Final Results - Part 1

RNS Number : 7468U

Assura Group Limited

30 June 2009

 



Assura Group Limited

Preliminary Results

Strong progress made in transforming Assura into a leading healthcare company

GPCo business has established critical mass and is expanding rapidly

30 June 2009: Assura Group Limited ('Assura', or 'the Group' or 'the Company'), one of the leading healthcare companies in the UK, today provides its audited results for the year ended 31 March 2009. The comparative 2007/08 figures throughout these results relate to the 15 month period ended 31 March 2008.

Financial Highlights

• Group revenues up 19% to £48.3m (2008: £40.7m) equivalent to 42% annualised organic growth

• Pharmacy revenues of £26.7m (2008: £17.9m) with a gross margin of 30 per cent (2008: 26 per cent)1

• Group trading loss better than expected at £2.7m (2008: £5.4m loss)2

• Net cash inflow from operating activities of £5.3m (2008: £6.4m outflow)

• Net assets of £174m (2008: £265m), equivalent to 66.7p (2008: 117.4p) per Share3

• Investment portfolio valued at £278.9m (2008: £282.5m) as at 31 March 2009 reflecting a net initial yield of 6.27 per cent (2008: 5.27 per cent)

• 55 rent reviews settled (2008: 35) resulting in average annualised rental growth increase of 6.03 per cent (2008: 4.9 per cent)

• Rent roll at year end of £20.7m4

Operating Highlights

• 30 GPCos (2008: 15) formed covering a population of 3.1 million patients (2008: 1.8 million)5

• 55 NHS services (2008: 8) won or at preferred bidder stage with an estimated aggregate mature run rate of £20m revenue per annum5

• 31 live NHS services5,6 (2008: 6)

• 38 pharmacies trading7 (2008: 33)

• 22 additional pharmacy contracts granted, 8 of which are being disposed of and are currently in solicitors' hands5

• 118 investment properties (2008: 98) and 7 development properties (2008: 8) on site at 31 March 2009

• Reduced HQ expenses following restructuring of businesses and streamlined executive team likely to be in the region of £2m per annum

Financing Highlights

• £30m of new equity raised

• New debt facilities in place providing total facilities of £263m8 

• £25m cash in hand at year end

• 8 non-core investment properties divested to date for £21m9

• 5 non-core pharmacies and 8 pharmacy opportunities or licences divested or in solicitors' hands for a total of £5.5m5

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

2 Adjusted to include £1.0m share of trading losses of joint ventures (before interest and impairment).

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

4 Including the rental value of own premises.

5 As at 15 June 2009.

6 Excludes 9 private services and contracts which are yet to be operational or are at preferred bidder stage.

7 Includes 8 pharmacies which form part of the joint venture with GP Care.

8 A new £24m facility has received credit committee approval from Aviva but has yet to be completed.

9 Including the sale of two properties exchanged post year end.

Commenting on today's announcement, Richard Burrell, CEO of Assura said: 'Over the last year, Assura has made very good progress in transforming itself into a leading healthcare company. We are creating significant value through the establishment of our joint venture partnerships with GPs ('GPCos') and their ability to become highly effective, local community-based provider organisations. 

'With the business trading ahead of last year and budget, we are focusing on execution and moving our business towards profitability.'

Enquiries:

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

Chairman's Statement

Introduction

Despite the very difficult economic conditions experienced during the year, the Company has continued to transform itself from being a pure medical property investor and developer into a GP focused healthcare group providing medical and pharmacy services to patients and property services to primary care practices. 

During the year the Company rationalised its business model in order to concentrate more of its resources on the development of its GP Provider Organisations ('GPCos'). In support of this revised strategy the Company raised further equity from shareholders, refinanced its banking facilities, reduced HQ costs significantly and committed to a series of non-core asset disposals. At the same time, and in common with other companies with significant exposure to the property market, the Company saw significant write downs in its property portfolio. 

The Statements by the Chief Executive and Chief Financial Officer contain detailed reviews of the operating and financial results for the year, during which we have seen very positive momentum in winning new contracts and the roll-out of NHS services to patients in the communities served by our GPCos. 

Boards

The restructuring of the Company's operations from three separate business divisions with individual operating boards to a new executive management board has streamlined the management structure of the business and increased operating efficiency. Overheads have been reduced through headcount and other cost reduction measures, including salary reductions for both non-executive directors and members of the executive management board.

During the year the Company strengthened the Board of Directors through the appointment of Clare Hollingsworth as a non-executive director. Clare has extensive healthcare experience. She brings considerable knowledge and sector skills and is supporting and challenging the executive team.

Dividends

The Company's strategy is to fund the investment in its operating businesses from surplus rental income and non-core asset disposals. It is the Board's intention to resume dividend payments once they can be justified from sustainable operating earnings.

Outlook

Assura continues to see new opportunities emerge in the NHS as the Government increasingly opens up the provision of NHS services to the private sector. Demographic, technological and particularly economic pressures in the UK will continue to influence the way the NHS is run and delivers its services to patients. Whilst there will always be political debate associated with the opening of the market to private providers, the Board believes that the major political parties all support this agenda and will increasingly rely on private sector provision to deliver much needed efficiencies as future NHS budget and capital expenditure become constrained. The Board believes current policy is unlikely to be reversed, regardless of which political party is in power.

Management, staff and our GPCo partners should be commended for their continued dedication and commitment in developing Assura to be one of the UK's leading providers of NHS services to patients. I am excited by the prospects that lie ahead for the Company given the resilience and adaptability it has shown during these difficult times by continuing to grow and develop. The new financial year has started well and trading is ahead of last year and ahead of budget. I believe the Company will deliver long term value for shareholders when the true potential of the GPCo business is realised.

I look forward to meeting you at the AGM.

Rodney Baker-Bates

Non-Executive Chairman

29 June 2009

Chief Executive's Statement

Introduction

I am pleased with the progress Assura has made following the review of our business strategy during the year and the additional financing secured to support this. The review was conducted in order to maximise the opportunity to create shareholder value against the backdrop of a declining property market and the increasing business opportunity within the health sector. We concluded that simultaneous significant investment in all three of our businesses should not continue in the prevailing economic climate and we therefore put in place a number of measures to reduce our overheads, conserve cash and focus our newly streamlined management team on developing our GPCo business.

Assura's strategic direction is predicated on significant value being created through the establishment of our 50:50 joint venture partnerships with GPs (GPCos) and their ability to become highly effective, local community-based provider organisations. This is in the context of the NHS going through a period of radical reform, with the opening up of the market to private providers and a move by the NHS itself from being a monopoly provider of services to a commissioner and procurer of those services from a range of providers. By harnessing the power of our GP partners, giving them clinical leadership, aligning their commercial interests and providing them with the infrastructure required to do so, we have developed a unique business, with GPs at the centre, providing patients with clinical services which are paid for by the NHS. 

We are now focused on the progression into profitability of this business.

On an annualised basis we are reporting a 42 per cent increase in group revenues to £48.3m (2008: £34.1m equivalent 12 month period). Net cash inflow from operating activities was £5.3m (2008: £6.4m outflow). We have won 55 tendered services in our GPCo business and made strong progress in the pharmacy business from both existing stores trading and new licence wins. We have also achieved annualised rental growth in the investment property portfolio of 6 per cent (2008: 4.9 per cent) on reviews concluded in the year. We ended the year with a reduced trading loss of £2.7m which compares favourably to our trading loss forecast of between £4.0m and £6.0m and a trading loss of £5.4m for the previous 15 month period. The loss has been adjusted to include a £1.0m share of trading losses of the Company's joint ventures (before interest and impairment). It is worth noting that virtually all of the Company's income was derived from NHS expenditure and over half of the revenues were derived from the pharmacy stores. Whilst the build up of revenue attributable to our GPCos was disappointingly slow, we are experiencing a very significant uplift this year in GPCo revenues as a result of newly commissioned services going live and from new tendered contract wins for which bidding costs have been expensed.

As has been previously highlighted and in common with other companies who have significant exposure to the property market combined with long term interest rate hedging, the Company has seen a significant write down in its property portfolio of £56m and a £31m unrealised deficit on its interest rate swaps.

Operating Review 

GPCo business

We are pleased with the progress made during the year in the formation of new GPCos. As at 15 June 2009 the Company had formed 30 joint venture partnerships with GPs and locality groups serving over 3.1 million registered patients. Across these GPCos, 55 NHS services have now been won or are at preferred bidder stage (excluding nine private services). With this platform established, we are now looking at patient contacts (number of patient appointments), mature run rate for services (operational for at least 12 months) and new contract wins as our key performance indicators going forward.

