publication of the Annual Report for the year ended 31 March 2018.

With respect to Brexit, the Board continues to monitor the situation but as disclosed in the Annual Report, do not consider Brexit, in itself, to constitute a significant risk to the business.

Going concern

The Directors continue to adopt the going concern basis of accounting in preparing the financial statements. The Group's properties are substantially let with the majority of rent paid or reimbursed by the NHS and they benefit from a weighted average lease length on the portfolio of 12.2 years. The Group has facilities from a variety of lenders, in addition to the secured and unsecured bonds, and has remained in compliance with all covenants throughout the period. In making the assessment, and having considered the continuing economic uncertainty, the Directors have reviewed the Group's financial forecasts which cover a period of 18 months beyond the balance sheet date, showing that borrowing facilities are adequate and the business can operate within these facilities and meet its obligations when they fall due for the foreseeable future. There have been no material changes in assumptions in the forecast from the basis adopted in making the assessment at the previous year end.

Directors' responsibilities statement

The Board confirms to the best of their knowledge:

· that the Interim Condensed Consolidated Financial Statements for the six months to 30 September 2018 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union; and

· that the Half Year Management Report comprising the Business Review and the principal risks and uncertainties includes a fair review of the information required by sections 4.2.7R and 4.2.8R of the Disclosure and Transparency Rules.

The above Directors' responsibilities statement was approved by the Board on 21 November 2018.

Jonathan Murphy Jayne Cottam

CEO CFO

21 November 2018

Independent review report to Assura plc

For the six months ended 30 September 2018

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2018 which comprise the Interim Condensed Consolidated Income Statement, the Interim Condensed Consolidated Balance Sheet, the Interim Condensed Consolidated Statement of Changes in Equity, the Interim Condensed Consolidated Statement of Cash Flow and the related Notes 1 to 14. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in Note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP - Statutory Auditor

Manchester, UK

21 November 2018