Final Results Part 2

RNS Number : 4675X

Assura Group Limited

25 June 2008

 



Assura Group Limited

('Assura' or 'the Group' or 'the Company')

Audited results for the fifteen months ended 31 March 2008

Part 2 

The above share of profits/(losses) include £4,854,000 (2006: £nil) in respect of developed investment property revalued for the first time since practical completion.

11. Exceptional pharmacy establishment cost		15 months ended 31 March  2008	12 months ended 31  December 2006
		£'000	£'000
Pharmacy establishment cost		-	1,105

The Company entered into an arrangement with Pharma-e Limited, of which Dr John Curran is a Director and shareholder, to compensate Pharma-e Limited for consultancy services provided to the Group in connection with establishment of the pharmacy business of Assura Pharmacy Limited. The consideration was met by the issue of 650,000 Ordinary shares in the Company to Pharma-e Limited on 15 May 2006. The fair value of the shares issued was based on the market value of the shares on the date of issue. The weighed average fair value is the same as the fair value.

12. Termination of investment management services		15 months ended 31 March  2008	12 months ended 31  December  2006
		£'000	£'000
Fees received		19,985	-
Fees payable to sub-advisers		(5,901)	-
Other expenses		(240)	-
Goodwill impairment		(7,914)	-
		5,930	-

On 16 August 2007 the Company announced the termination of the investment management services provided by Assura Fund Management LLP, a subsidiary of the Company, to Stobart Group Limited (formerly The Westbury Property Fund Limited), subject to shareholder approval by the latter company. 

Termination of the services was approved by the shareholders of Stobart Group Limited, at an Extraordinary General Meeting held on 19 September 2007, the profit for the Group from the payment of a termination fee by Stobart Group Limited is after allowance for payments to sub-advisers, taxation and estimated goodwill impairment.

That part of the payment which related to a performance fee due to the Company was taken in shares in Stobart Group Limited. As a result the Company holds 6,382,474 (2.7%) Ordinary Shares in Stobart Group Limited which are available for resale subject to a lock-in of two years commencing on the date of issue of the shares. The share price at date of issue was 145.5p and at 31 March 2008, 130.0p.

13. Finance revenue		15 months ended 31 March  2008	12 months ended 31  December  2006
		£'000	£'000
Bank and other interest		1,044	1,032
Unrealised profit on revaluation of derivative financial instrument		3,660	2,202
Realised profit on revaluation of derivative financial instrument		-	3,473
Income from investments		172	-
		4,876	6,707

In 2005 the Company entered into a 20 year interest rate swap at a rate of 4.5725%, on its full debt facility of £100m. On 2 November 2006, the swap was increased to £200m (£150m effective from 30 June 2007 and £200m effective from 31 December 2007) all at a new rate of 4.59% expiring on 31 December 2027. Throughout the period, the swap rate was below the three month LIBOR rate hence the Company benefited from income arising from the swap. Based on the actual 20 year swap rate at 31 March 2008, the fair value of this swap was a surplus of £5,862,000 (2006: £2,202,000).

14. Finance costs		15 months ended 31  March  2008	12 months ended 31  December 2006
		£'000	£'000
Long term loan interest payable		9,221	1,782
Interest capitalised on developments		(3,415)	(734)
Swap interest		(2,328)	(197)
Non-utilisation fees		86	190
Bank and other interest payable		-	34
Bank charges		40	31
		3,604	1,106

Interest was capitalised at 6% (2006: 5.45%).

15. Taxation

A reconciliation of the income tax charge applicable to the results from ordinary activities at the statutory income tax rate to income tax expense at the Group's effective income tax rate for the year is as follows:

						15 months ended 31 March  2008	12 months ended 31  December 2006
						£'000	£'000
Profit from continuing operations before taxation						12,639	18,800
Loss from discontinued operations before taxation						(719)	(331)
Gain on disposal of discontinued operations						874	-
Net profit before taxation						12,794	18,469
UK Income tax at rate of 22%						2,815	4,063
Effects of:
Capital gains on revaluation of investment properties not taxable						(1,954)	(3,749)
Unrealised deficits not tax deductible on revaluation of premises and other investments						320	-
Income not taxable including interest receivable						(268)	(227)
Gain on revaluation of derivative financial instrument not taxable						(805)	(1,248)
Net effect of inter-company loan interest						(1,633)	(2,031)
Performance fee provision not tax deductible						-	(222)
Share-based payments not tax deductible						375	524
Unrealised gains on revaluation of investments in associates						(1,119)	-
Losses arising not relievable against current tax						1,901	2,930
Deferred tax asset previously not recognised						(637)	-
						(1,005)	40