Almost all GPCo services are commissioned by local NHS organisations (Primary Care Trusts) with contracts awarded on the basis of best value and quality either to a sole provider who competes to win the contract, or to multiple providers accredited for a service under the 'any willing provider' model. In most cases the GPCos are remunerated by way of NHS tariffs paid for each contact between a healthcare professional and a patient ('patient contact'). Patient contacts are a function of GP referrals, active marketing and word of mouth recommendations in the case of Walk-in Centres. The numbers of expected patient contacts and the forecast tariff income are the key determinants for estimating the mature run rate from service provision. Patient contacts and subsequent revenue in our GPCos have increased rapidly since the start of the new financial year. In the first two months of the new financial year our GPCos had more patient contacts than the entire year to 31 March 2009 as a result of new contracts going live.

A broad range of new community-based services for patients has been commissioned across the GPCos including audiology, ultrasound, physiotherapy, podiatry, fracture clinic, gynaecology and learning disabilities. These are in addition to those services already generating revenues including dermatology, urology, joint and soft tissue, nerve conduction studies, ophthalmology and minor surgery. Not all of our commissioned services are live but for those services which are, we anticipate a sharp increase in patient contacts and future revenues. For the 55 NHS services which have been won or are at preferred bidder stage as at 15 June 2009, the mature run rate is expected to be £20m per annum.

Included in the numbers above and as at 15 June 2009, the Company's joint venture partnerships were successful in winning 12 Equitable Access to Primary Medical Care services (EAPMC) contracts through the procurement programme announced by the Government in 2008. These contracts comprise two new GP Practices, eight new GP Led Health Centres and two Urgent Care Centres, with some of these also offering walk-in clinics, out-of-hours care and additional enhanced services. This programme will play a significant role in achieving more personalised care for patients as set out in Lord Darzi's NHS Next Stage Review. Our success in the EAPMC programme clearly demonstrates the strength of our GPCo model and shows that it can be applied successfully to win major NHS contracts. Four of the new EAPMC contracts have commenced the provision of services and detailed negotiations are underway to clarify final terms of the remaining contracts. In all cases we remain focused on ensuring that sustainable profits are derived once the services are mature. The Company intends to provide the cash required to fund the start-up of these contracts in each GPCo from its existing financing headroom.

Pharmacy business

2008 proved to be a very strong year in this business in many respects, with Assura Pharmacy securing more new standard pharmacy contracts than any other multiple pharmacy group in the UK. As at 15 June 2009, the Company had 38 pharmacies trading (including eight pharmacies which form part of the joint venture with GP Care in the Bristol area) with 22 additional contracts granted, 8 of which are being disposed of and are currently in solicitors' hands. The Company continues to source, apply for and secure new pharmacy licences within its GPCo areas for a number of its own property developments as well as for new developments undertaken by third parties.

During the year Assura's wholly-owned pharmacies (excluding the GP Care JV owned stores) dispensed 2.3 million prescription items and generated turnover of £26.7m (15 months ended 31 March 2008: £17.9m). We have seen a marked improvement in service revenues from the pharmacies through both nationally commissioned advanced services (e.g. Medicines Use Reviews) and locally commissioned enhanced services (e.g. Smoking Cessation Advice) and we are beginning to see profitable revenue streams from these activities. The year-on-year increase in revenue from stores that were trading for the whole of the previous 12 months was up 9 per cent. During the year, the Company achieved a gross margin of 30 per cent which increased from 26 per cent during the previous 15 month period. Total branch EBITDA for the wholly-owned pharmacies was £1.7m (15 months ended 31 March 2008: £nil).

We have seen a marked shift in emphasis by nearly all of the main UK pharmacy multiples away from opening traditional high street pharmacies towards sourcing pharmacies that are co-located within medical centres. Given both our expertise in securing new pharmacy licences and our unique positioning as a developer of primary care premises and operator of integrated pharmacies, we believe we are well positioned within this marketplace.

Property and LIFT business

The Company has carried out a review of its property investments, developments and land bank and has received a valuation report as at 31 March 2009 by Savills in respect of 118 investment properties which have been valued at £278.9m reflecting a net initial yield of 6.27 per cent. The consequential revaluation deficit on the investment portfolio amounts to £35.2m and £20.4m on the development portfolio and land bank. Savills' analysis of the portfolio, adjusting for acquisitions and sales during the year, shows a net fall in capital value of 9 per cent which compares favourably to the IPD All Property index fall over the same period of 30 per cent. This demonstrates that this particular type of property is resilient and tends to withstand market downturns better than other property sectors.

Rental growth across the investment property portfolio during the year was extremely encouraging despite the fall in capital values. 55 individual rent reviews were settled during the year, with an equivalent annual increase of 6.03 per cent on the passing rent relating to those properties. This growth, coupled with strong asset management, mitigated the abovementioned fall in capital values. The rent roll on the entire portfolio as at 31 March 2009 was £20.7m (including own premises). Despite the commercial property market being badly hit in the current economic downturn, recent trends are beginning to suggest some stabilisation and there appears to be appetite in the market for tenants with strong long term covenants, which is a characteristic of our portfolio. 81 per cent of the investment property portfolio's rental income is reimbursed by the NHS with a weighted average lease length across the portfolio of over 17 years.

The gradual shift in medical services from secondary care (hospitals) towards primary and community care mandated by the Department of Health continues to require large, modern, purpose-built premises. Following the reorganisation during the year, the Company has streamlined its property development activities to concentrate future development activities on GPCo areas and LIFTs (Local Improvement Finance Trusts). Within these areas, new developments will only be entered into if funding constraints permit and development activity has been organised accordingly. Additionally, the Company's LIFT team is involved in the management of six LIFT companies and derives fees and investment income from these associated companies. These six LIFT companies have an aggregate development pipeline of £220m in the next two years and derived £2.4m total fee income during the year.

At the year end, the Company had seven developments on site with a forecast final total cost of £51m, of which £38m was expended. The Company has, in addition, a land bank of 20 sites at a written down value of £12.8m.

As at 31 March 2009, total property assets were £336.7m and there was net debt drawn against these assets amounting to some £238.4m.

Overhead reduction

The Company has been operating as a single business unit since December 2008, following an extensive reorganisation. The management team has been restructured to create cost efficiencies in the operation of the business. A significant reduction in HQ overheads has been achieved through 36 headcount reductions, salary reductions and the elimination of unnecessary expenditure. The true value of these savings will become apparent during the 2009/10 financial year and they are likely to be in the region of at least £2m per annum.

Progress on disposals

In line with our revised strategy to concentrate resources on our existing and potential GPCos, we have made good progress with the disposal of certain non-core property and pharmacy assets which lie outside of these areas. In January we announced the disposal of six non-core property assets in Scotland and Wales for an aggregate sale price of £17.6m reflecting a net initial yield of 6.17 per cent. Sales contracts were exchanged on a further two properties in June 2009 for £3.0m, which was modestly ahead of the 31 March valuation of these assets. A further two properties identified for disposal are currently in solicitors' hands. We continue to consider the disposal of additional property assets lying outside of existing and potential GPCo areas and are encouraged by the interest we have received from prospective purchasers.

As at 15 June 2009, the Company had completed, signed contracts or had contracts in solicitors' hands in relation to the disposal of 13 non-core pharmacies and pharmacy opportunities or licences for circa £5.5m. It is anticipated that contracts will be signed on all of these transactions before the end of July 2009, with completion occurring at various times thereafter.

NHS and political environment

Real progress is now being made in the transformation of the NHS and the Board believes the Company has a powerful opportunity to realise value for its shareholders from these changes. 

The devolvement of power and decision making to local NHS bodies is helping local health economies avoid a mismatch between centrally set policy and locally generated demand. The opening up of the market to private providers continues and we are encouraged by the establishment of the 10 regional Commercial Units and the Cooperation and Competition Panel which are both strong indicators of progress and the Department of Health's commitment to creating a level playing field for both NHS and other providers.

The initiatives launched in Lord Darzi's NHS Next Stage Review are now being rolled out across the country and we have seen an invigoration of GPs and PCTs to embrace the changes set out. In addition to Lord Darzi's initiatives, the Department of Health has announced a national and local pilot scheme programme looking at progression to Integrated Care Organisations (ICOs). I am pleased to report that our Assura Cambridge GPCo, in partnership with two local Cambridgeshire organisations, has been appointed to run one of those pilot schemes. This potentially presents another opportunity for our GPCos to work with clinical colleagues from other sectors of the health economy, to shape and test new models of integrated care for patients.

With a general election due within the next 12 months, the health policies of the major political parties are still largely homogeneous. Whilst we do not expect the Government to implement any radical changes to policy in the lead up to an election, at the same time, the opposition parties' policies are not materially different to current policy and are supportive of the increased provision of NHS services by the private sector.

Outlook

Following the raising of the additional £80m funding package in October 2008 and the ongoing process of non-core disposals, Assura now has sufficient long term financing in place to execute its revised strategy.

We are making good progress with our revised strategy of focusing our resources on the Company's GPCos, enabling them to become highly effective providers of community-based medical services to patients and strong progress is being made in the roll-out of these services. This strategy has the clear support of the Government which is committed to the provision of primary and community care from modern, purpose-built facilities. Assura benefits from the long term leases from its GP tenants and the Government's position as ultimate guarantor of the rent and payor of tariffs for services. As demonstrated by the increase in revenues across the business, we believe this provides an attractive profile for investors in a very challenging economic climate and we look forward to continuing the roll-out of our strategy over the coming months.

Richard Burrell

Chief Executive

29 June 2009

Chief Financial Officer's Statement

This financial report covers the year ended 31 March 2009. The comparative period is the 15 month accounting period from 1 January 2007 to 31 March 2008. 

The results are reported across the four business segments of the Group, being the GPCo (medical) and pharmacy operating businesses and the property investment and development businesses. 

Results

Group revenues amounted to £48.3m compared with £40.7m for the 15 months ended 31 March 2008. This includes £19.2m (2008: £18.2m) of rental income and £26.7m (2008: £17.9m) of pharmacy revenue which has seen its gross margin increase to 30 per cent. Rental growth for reviews settled during the year showed an equivalent annual increase of 6.03 per cent and the rent roll of the property portfolio at the year end was £20.7m, with 81 per cent of this income directly reimbursed by the NHS making it an attractive security for banks. The Group revenues exclude the Company's 50 per cent share of revenue from GPCo and pharmacy joint ventures which increased from £0.1m in the 15 month period ended 31 March 2008 to £3.0m in the year ended 31 March 2009. The £3.0m of revenue comprised £0.4m derived from the GPCos and £2.6m from the pharmacy joint venture with GP Care. Revenue in the GPCos is currently rising strongly following a number of services commencing in the first quarter of the new financial year. For all NHS services commissioned or at preferred bidder stage at 15 June 2009, the mature run rate (for services operational for at least 12 months) is expected to be £20.0m. 

The Group's trading loss for the year was lower than our expectations at £2.7m compared with a loss of £5.4m in the prior period due to better than expected rental growth, enhanced pharmacy sales and margin and good control of costs. The loss has been adjusted to include the £1.0m share of trading losses of joint ventures (before interest and impairment). The table below illustrates this loss compared with the trading loss estimated at between £4.0m and £6.0m in the Placing Prospectus dated 28 October 2008.

	Year ended  31 March 2009                   £m		15 months ended 31 March 2008 £m
Group trading losses	(1.7)		(4.8)
Share of trading losses of joint ventures (before interest and impairment)	(1.0)		(0.6)
Trading loss on the same basis as the Placing Prospectus	(2.7)		(5.4)

Full details of the segmental results are given in note 16 to these financial statements.

Balance Sheet

At 31 March 2008 our property investment portfolio was independently valued, based on a net initial yield of 5.27 per cent (5.78 per cent net equivalent yield factoring in current market rent levels). During the year, property market conditions worsened and the portfolio was valued at 31 March 2009 based on a net initial yield of 6.27 per cent (6.56 per cent net equivalent yield). The resultant deficit on revaluation of the investment portfolio during the year amounted to £33.4m (2008: £1.2m surplus). A portfolio of six properties was sold in early 2009 realising a loss, compared with their March 2008 valuation, of £1.9m. The Company has reviewed the carrying value of all its land and development property, the bulk of which was also independently valued at 31 March 2009 and resulted in an additional deficit of £20.4m (2008: £7.7m surplus arising on completion of developments in the period). 

The Group has reviewed the carrying value of its goodwill and, based on the estimated net present value of future income streams from certain entities which have been acquired and generated goodwill previously, the Group has provided £4.3m (2008: £nil) for impairment of certain components of goodwill. Investments held by the Group, including 6.4 million shares in Stobart Group Limited, have fallen in value or been impaired by £3.1m (2008: £1.0m deficit), and the value of the Group's premises, plant and equipment including head office and pharmacy premises occupied by the Group has fallen by £2.5m (2008: £0.5m fall). The Group's shares in Stobart Group Limited, which were valued at £6.0m on 31 March 2009, were sold (ex-div) for £6.4m on 11 June 2009.

At the year end, the Group had cash in hand of £24.8m (2008: £20.5m) although £12.6m of this is ring-fenced to fund ongoing costs to completion of three property developments currently in progress and future interest charges. Gearing of 52 per cent (2008: 40 per cent), the calculation of which is detailed in note 38 to the accounts, is well below the principal bank's required Group gearing limit of 65 per cent. Including the investment property and swap revaluations, the fully diluted net asset value per Ordinary Share is 56.7p (2008: 118.0p). Ignoring the notional mark-to-market value of the swap the fully diluted net asset value per Ordinary Share is 66.7p (2008: 117.4p).

The Group's high quality property portfolio, characterised by both geographical and lot size diversity, in addition to the strong tenant covenant and long average lease length is attractive to banks. The Group has three bank facilities in place totaling £239m.

• National Australia Bank ('NAB')

£190m term loan available for four years from 30 March 2009. The loan reduces to £160m on 30 March 2010 and to £130m on 30 March 2011 (in line with the Group's planned disposal of non-core assets) and is then available until 30 March 2013. The facility has a margin of 2.25 per cent over LIBOR which falls to a margin of 2.1 per cent once the facility has reduced to £160m and to a margin of 1.95 per cent once the facility has reduced to £130m. Key covenants are that interest cover must remain above 130 per cent and the loan to value ratio of those properties secured to the bank must remain at or below 80 per cent. An interest penalty of 0.5 per cent applies if the loan to value ratio exceeds 75 per cent. As at 31 March 2009 the facility was fully utilised with actual interest cover of 147.6 per cent and a loan to value ratio of 71.5 per cent. Property values would need to fall by £28.5m, equivalent to a further adverse yield shift of 0.8 per cent on the £266m portfolio secured to NAB, for the Group to breach its loan to value covenant.

• Royal Bank of Scotland

£7.9m term loan for five years from March 2008 secured on one property with a margin of 1.2 per cent above a hedged rate of 5.1 per cent. This loan is subject to a loan to value ratio of 75 per cent and the fall in value of the property has necessitated a loan repayment of £1.1m that was made on the June 2009 quarter date.

• Norwich Union Commercial Finance (part of the Aviva Group 'NU')

Seven long term loans amounting to £41.2m in aggregate secured on seven investment and development properties. The average interest rate on these loans is 6.31 per cent and they are for terms of between 13 and 20 years with some amortisation. These loans are not subject to loan to value covenants. Discussions are currently ongoing with a view to securing a further eight loans from NU totaling an additional £41m to fund four new property developments (£20m planned but not committed) along with four near complete developments (£21m) which are not yet secured to any bank to provide additional headroom. 

In order to ensure that the Group can meet the planned reduction of £30.0m in the NAB term loan on 30 March 2010, and notwithstanding that disposals of non-core assets are planned with several in legal hands, the Group has also received credit committee approval from NU for a further £24.0m loan to be secured on a number of properties which are currently secured to NAB. A transfer of such assets from NAB to NU would create additional cash resources of £9.0m for the Group given the surplus security currently held by NAB.

The combination of the sale of the Group's shares in Stobart Group Limited on 11 June 2009, selected non-core property and pharmacy sales currently in legal hands, and new loan from NU, will create more than sufficient cash headroom for the Group for the foreseeable future. Effective headroom at 31 March 2009 was:

	£m
Cash in hand at 31 March 2009	25
Debt capacity from unmortgaged property assets	16
Surplus security held by NAB @ 75% loan to value	9
Headroom to 80% loan to value with NAB facility	12
	62

The Group's interest rate swaps amount to £200.0m fixed until 31 December 2009 at a rate of 2.99 per cent, from 1 January 2010 to 31 December 2011 at a rate of 3.29 per cent, and from 1 January 2012 to 30 September 2028 at a rate of 4.59 per cent. Net finance costs of £38.6m (2008: £1.3m net income) include a £31.5m unrealised deficit (2008: £3.7m unrealised surplus) on the interest rate swaps. Due to the fall in long term interest rates in the year, the notional market value of the swaps fell from a surplus of £5.9m at 31 March 2008 to a deficit of £25.6m at 31 March 2009. Since the year end, the long term interest rates have steadily increased and the notional mark-to-market value of the Group's interest rate swaps at 31 May 2009 was a significantly reduced deficit of £13.9m.

Taxation status

At an Extraordinary General Meeting held on 3 April 2008, shareholders approved the change in the designation of the Company by the UK Listing Authority 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.

As a result, the Group's trading profits are now subject to taxation in the UK, although corporation tax will only be paid in respect of property gains when these are actually realised. All property was transferred from an offshore subsidiary in Guernsey to new UK property investment companies based on independent valuations undertaken at the time of the transfers in December 2007. The Group is protected from UK corporation taxation for a reasonable period of time by this, along with trading losses in the pharmacy and medical services businesses.