The Company and its Guernsey registered subsidiaries, Assura Property Limited, Assura Administration Limited and Assura Pharmacy Holdings Limited, have obtained exempt company status in Guernsey under the terms of the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 so that they are exempt from Guernsey taxation on income arising outside Guernsey and on bank interest receivable in Guernsey. Each Company is, therefore, only liable to a fixed fee of £600 per annum. The directors intend to conduct these companies such that they continue to remain eligible for exemption. A taxation charge of £1,800 arose in Guernsey.

Assura Property Limited is subject to United Kingdom income tax on income arising on the investment properties, after deduction of its debt financing costs, allowable expenses and capital allowances. Assura Property Limited also has a place of establishment in the UK and provides management, administration and related services which are liable to corporation tax in the UK.

The Company's UK subsidiaries are subject to United Kingdom corporation tax on their profits less losses, although no charge (2006: £40,000) was incurred in the period.

With effect from 3 April 2008 the Group's affairs are conducted such that it will be considered to be resident in the UK for tax purposes.

16. Profit for the period from discontinued operations

On 12 September 2007 the Group disposed of its 70% holding in BHE Developments Limited whose activity was property development for a consideration of £1. The business, which is loss making, is outside the scope of Assura's core business.

The results of BHE Developments Limited for the period to 12 September 2007 and 31 December 2006 are presented below:

		15 months ended 31 March  2008	12 months ended 31  December  2006
		£'000	£'000
Revenue		36	-
Administrative expenses		(758)	(331)
Finance revenue		3	-
Loss before taxation		(719)	(331)
Gain on disposal of discontinued operations		874	-
Profit/(loss) for the period from discontinued operations		155	(331)

At the date of disposal the net liabilities of BHE Developments were £874,000, and the net liabilities of the company at 31 December 2006 were £155,000. The net cash flows attributable to BHE Developments Limited are as follows:

		15 months ended 31 March  2008	12 months ended 31 December  2006
Operating cash flows		(719)	(331)
Net cash outflow		(719)	(331)

		31/03/08	31/12/06
Profit/(loss) per share from discontinued operations (pence)
Basic		0.07	(0.17)
Diluted		0.07	(0.17)

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

	31/03/08	31/12/06
	£'000	£'000
Assets and liabilities disposed of other than cash		-
Intangible assets	160	-
Property, plant and equipment	22	-
Debtors	5,902	-
Creditors	(793)	-
Inter-Group loan	(1,900)	-
Interest-bearing liabilities	(4,300)	-
Total assets and liabilities disposed of other than cash and cash equivalents	(909)	-

	31/03/08	31/12/06
	£'000	£'000
Cash and cash equivalents relating to the disposal	-	-
Cash and short-term deposits in BHE Developments on disposal	(35)	-
Net cash outflow from disposal of subsidiary undertaking	(35)	-

17. Earnings per Ordinary Share

The basic profit per Ordinary Share is based on the profit attributable to equity holders of the parent for the period of £14,071,000 (2006: £18,900,000) and on 226,284,648 Ordinary Shares (2006: 195,205,087), being the weighted average number of Ordinary Shares in issue in the respective year.

The diluted profit per Ordinary Share is based on the profit for the period attributable to equity holders of the parent of £14,071,000 (2006: £18,900,000) and on 228,742,375 Ordinary Shares (2006: 200,310,356), being the weighted average number of Ordinary Shares in issue in the respective year.

	15 months ended 31 March 2008	12 months ended 31 December 2006
Weighted average number of shares – basic	226,284,648	195,205,087
Weighted average number of own shares held	2,457,727	5,105,269
Weighted average number of shares – diluted	228,742,375	200,310,356

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

	15 months ended 31  March  2008	12 months ended 31 December  2006
	£'000	£'000
Profit for the year from continuing operations	13,644	18,760
Add minority liabilities	272	471
Profit attributable to equity holders of the parent - continuing operations	13,916	19,231
Profit/(loss) attributable to equity holders of the parent - discontinued operations	155	(331)
Profit attributable to equity holders of the parent	14,071	18,900

Discontinued operations

Profit/(loss) per share for the discontinued operations is derived from the net profit attributable to equity holders of the parent from discontinuing operations of £155,000 (2006: loss of £331,000), divided by the weighted average number of Ordinary Shares for both basic and diluted amounts as per the table above.