Nigel Rawlings

Chief Financial Officer

29 June 2009

Consolidated Income Statement

For the period from 1 April 2008 to 31 March 2009

		12 months ended 31 March 2009	15 months ended 31 March 2008
	Notes	£'000	£'000
Revenue	4	48,283	40,748
Cost of sales	5	(20,546)	(16,234)
Gross profit		27,737	24,514
Administrative expenses	6	(29,436)	29,336
		(29,436)	29,336
Group trading losses		(1,699)	(4,822)
Unrealised (deficit) / surplus on revaluation of investment property	18	(33,369)	8,880
Realised deficit on sale of investment property		(1,878)	-
Impairment of development properties	19	(20,378)	-
Impairment of goodwill	21	(1,811)	-
Impairment of pharmacy licences	21	(2,498)	-
Impairment of non-current assets held for sale	26	(137)
Share based payment scheme		(910)	(1,704)
Restructuring costs		(592)	-
Revaluation deficit on property, plant and equipment and impairment of other investments	7	(5,539)	(1,453)
Share of post tax (losses)/profits of associates and joint ventures accounted for using the equity method	8	(3,978)	4,536
Termination of investment management services
Fees received		-	19,985
Payment to sub-advisers and other expenses		-	(6,141)
Goodwill impairment		-	(7,914)
	9	-	5,930
Operating (loss)/profit		(72,789)	11,367
Finance revenue	10	2,133	4,876
Finance costs	11	(40,717)	(3,604)
		(38,584)	1,272
(Loss)/profit before taxation		(111,373)	12,639
Taxation	12	563	1,005
(Loss)/profit for the year from continuing operations		(110,810)	13,644
Discontinued operations
Profit for the period from discontinued operations	13	-	155
(Loss)/profit for the year		(110,810)	13,799
(Loss)/profit for the year attributable to:
Equity holders of the parent		(110,689)	14,071
Minority interest		(121)	(272)
		(110,810)	13,799
Earnings per share (pence)
Basic earnings per share from continuing operations	14	(43.38)p	6.15p
Diluted earnings per share from continuing operations	14	(43.38)p	6.15p
Basic earnings per share on profit for the period	14	(43.38)p	6.22p
Diluted earnings per share on profit for the period	14	(43.38)p	6.22p

All items in the above statement are derived from continuing operations. 

Consolidated Balance Sheet

as at 31 March 2009

		31/03/2009	31/03/2008
	Notes	£'000	£'000
Non-current assets
Investment property	18	278,925	282,511
Development property	19	54,767	57,268
Investments in associates	20	7,491	8,744
Investments in joint ventures	20	10,807	8,619
Intangible assets	21	41,844	37,887
Property, plant and equipment	22	26,798	23,867
Other investments	23	5,968	9,047
Derivative financial instruments at fair value	29	-	5,862
Deferred tax asset	37	-	193
		426,600	433,998
Current assets
Cash and cash equivalents	24	24,790	20,460
Debtors	25	9,693	14,268
Inventories		1,640	1,343
Property work in progress		1,053	1,023
		37,176	37,094
Non-current assets held for sale and included in disposal groups	26	509	-
Total assets		464,285	471,092
Current liabilities
Creditors	27	26,298	16,118
		26,298	16,118
Non-current liabilities
Long-term loan	28	236,679	188,419
Payments due under finance leases	27	1,076	1,172
Derivative financial instruments at fair value	29	25,609	-
Deferred tax liability	37	912	-
		264,276	189,591
Total Liabilities		290,574	205,709
Net assets		173,711	265,383
Represented by:
Capital and reserves
Share capital	30	31,747	23,522
Own shares held	30	(5,093)	(4,561)
Share premium	31	23,212	2,073
Distributable reserve	32	213,614	224,116
Retained earnings	33	(93,233)	17,201
Revaluation reserve	34	3,642	3,089
		173,889	265,440
Minority interests		(178)	(57)
Total equity		173,711	265,383
Basic net asset value per Ordinary Share	35	56.69p	118.01p
Diluted net asset value per Ordinary Share	35	56.69p	118.01p
Adjusted basic net asset value per Ordinary Share	35	66.71p	117.43p
Adjusted diluted net asset value per Ordinary Share	35	66.71p	117.43p

The financial statements were approved at a meeting of the Board of Directors held on 29 June 2009 and signed on its behalf by:

Richard Burrell, Executive Director

Nigel Rawlings, Executive Director

Consolidated Statement of Changes in Equity

For the year from 1 April 2008 to 31 March 2009

	Share Capital	Own Shares Held	Share Premium	Distributable Reserve	Retained Earnings
	£'000	£'000	£'000	£'000	£'000
1 April 2008	23,522	(4,561)	2,073	224,116	17,201
Revaluation of land & buildings	-	-	-	-
Depreciation transfer for land and buildings	-	-	-	-	74
Profit/(loss) attributable to equity holders and minority interest	-	-	-	-	(110,689)
Total income and expense for the period	-	-	-	-	(110,615)
Dividends on Ordinary Shares	-	-	-	(10,502)	-
Cost of employee share-based incentives	-	-	-	-	910
Issue of deferred shares	-	-	-	-	(729)
Issue of Ordinary Shares	8,225	-	23,101	-	-
Issuance costs on issuance of Ordinary shares	-	-	(1,962)	-	-
Own shares held	-	(532)	-	-	-
31 March 2009	31,747	(5,093)	23,212	213,614	(93,233)
	Share Capital	Own Shares Held	Share Premium	Distributable Reserve	Retained Earnings
	£'000	£'000	£'000	£'000	£'000
1 January 2007	23,400	(807)	226,678	15,564	1,852
Revaluation of land & buildings	-	-	-	-	-
Profit/(loss) attributable to equity holders and minority interest	-	-	-	-	14,070
Total income and expense for the period	-	-	-	-	14,070
Transfer from share premium¹	-	-	(226,678)	226,678	-
Dividends on Ordinary Shares	-	-	-	(18,126)	-
Cost of employee share-based incentives	-	-	-	-	1,578
Issue of Ordinary Shares	122	-	2,073	-	-
Own shares held	-	(3,754)	-	-	-
Deferred share-based consideration	-	-	-	-	-
Minority interest acquired in period	-	-	-	-	-
Minority interest disposed of in period	-	-	-	-	(299)
31 March 2008	23,522	(4,561)	2,073	224,116	17,201

	Revaluation Reserve	Deferred Consideration Reserve	Total	Minority Interest	Total Equity
	£'000	£'000	£'000	£'000	£'000
1 April 2008	3,089	-	265,440	(57)	265,383
Revaluation of land & buildings	627	-	627	-	627
Depreciation transfer for land and buildings	(74)	-	-	-	-
Profit/(loss) attributable to equity holders and minority interest	-	-	(110,689)	(121)	(110,810)
Total income and expense for the period	553	-	(110,062)	(121)	(110,183)
Dividends on Ordinary Shares	-	-	(10,502)	-	(10,502)
Cost of employee share-based incentives	-	-	910	-	910
Issue of deferred shares	-	-	(729)	-	(729)
Issue of Ordinary Shares	-	-	31,326	-	31,326
Issuance costs on issuance of Ordinary shares	-	-	(1,962)	-	(1,962)
Own shares held	-	-	(532)	-	(532)
31 March 2009	3,642	-	173,889	(178)	173,711
	Revaluation Reserve	Deferred Consideration Reserve	Total	Minority Interest	Total Equity
	£'000	£'000	£'000	£'000	£'000
1 January 2007	106	790	267,583	(83)	267,500
Revaluation of land & buildings	2,983	-	2,983	-	2,983
Profit/(loss) attributable to equity holders and minority interest	-	-	14,070	(272)	13,798
Total income and expense for the period	2,983	-	17,053	(272)	16,781
Transfer from share premium¹	-	-	-	-	-
Dividends on Ordinary Shares	-	-	(18,126)	-	(18,126)
Cost of employee share-based incentives	-	-	1,578	-	1,578
Issue of Ordinary Shares	-	-	2,195	-	2,195
Own shares held	-	-	(3,754)	-	(3,754)
Deferred share-based consideration	-	(790)	(790)	-	(790)
Minority interest acquired in period	-	-	-	(1)	(1)
Minority interest disposed of in period	-	-	(299)	299	-
31 March 2008	3,089	-	265,440	(57)	265,383

1.  Following application to the Royal Court of Guernsey, £226,678,000 was transferred from Share Premium account to Distributable Reserves on 29 June 2007. 

Consolidated Cash Flow Statement 

For the period from 1 April 2008 to 31 March 2009

		12 months ended 31 March 2009	15 months ended 31 March 2008
	Note	£'000	£'000
Operating Activities
Rent received		22,334	19,467
Revenue from pharmacies		26,691	17,866
Fees received		2,431	4,652
Dividend received		511	172
Payment received on termination of investment management services		-	10,698
Termination payment to sub-advisers		-	(5,902)
Bank and other interest received		1,622	3,340
Cash paid to suppliers and employees		(18,802)	(34,799)
Purchases by pharmacies		(18,627)	(13,236)
Interest paid and similar charges		(10,865)	(8,680)
Net cash (outflow)/inflow from operating activities	36	5,295	(6,422)
Investing Activities
Purchase of development and investment property		(66,829)	(92,844)
Proceeds from sale of development and investment property		17,922	-
Purchase of investments in associated companies	20	(5)	(13)
Purchase of investments in joint venture companies	20	(2,930)	-
Purchase of other investments		-	(500)
Purchase of property, plant and equipment		(3,927)	(2,671)
Proceeds from sale of fixed assets		189	-
Costs associated with registration of pharmacy licenses		(634)	(3,318)
Debt sold with subsidiary	13	-	4,265
Cash paid on acquisition of subsidiaries	21	(5,876)	(3,255)
Cost of development work in progress		(1,307)	(3,675)
Loans advanced to associated companies		158	(2,575)
Loans advanced to joint ventures		(2,137)	(8,301)
Net cash outflow from investing activities		(65,376)	(112,887)
Financing Activities
Issue of Ordinary Shares		30,064	-
Issue costs paid on issuance of Ordinary Shares		(1,962)	-
Dividends paid		(10,502)	(18,126)
Purchase of own shares		-	(3,754)
Repayment of long-term loan	28	(232,356)	(154,258)
Drawdown of long-term loan	28	280,167	298,420
Loan issue costs		(1,000)	(1,355)
Net cash inflow from financing activities		64,411	120,927
Increase in cash and cash equivalents		4,330	1,618
Opening cash and cash equivalents		20,460	18,842
Closing cash and cash equivalents	24	24,790	20,460

Notes to the Preliminary Announcements 

For the period from 1 April 2008 to 31 March 2009

1. Corporate information and operations

Assura Group Limited was incorporated in Guernsey as a closed-ended investment company with its investment objective to achieve capital growth and rising rental income from the ownership and development of a diversified portfolio of primary health care properties.

Subsequent to its incorporation the activities were broadened to include the provision of pharmacy and medical services. As a result of this increasing pharmacy and medical services activity the Company was reclassified by the FTSE Industry Classification Committee from Property to Healthcare Equipment and Services on 24 September 2007. Furthermore, until 3 April 2008 the Company was managed and controlled from Guernsey, however, at an Extraordinary General Meeting on 3 April 2008, shareholders approved the reclassification of the Company to a trading company and, immediately after, the Board agreed to move the Company's central management and control to the UK given that this is the location of its expanding trading operations. 

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

2. Principal accounting policies

Basis of preparation

The financial information set out in this preliminary announcement is derived from but does not constitute the Group's statutory accounts for the year ended 31 March 2009 and period ended 31 March 2008, and as such, does not contain all information required to be disclosed in the financial statements prepared in accordance with the International Financial Report Standards ('IFRS'). The financial information has been extracted from the Group's audited consolidated statutory accounts upon which the auditors have issued an unqualified opinion. All accounting policies are shown below.

Consolidation

The consolidated financial statements have been prepared on a historical cost basis, except for investment properties, land and buildings, derivative financial instruments and available-for-sale investments that have been measured at fair value.

This financial report covers the 12 month accounting period from 1 April 2008 to 31 March 2009 and the 15 month accounting period from 1 January 2007 to 31 March 2008 following the change of year end to accord with that of the NHS and our joint venture partners in our GP joint venture companies. As a consequence the comparatives for the Consolidated Income Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and disclosures are not entirely comparable.

The Financial Statements are presented in pounds sterling to the nearest thousand.

The Group financial statements consolidate the financial statements of Assura Group Limited and its subsidiary undertakings drawn up to 31 March 2009.

All intra-Group balances, transactions, income and expenses and profits and losses resulting from intra-Group transactions that are recognised in assets, are eliminated in full.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights, currently exercisable or convertible potential voting rights, or by way of contractual agreement. The financial statements of subsidiaries used in the preparation of the Consolidated Financial Statements are prepared for the same reporting period as the parent company and are based on consistent accounting policies. 

Minority interests represent the portion of profit or loss and net assets not held by the Group and are presented in the Consolidated Income Statement, and within equity in the Consolidated Balance Sheet, separately from parent shareholders' equity. Acquisitions of minority interests are accounted for using the parent entity extension method whereby the difference between the consideration and the book value of the share of the net assets acquired is recognised as goodwill.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, and sales taxes or duty. The following specific recognition criteria must also be met before revenue is recognised: 

Pharmacy sales - revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, on the date of sale.

Interest income - revenue is recognised as interest accrues using the effective interest method. The effective interest method is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset.

Dividends receivable - revenue is recognised when the Company's right to receive the payment is established.

Rental revenue - rental income arising from operating leases on investment properties is accounted for on a straight line basis over the lease term and is shown net of VAT.

Property management fees - income is accounted for on an accruals basis.

Expenses

All expenses are accounted for on the accruals basis.

Dividends payable

In accordance with IAS 10 Events after the Balance Sheet Date, dividends payable on Ordinary Shares declared and paid after the period end are not accrued.

Exceptional items

The Group presents as exceptional items on the face of the Consolidated Income Statement those material items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to better assess trends in financial performance.

Share issue costs

Placing expenses incurred in relation to the issue of Ordinary shares are written off in full against the share premium account.

Business combinations and goodwill

Business combinations are accounted for using the purchase method. This involves recognising identifiable assets (including previously unrecognised intangible assets) and liabilities (including contingent liabilities and excluding future restructuring costs) of the acquired business at fair value.

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash generating units, or groups of cash generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is allocated:

• represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and

• is not larger than a segment based on either the Group's primary or the Group's secondary reporting format determined in accordance with IAS 14 Segment Reporting. 

Intangible assets

Intangible assets including Pharmacy Licenses acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. 

The useful lives of intangible assets are assessed to be either finite or indefinite, and for those with finite useful lives the costs are expensed over the life of the asset.

Third party costs incurred on the registration of pharmacy licenses are recognised as intangible assets when it is probable that the licence will be granted and its costs can be measured reliably. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Costs and time incurred by the Group's own staff in registering pharmacy licenses are fully expensed by the Group.

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not supportable, the change in the useful life assessment from indefinite to finite is made on a prospective basis.

Both goodwill and capitalised development costs in respect of pharmacy licenses and pharmacy licenses themselves have indefinite useful lives and are tested for impairment annually as at the balance sheet date either individually or at the cash generating unit level, as appropriate.

Goodwill is allocated to cash generating unit for the purpose of impairment testing. For intangibles arising from business combinations, this allocation is made to those cash generating units that are expected to benefit from the business combination in which the goodwill arose. The recoverable amount of a cash generating unit is determined based on value-in-use calculations. These calculations use cash flow projections based on detailed financial models prepared by management, with all anticipated future cash flows discounted to current day values.

Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists the Group makes an estimate of the asset's recoverable amount being the higher of an asset's or cash-generating unit's fair value less costs to sell, and its value in use, and is determined for an individual asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples.

Impairment losses of continuing operations are recognised in the Consolidated Income Statement in those expense categories consistent with the function of the impaired asset, except for property previously revalued where the revaluation was taken to equity. In this case the impairment is recognised in equity up to the amount of any previous revaluation.

Impairment losses recognised in relation to goodwill are not reversed for subsequent increases in its recoverable amount for assets including goodwill. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the Consolidated Income Statement. 

Investments in subsidiary companies

Investments in subsidiary companies are initially recognised and subsequently carried at cost in the Company Financial Statements, less any provisions for diminution in value. 

Investments in associates

The Group's investments in associates are accounted for under the equity method of accounting. An associate is an entity in which the Group has significant influence and which is neither a subsidiary nor a joint venture.

Under the equity method, investments in associates are carried in the balance sheet at cost plus post-acquisition changes in the Group's share of net assets of the associates. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group's net investment in the associates. The Consolidated Income Statement reflects the share of the results of operations of the associates after tax. Where there has been a change recognised directly in the equity of the associates, the Group recognises its share of any changes and discloses this, when applicable, in the Statement of Changes in Equity.

Any goodwill arising on the acquisition of an associate, representing the excess of the cost of the investment compared to the Group's share of the net fair value of the associate's identifiable assets, liabilities and contingent liabilities, is included in the carrying amount of the associate and is not amortised. 

The financial statements of the associates are prepared for the same reporting period as the Group or with a maximum difference of three months wherever possible, using consistent accounting policies.

Investments in joint ventures

The Group has interests in joint ventures which are jointly controlled entities. A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, and involves the establishment of a separate entity in which each venturer has an interest. The Group recognises its interest in joint ventures using equity accounting. The equity accounting method is described in the 'investments in associates' accounting policy above.

The financial statements of joint ventures are prepared for the same reporting period as the Group or with a maximum difference of three months wherever possible using consistent accounting policies.

Financial assets

Financial assets are recognised when the Group becomes party to the contracts that give rise to them and are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or as available-for-sale financial assets, as appropriate. The Group determines the classification of its financial assets at initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year end.