18. Dividends paid on Ordinary Shares

	Number of Ordinary Shares	Rate pence	2008	Number of Ordinary Shares	Rate pence	2006
			£’000			£’000
Final dividend for 2006 (2005)	233,998,471	4.00	9,360	142,403,847	3.34	4,756
Interim dividend for 2008 (2006)	234,463,115	2.33	5,463	233,998,471	2.00	4,680
Second interim dividend for 2008	235,213,115	1.75	4,116		-	-
		8.08	18,939		5.34	9,436

Following shareholder approval, and application to the Royal Court of Guernsey, £25,000,000 was transferred from the share premium account to distributable reserves on 2 June 2006 and a further £226,678,000 was similarly transferred on 29 June 2007. Dividends on 'own shares held' are recognised in distributable reserves.

The directors intend to recommend a final dividend of 4.67p per Ordinary Share be paid to shareholders on the Company's register on 27 June 2008.

19. Segmental information

The directors are of the opinion that the Group is engaged in four business segments, being medical and pharmacy services, primary care premises investment, primary care premises development and associated property related services. All the Group's activities and investments in primary health care properties and related activities are situated in the UK and in Guernsey. 

The primary investment segment reporting format is determined to be business segments as the Group's risks and rates of return are affected predominantly by differences in the products and services provided. There is no secondary information as the activities of the Company are deemed to be in one geographical location, the UK and Guernsey. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

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

The Pharmacy segment operates integrated pharmacies in medical centres. 

The Property Investment segment invests in primary care premises.

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

Unrealised surplus on revaluation of investment properties is split between Property Investment and Property Development on the basis that after transfer of the property to investment property, the first revaluation surplus is shown in the Property Development segment.

Transfer prices between business segments are set on an arm's length basis in a manner similar to transactions with third parties. Segment revenue, segment expense and segment result include transfers between business segments. Those transfers are eliminated on consolidation. 

The following table presents revenue, profit and certain assets and liability information regarding the Group's business segments:

15 months ended 31 March 2008:

	Medical Services	Pharmacy	Property Investment	Property Development
	£'000	£'000	£'000	£'000
Revenue from external customers	47	17,866	20,245	-
Inter-segment sales	-	-	1,058	-
Segment revenue	47	17,866	21,303	-
Operating profit/(loss)	(7,823)	(3,785)	14,742	(4,711)
Cost of employee share-based incentives	(677)	(402)	(101)	(383)
Share of profits/(losses) of associates and joint ventures	(534)	(17)	-	5,087
Unrealised surplus on revaluation of investment properties	-	-	1,167	7,713
Unrealised deficit on revaluation of property, plant and equipment	-	-	(464)	-
Segmental result	(9,034)	(4,204)	15,344	7,706
Unrealised deficit on revaluation of other investments	-	-	-	-
Termination of investment management services
Fees received	-	-	-	-
Payment to sub-advisors and other expenses	-	-	-	-
Goodwill impairment	-	-	-	-
	-	-	-	-
Net finance revenue/(cost)	-	-	-	-
Gain on disposal of discontinued operations	-	-	-	-
Profit/(loss) before tax	(9,034)	(4,204)	15,344	7,706
Taxation	-	-	-	-
Profit/(loss) for the period	(9,034)	(4,204)	15,344	7,706
Assets and liabilities
Fixed assets	543	3,025	301,310	57,268
Equity accounted investments	1,030	7,589	-	8,744
Current assets	2,120	6,442	19,120	1,209
Segment assets	3,693	17,056	320,430	67,221
Unallocated assets
Total assets
Segment Liabilities
Current liabilities	(1,421)	(4,001)	(6,343)	(241)
Non-current liabilities
Total liabilities
Other segmental information
Capital expenditure:
Property, plant and equipment	485	1,816	14,225	-
Intangible assets	1,418	-	6,573	-
Depreciation	279	313	460	-