(a) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are initially measured at fair value and are subsequently carried at amortised cost using the effective interest method less any allowance for impairment. Amortised cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate and transaction costs. Gains and losses are recognised in the Consolidated Income Statement when the loans and receivables are derecognised or impaired, as well as through the amortisation process. 

(b) Derivative financial instruments and hedging activities

The Group uses derivative financial instruments, in the form of interest rate swaps, to hedge its risks associated with interest rate fluctuations. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The Group has classified its derivative instruments as financial assets which are stated at fair value and movements are recognised through the Consolidated Income Statement.  

Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. 

The fair values of hedging derivatives are classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months, and as a current asset or liability if the remaining maturity of the hedged item is less than 12 months.

The fair value of interest rate swap contracts is determined by reference to market values for similar instruments. 

(c) Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as such or are not classified in any of the preceding categories. After initial recognition, available-for-sale financial assets are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired at which time the cumulative gain or loss previously reported in equity is included in the Consolidated Income Statement.

(d) Quoted investments

The fair value of quoted investments is determined by reference to bid prices at the close of business on the balance sheet date. Where there is no active market, fair value is determined using valuation techniques. These include using recent arm's length market transactions; reference to the current market value of another instrument which is substantially the same; discounted cash flow analysis and pricing models. Otherwise assets will be carried at cost.

Investment property - freehold

Freehold properties are initially recognised at cost, being the fair value of consideration given, including transaction costs associated with the property.

After initial recognition, freehold investment properties are measured at fair value, with changes in fair value recognised in the Consolidated Income Statement. Fair value is based upon the open market valuations of the properties as provided by a firm of independent chartered surveyors as at the balance sheet date.

Investment property - long leasehold

Long leasehold properties are initially recognised as both an asset and lease creditor at the present value of the ground rents payable over the term of the lease. Long leasehold properties are subsequently revalued in accordance with IAS 40 up to the fair value as advised by the independent valuer as noted above for freehold properties. The lease creditor is amortised over the term of the lease using the effective interest method.

The lease payments are apportioned between the reduction of the lease liability and finance charges in the Consolidated Income Statement.

Investment property transfers

Transfers are made to investment property when there is a change in use, evidenced by the end of the Group's occupation, commencement of an operating lease to another party or completion of construction or development. Transfers are made from work in progress to development property upon completion of the purchase of the land or upon commencement of the development or construction. Transfers are made from investment property when there is a change in use, evidenced by commencement of the Group's occupation or commencement of development with a view to sale.

For a transfer from investment property to owner occupied property, the deemed cost of property for subsequent accounting is its fair value at the date of change in use. If the property previously occupied by the Group as an owner occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use. For a transfer from development to investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the Consolidated Income Statement. When the Group completes the construction or development of a self-developed investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the Consolidated Income Statement.

Development property

Development property which comprises land and buildings under construction includes capitalised interest where applicable and is carried at cost or, if lower, at cost less accumulated impairment.  Cost includes all directly attributable third party expenditure incurred. 

Property, plant and equipment

Land and buildings are measured at fair value less depreciation on buildings and impairment charged subsequent to the date of the revaluation. Fair value is based on independent values of the property apportioned between that element used for the business of the Group and that element rented to third parties. 

Plant and equipment is stated at cost, excluding the costs of day to day servicing, less accumulated depreciation and accumulated impairment in value.

Depreciation is provided on a straight line basis at rates calculated to write off the cost less estimated residual value of each asset over its useful life, as follows:

Building work and long leasehold improvements	25 years
Fixtures and fittings	4 years
Office and computer equipment	3 years
Medical equipment	Between 3 and 10 years depending on the nature of the equipment

Valuations are performed frequently to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Any revaluation surplus is credited to the asset Revaluation Reserve included in the equity section of the balance sheet, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in the Consolidated Income Statement, in which case the increase is recognised in the Consolidated Income Statement. A revaluation deficit is recognised in the Consolidated Income Statement, except that a deficit directly offsetting a previous surplus on the same asset is directly offset against the surplus in the asset revaluation reserve.

An annual transfer from the asset Revaluation Reserve to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the assets and depreciation based on the asset's original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred to retained earnings.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Consolidated Income Statement in the year the asset is derecognised.

The assets' residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.

Loans to subsidiary companies

The loans to subsidiary companies are accounted for on an amortised cost basis with inter-company interest being recognised under the effective interest rate method. The loans are reviewed regularly for impairment. 

Capitalisation of interest

Finance costs which are directly attributable to the development of investment property are capitalised as part of the cost of the investment property. The commencement of capitalisation begins when both finance costs and expenditure for the property are being incurred and activities that are necessary to prepare the asset ready for use are in progress. Capitalisation ceases when all the activities that are necessary to prepare the asset for use are complete. 

Pharmacy inventories

Pharmacy inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Cost is defined as average purchase price.

Property pre-acquisition costs 

Property work in progress comprises costs incurred on property pre-acquisition and investment opportunities including bid costs which are capitalised when the transaction is virtually certain. Costs are written off to the Consolidated Income Statement only if the project becomes abortive. Costs are transferred to investment property if the opportunity results in the purchase of an income generating property. Costs are transferred to development property on acquisition of the land or development site.

Cash and cash equivalents

Cash and cash equivalents are defined as cash in hand, demand deposits, cash held in deposit accounts and highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value. For the purposes of the Consolidated Cash Flow Statement, cash and cash equivalents consist of cash in hand and deposits in banks.

Bank loans and borrowings

All bank loans and borrowings are initially recognised at fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any discount or premium on settlement.

Leases

Group as a lessee

Assets held under finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease, with a corresponding liability being recognised for the lower of the fair value of the leased asset and the present value of the minimum lease payments. Lease payments are apportioned between the reduction of the lease liability and finance charges in the Consolidated Income Statement so as to achieve a constant rate of interest on the remaining balance of the liability. Assets held under finance leases are depreciated over the shorter of the estimated useful life of the asset and the lease term.

Leases where the lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases and rentals payable are charged in the Consolidated Income Statement on a straight line basis over the lease term.

Group as a lessor

Assets leased out under operating leases are included in property, plant and equipment and depreciated over their estimated useful lives. Rental income, including the effect of lease incentives, is recognised on a straight line basis over the lease term.

Where the Group transfers substantially all the risks and benefits of ownership of the asset, the arrangement is classified as a finance lease and a receivable is recognised for the initial direct costs of the lease and the present value of the minimum lease payments. As payments fall due, finance income is recognised in the Consolidated Income Statement so as to achieve a constant rate of return on the remaining net investment in the lease.

Provisions

A provision is recognised when the Group has a legal or constructive obligation as a result of a past event. It is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, expected future cash flows are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.

Where the Group expects some or all of a provision to be reimbursed, for example under an insurance policy, the reimbursement is recognised as a separate asset but only when recovery is virtually certain. The expense relating to any provision is presented in the Consolidated Income Statement net of any reimbursement. Where discounting is used, the increase in the provision due to unwinding the discount is recognised as a finance cost.

Income taxes

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rules and laws enacted or substantively enacted at the balance sheet date.

Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exceptions:

• where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;

• in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and

• deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date. Deferred income tax assets and liabilities are offset only if a legally enforcement right exists to set off current tax assets against current tax liabilities, the deferred income taxes relate to the same taxation authority and that authority permits the Group to make a single net payment.

Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income tax is recognised in the Consolidated Income Statement.

Share-based payment transactions 

Employees (including senior executives) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments ('equity settled transactions').

In situations where some or all of the goods or services received by the entity as consideration for equity instruments cannot be specifically identified, they are measured as the difference between the fair value of the share-based payment and the fair value of any identifiable goods or services received at the grant date. For cash-settled transactions, the liability is measured at each reporting date until settlement.

Equity-settled transactions

The cost of equity-settled transactions with employees, for awards granted, is measured by reference to the fair value at the date on which they are granted. The fair value is determined by reference to market price on the date of grant.

In valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked to the price of the shares of the company (market conditions).

The cost of equity-settled transactions is recognised by a charge in the Consolidated Income Statement, together with a corresponding credit in Retained Earnings, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('the vesting date'). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The Consolidated Income Statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon market conditions, which are treated as vesting irrespective of whether or not the market conditions are satisfied, provided that all other performance conditions are satisfied.

Where the terms of an equity-settled award are modified, the minimum expense recognised is the expense if the terms had not been modified. An additional expense is recognised for any modification, which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification. 

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any cost not yet recognised in the Consolidated Income Statement for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an expense in the Consolidated Income Statement.

Cash-settled transactions

The cost of cash-settled transactions is measured initially at fair value at the grant date using a binomial model. This fair value is expensed over the period until vesting with recognition of a corresponding liability. 

Own shares held

Assura Group shares held by the Company and the Group are classified in shareholders' equity as 'own shares held' and are recognised at cost. Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds from sale and the original cost being taken to retained earnings. No gain or loss is recognised in the Consolidated Income Statement on the purchase, sale, issue or cancellation of equity shares. 

Changes in accounting policy and disclosures

The accounting policies adopted are consistent with those of the previous financial period except as follows:

      a.     New standards, amendments to published standards and interpretations to existing standards adopted by the 
              Group:

• 
  
• IFRIC 14 IAS19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their interaction are also mandatory for this period but the Group has no transactions relevant to these interpretations.
  
  
• IAS 23 Borrowing Costs (effective for accounting periods beginning on or after 1 January 2009). The main change from the previous version is the removal of the option of immediately recognising as an expense borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale. There was no impact on the Group accounts from its adoption.

b.    Standards, amendments and interpretations to published standards not yet effective:

Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the Group's accounting periods beginning on or after 1 January 2009 or later periods and which the Group has decided not to adopt early. These are:

• IFRS 8, Operating Segments (effective for accounting periods beginning on or after 1 January 2009). This standard sets out requirements for disclosure of information about an entity's operating segments and also about the entity's products and services, the geographical areas in which it operates and its major customers. It replaces IAS 14, Segmental Reporting. The Group is currently assessing the impact on its financial statements from adopting IFRS 8.

• IFRIC 12 Service Concession Arrangements has not yet been endorsed by the EU. It is not expected to impact upon the Group's accounts.

• IAS 1 Presentation of Financial Statements: Assets and liabilities classified as held for trading in accordance with IAS 39 Financial Instruments: Recognition and Measurement are not automatically classified as current in the balance sheet. This is not expected to result in any reclassification of financial instruments in the balance sheet.

• IAS 1 Presentation of Financial Statements. Whilst the revised IAS 1 will have no impact on the measurement of the Group's results or net assets, it is likely to result in certain changes in the presentation of the Group's financial statements from 2009 onwards.

• IAS 16 Property, Plant and Equipment: Replace the term 'net selling price' with 'fair value less costs to sell'. This is not expected to result in any change in the financial position of the Group.

• IAS 28 Investment and Associates: If an associate is accounted for at fair value in accordance with IAS 39, only the requirement of IAS 28 to disclose the nature and extent of any significant restrictions on the ability of the associate to transfer funds to the entity in the form of cash or repayment of loans applies. This amendment is not expected to impact on the Group as it does not account for its associates at fair value in accordance with IAS 39.

An investment in an associate is a single asset for the purpose of conducting the impairment test. Therefore, any impairment test is not separately allocated to the goodwill included in the investment balance. This amendment is not expected to impact on the Group because this policy already applies.

• IAS 31 Interest in Joint Ventures: If a joint venture is accounted for at fair value, in accordance with IAS 39, only the requirements of IAS 31 to disclose the commitments of the venturer and the joint venture, as well as summary financial information about the assets, liabilities, income and expense will apply. This amendment is not expected to impact on the Group because it does not account for its joint ventures at fair value in accordance with IAS 39.

• IAS 36 Impairment of Assets: When disclosed cash flows are used to estimate 'fair value less cost to sell' additional disclosure is required about the discount rate, consistent with disclosures required when the discounted cash flows are used to estimate 'value in use'. This amendment is not expected to impact on the consolidated financial statements of the Group because the recoverable amount of its cash generating units is currently estimated using 'value in use'.

• IAS 38 Intangible Assets: Expenditure on advertising and promotional activities is recognised as an expense when the Group either has the right to access the goods or has received the service. This amendment is not expected to impact on the Group because this policy already applies.

The reference to there being rarely, if ever, persuasive evidence to support an amortisation method of intangible assets other than a straight-line method has been removed. This is not expected to impact on the consolidated results of the Group because there are no intangible assets with finite lives.

• IFRS 2 Share-based payment (amended): Clarification of the definition of a vesting condition. This amendment is not expected to impact on the Group because there are no relevant vesting conditions.

• IFRS 3 Business Combinations (Revised): The Group does not anticipate early adopting the revised  IFRS 3 and so will apply it prospectively to all business combinations on or after 1 January 2010. Whilst it is not possible to estimate the outcome of adoption, the key features of the revised IFRS 3 include a requirement for acquisition related costs to be expensed and not included in the purchase price; and for contingent consideration to be recognised at fair value on the acquisition date (with

subsequent changes recognised in the Consolidated Income Statement and not as a change to goodwill). The standard also changes the treatment of non controlling interests (formerly minority interests) with an option to recognise these at full fair value as at the acquisition date and a requirement for previously held non-controlling interests to be fair valued as at the date control is obtained, with gains and losses recognised in the Consolidated Income Statement.

• IAS 27 Consolidated and Separate Financial Statements (Amendment) is effective for annual periods beginning on or after 1 July 2009, with earlier application only permitted when the revised IFRS 3 is applied. The revised standard applies retrospectively with some exceptions. IAS 27 revised no longer restricts the allocation to minority interest of losses incurred by a subsidiary to the amount of the non-controlling equity investment in the subsidiary. A partial disposal of equity interest in a subsidiary that does not result in a loss of control will be accounted for as an equity transaction and will have no impact on goodwill nor will it give rise to any gain or loss. Where there is loss of control of a subsidiary, any retained interest will have to be remeasured to fair value, which will impact the gain or loss recognised on disposal. The Group is currently assessing the impact on its financial statements from adopting IAS 27 revised.

The directors do not anticipate that the adoption of the remaining standards and interpretations will have a material impact on the Group's financial statements in the period of initial application.

• IFRS 1 and IAS 27 Cost of an investment in a Subsidiary, Jointly Controlled Entity or Associate (amendment).

• IFRS 7 Financial Instruments: Disclosure (amendment).

• IAS 32 and IAS 1 Puttable Financial Instruments and Obligations Arising On Liquidation (amendment).

• IAS 39 Eligible hedged items.

• IFRIC 14 IAS 19 - The limit on a Defined Benefit Asset, Minimum Funding Requirements and their interaction.

• IFRIC 13 Customer loyalty programmes.

• IFRIC 15 Agreements for the Construction of Real Estate.

• IFRIC 16 Hedges of a Net Investment in a Foreign Operation.

• IFRIC 17 Distributions of Non-Cash Assets to Owners.

• IFRIC 18 Transfers of Assets from Customers.

Improvements to IFRSs 

In May 2008 the IASB issued 'Improvements to IFRSs', a standard setting out amendments to existing standards, which is effective for accounting periods beginning on or after 1 January 2009. One amendment will require property under construction or development to be classified as investment properties. Currently these are disclosed as development properties which will result in a presentational change on the balance sheet when the standard is adopted. Where fair values cannot be determined during construction or development, but it is expected that fair value can be determined upon completion, the asset will be recorded at cost until such time that as fair value can be determined or construction is complete. This is consistent with current group policy. The group does not expect the other amendments to have a material impact on the financial statements.

3. Summary of significant accounting judgements, estimates and assumptions

The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors including reasonable future expectations. Those estimates and assumptions which could have a material impact on the carrying value of assets and liabilities within the next financial year are discussed below.

Judgements, estimates and assumptions

a. Valuation of investment property

All investment properties are stated at fair values, which have been determined based on valuations undertaken by independent valuers on the basis of open market value. See note 18.

b. Impairment of development property

The Group tests annually whether development property may have suffered impairment based on expected values at completion less anticipated costs to complete, both of which involve judgment and estimation. See note 19.

c. Impairment of goodwill and intangible assets

The Group tests annually whether goodwill may have suffered impairment utilising value in use calculations whereby future cash flows are estimated and discounted, using an appropriate discount rate, to their net present value. See note 21

d. Financial assets

The Group classifies certain financial assets as available-for-sale and recognises movements in their fair value in equity. When the fair value declines, management makes assumptions about the decline in value to determine whether it is an impairment that should be recognised in profit or loss. See note 23.

e. Derivative financial instruments

The fair value of interest rate swap contracts is determined by reference to market values for similar instruments. See note 38.

f. Deferred tax asset

Management judgment to determine the amount of deferred tax assets that can be recognised based upon the unlikely timing and level of future taxable profits together with assessment of the effect of future tax planning. See note 37. 

The estimation of the fair value is based on reasonable assumptions but these can vary from time to time. 

4. Revenue		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Rent receivable		19,161	18,230
Revenue from pharmacies		26,690	17,866
Fund management		-	2,234
Other fees receivable		2,085	2,418
Revenue from medical equipment hire		334	-
Revenue from medical management charges		13	-
Total Revenue		48,283	40,748
Bank and other interest		1,622	1,044
Unrealised profit on revaluation of derivative financial instrument		-	3,660
Income from investments		511	172
		50,416	45,624

5. Cost of Sales		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Property management expenses		1,826	2,277
Purchases by pharmacies		18,627	13,237
Fund management direct costs		-	720
Equipment hire costs		23	-
Medical direct costs		70	-
		20,546	16,234

6. Administrative expenses		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Salaries and other staff costs	(a)	14,923	15,681
Auditors' remuneration	(b)	573	526
Directors' fees	(c)	1,132	430
Other admin expenses		10,730	11,579
Depreciation		2,078	1,120
		29,436	29,336

(a) Salaries and other staff costs		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Wages and salaries		13,381	14,246
Social security costs		1,538	1,430
Pension costs		4	5
		14,923	15,681

The average monthly number of employees during the year was made up as follows:

		12 months ended 31 March  2009	15 months ended 31 March  2008
Medical		82	45
Pharmacy		296	142
Property investment		32	15
Property development		20	54
		430	256

Following finalisation of the restructure programme undertaken the number of full time equivalent employees at 1 June 2009 was as follows:

		1 June 2009
Medical		103
Pharmacy		211
Property investment		6
Property development		11
LIFT		28
		359

Key management staff		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Salaries		1,281	1,292
Cost of employee share-based incentives		363	297
Social security costs		160	146
		1,804	1,735

(b) Auditors' remuneration		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Group audit		136	129
Statutory audit		165	231
Total audit fees		301	360
Audit related fees - one /(two) interim reviews		22	40
Tax services - compliance		57	126
Tax services - advisory		58	-
Transaction services - reporting accountants in relation to share placement		135	-
Total		573	526

Statutory audit 2008 includes £85,000 in respect of 2006 audits.

(c) Directors' fees		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Directors emoluments		1,012	430
Contributions to retirement plans		120	-
		1,132	430

Mr Burrell and Mr Rawlings were appointed as Executive Directors on 3 April 2008.

Amounts paid to the highest paid director were as follows:

		Total emoluments	Total emoluments
		£'000	£'000
Mr Richard Burrell		474	-

No directors are accruing benefits under any defined benefit pension scheme.

7.  Unrealised revaluation losses		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Unrealised deficit on revaluation of property, plant and equipment		2,460	464
Unrealised deficit on revaluation of other investments		3,079	989
		5,539	1,453

The other investments noted above relate to Ordinary shares in Stobart Group Limited. These shares were sold on 9 June 2009.

8. Share of post tax (losses)/ profits of associates and joint ventures accounted for using the equity method		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Share of (losses)/profits of associated companies		(1,101)	5,087
Share of losses of joint ventures		(2,877)	(551)
		(3,978)	4,536

The above share of profits/(losses) includes a loss of £871,000 (2008: profit of £4,854,000) in respect of developed investment property revalued for the first time since practical completion.

9. Termination of investment management services		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'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). 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 held 6,382,474 (2.7%) Ordinary Shares in Stobart Group Limited which were 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 2009, 93.5p. These shares were subsequently sold for £1 each in June 2009.

10. Finance revenue		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Bank and other interest		1,622	1,044
Unrealised profit on revaluation of derivative financial instrument		-	3,660
Income from investments		511	172
		2,133	4,876

11. Finance costs		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Long term loan interest payable		12,709	9,221
Unrealised loss on revaluation of derivative financial instrument		31,471	-
Interest capitalised on developments		(3,270)	(3,415)
Swap interest		(1,643)	(2,328)
Non-utilisation fees		-	86
Amortisation of loan issue costs		1,450	-
Bank charges		-	40
		40,717	3,604

Interest was capitalised on property developments at 6% (2008: 6%).

12. Taxation

Consolidated income tax		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Current Tax
Current income tax charge		-	-
Adjustments in respect of current tax of previous periods		20	-
Deferred Tax
Relating to origination and reversal of temporary differences		(583)	(1,005)
Income tax credit reported in consolidated income statement		(563)	(1,005)

The differences from the standard rate of tax applied to the profit before tax may be analysed as follows:
		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
(Loss)/profit from continuing operations before taxation		(111,373)	12,639
Loss from discontinued operations before taxation		-	(719)
Gain on disposal of discontinued operations			874
Net(loss)/profit before taxation		(111,373)	12,794
UK Income tax at rate of 28% (2008: 22%)		(31,184)	2,815
Effects of:
Capital gains on revaluation of investment properties not taxable		-	(1,954)
Non taxable income		(143)	-
Unrealised deficits not tax deductible on revaluation of premises and other investments		862	320
Expenses not deductible for tax purposes		3,224	-
Gain on revaluation of financial derivative not taxable		-	(268)
Gain on revaluation of derivative financial instrument not taxable		-	(805)
Net effect of inter-company loan interest		-	(1,633)
Share-based payments not tax deductible		255	375
Unrealised gains on revaluation of investments in associates		309	(1,119)
Unrecognised tax losses		2,917	1,901
Deferred tax asset previously not recognised		-	(637)
Other deferred tax assets not recognised		23,417	-
Adjustment in respect of prior years		(220)	-
		(563)	(1,005)

In the prior period the majority of the profits were subject to Income tax under the Offshore Landlord Scheme as Assura Property Limited and Assura Group Limited were resident in Guernsey for corporation tax purposes. This resulted in the majority of income being subject to income tax at 22% rather than corporation tax at 30%. With effect from 3 April 2008 the Group's affairs have been conducted such that it is resident in the UK for tax purposes. All profits are therefore now subject to Corporation Tax at 28%.

13. Profit for the period from discontinued operations

No operations have been discontinued during the current year ended 31 March 2009.

During the previous period, the Group disposed of its 70% holding in BHE Developments Limited whose activity was property development for a consideration of £1. The business, which was loss making, was outside the scope of Assura's core business.

The results of BHE Developments Limited for the period to its date of sale, 12 September 2007, are presented below:

		12 months ended 31 March  2009	15 months ended 31 March  2008
		£'000	£'000
Revenue		-	36
Administrative expenses		-	(758)
Finance revenue		-	3
Loss before taxation		-	(719)
Gain on disposal of discontinued operations		-	874
Profit/(loss) for the period from discontinued operations		-	155

At the date of disposal the net liabilities of BHE Developments were £874,000. The net cash flows attributable to BHE Developments Limited were as follows:

		12months ended 31 March  2009	15 months ended 31 March  2008
Operating cash flows		-	(719)
Net cash outflow		-	(719)

		31/03/09	31/03/08
Profit/(loss) per share from discontinued operations (pence)
Basic		-	0.07
Diluted		-	0.07

The total disposal consideration and major classes of assets and liabilities sold and is analysed as follows: 

	31/03/09	31/03/08
	£'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)

	31/03/09	31/03/08
	£'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)

14. Earnings per Ordinary Share

The basic loss per Ordinary Share is based on the loss attributable to equity holders of the parent for the period of £110,689,000 (2008: profit of £14,071,000) and on 255,152,896 Ordinary Shares (2008: 226,284,648), being the weighted average number of Ordinary Shares in issue in the respective year.

The diluted loss per Ordinary Share is based on the loss for the period attributable to equity holders of the parent of £110,689,000 (2008: £14,071,000) and on 255,152,896 Ordinary Shares (2008: 226,284,648), being the weighted average number of Ordinary Shares in issue in the respective year.

	12 months ended 31 March 2009	15 months ended 31 March 2008
Weighted average number of shares – basic	255,152,896	226,284,648
Weighted average number of own shares held	-	-
Weighted average number of shares – diluted	255,152,896	226,284,648

The following reflects the income and share data used in the basic and diluted earnings per share computations:

	12 months ended 31 March  2008	15 months ended 31 March  2008
	£’000	£’000
(Loss)/profit for the year from continuing operations	(110,810)	13,644
Add minority liabilities	121	272
(Loss)/profit attributable to equity holders of the parent – continuing operations	(110,689)	13,916
(Loss)/profit attributable to equity holders of the parent – discontinued operations	-	155
(Loss)/Profit attributable to equity holders of the parent	(110,689)	14,071

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 £nil (2008: £155,000), divided by the weighted average number of Ordinary Shares for both basic and diluted amounts as per the table above.

15. Dividends paid on Ordinary Shares

	Number of Ordinary Shares	Rate pence	2009	Number of Ordinary Shares	Rate pence	2008
			£’000			£’000
Final dividend for 2008 (2006)	235,213,115	4.67	10,984	233,998,471	4.00	9,360
Interim dividend for 2009 (2008)	-	-	-	234,463,115	2.33	5,463
Second interim dividend for 2009 (2008)	-	-	-	235,213,115	1.75	4,116
		4.67	10,984		8.08	18,939

Following shareholder approval, and application to the Royal Court of Guernsey, £226,678,000 was transferred from the share premium account to distributable reserves on 29 June 2007. Dividends on 'own shares held' are recognised in distributable reserves.

Of the above cost of dividends paid on ordinary shares, £482,000 related to dividends paid on shares held by the Assura Executive Equity Incentive Plan (EEIP). The cost of these dividends has therefore been eliminated on consolidation resulting in a movement on the distributable reserve of £10,502,000.

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

After obtaining shareholder agreement, the directors do not intend to pay a final dividend for the year ending 31 March 2009.

 

END

 

 

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