	Eliminations and Unallocated items	Continuing	Discontinued	Total
	£'000	£'000	£'000	£'000
Revenue from external customers	2,590	40,748	-
Inter-segment sales	(1,058)	-	-
Segment revenue	1,532	40,748	-
Operating profit/(loss)	(3,245)	(4,822)	(719)
Cost of employee share-based incentives	(141)	(1,704)	-
Share of profits/(losses) of associates and joint ventures	-	4,536	-
Unrealised surplus on revaluation of investment properties	-	8,880	-
Unrealised deficit on revaluation of property, plant and equipment	-	(464)	-
Segmental result	(3,386)	6,426	(719)
Unrealised deficit on revaluation of other investments	(989)	(989)	-
Termination of investment management services
Fees received	19,985	19,985	-
Payment to sub-advisors and other expenses	(6,141)	(6,141)	-
Goodwill impairment	(7,914)	(7,914)	-
	5,930	5,930	-
Net finance revenue/(cost)	1,272	1,272	-
Gain on disposal of discontinued operations	-	-	874
Profit/(loss) before tax	2,827	12,639	155
Taxation	1,005	1,005	-
Profit/(loss) for the period	3,832	13,644	155
Assets and liabilities
Fixed assets	1,500	363,646	-	363,646
Equity accounted investments	-	17,363	-	17,363
Current assets	8,203	37,103	-	37,094
Segment assets	9,703	418,103	-	418,376
Unallocated assets		52,989	-	52,989
Total assets		471,092	-	471,092
Segment Liabilities
Current liabilities	(4,112)	(16,118)	-	(16,118)
Non-current liabilities		(189,591)	-	(189,591)
Total liabilities		(205,709)	-	(205,709)
Other segmental information
Capital expenditure:
Property, plant and equipment	42	16,568	-	16,568
Intangible assets	-	7,991	-	7,991
Depreciation	68	1,120	-	1,120

Year ended 31 December 2006:

	Medical Services	Pharmacy	Property Investment	Property Development
	£'000	£'000	£'000	£'000
Revenue from external customers	-	2,792	13,331	-
Inter-segment sales	-	-	114	-
Segment revenue	-	2,792	13,445	-
Operating profit/(loss)	(1,993)	(1,970)	6,720	(4,102)
Cost of employee share-based incentives	(241)	(281)	(139)	(525)
Share of losses of associates and joint ventures	(37)	-	-	(1,417)
Unrealised surplus on revaluation of properties	-	-	15,558	1,483
Exceptional pharmacy establishment cost	-	(1,105)	-	-
Segmental result	(2,271)	(3,356)	22,139	(4,561)
Movement in performance fee provision	-	-	-	-
Net finance revenue	-	-	-	-
Profit/(Loss) before tax	(2,271)	(3,356)	22,139	(4,561)
Taxation	-	-	-	-
Profit/(loss) for the year	(2,271)	(3,356)	22,139	(4,561)
Assets and liabilities
Property, plant and equipment	182	1,807	256,567	35,222
Equity accounted investments	869	-	-	1,070
Current assets	1,392	2,006	9,277	203
Segment assets	2,443	3,813	265,844	36,495
Unallocated assets
Total assets
Segment liabilities Current liabilities	(3,433)	(4,441)	(5,199)	(470)
Non-current liabilities
Total liabilities
Other segmental information
Capital expenditure:
Property, plant and equipment	1,016	1,564	3,358	-
Intangible assets	-	248	-	3,718
Depreciation	92	53	80	-

	Eliminations and Unallocated items	Continuing	Discontinued	Total
	£'000	£'000	£'000	£'000
Revenue from external customers	-	16,123	-
Inter-segment sales	(114)	-	-
Segment revenue	(114)	16,123	-
Operating profit/(loss)	-	(1,345)	(331)
Cost of employee share-based incentives	(93)	(1,279)	-
Share of losses of associates and joint ventures	-	(1,454)	-
Unrealised surplus on revaluation of properties	-	17,041	-
Exceptional pharmacy establishment cost	-	(1,105)	-
Segmental result	(93)	11,858	(331)
Movement in performance fee provision	1,010	1,010	-
Net finance revenue	5,601	5,601	(331)
Profit/(Loss) before tax	6,518	18,469	-
Taxation	(40)	(40)	(331)
Profit/(loss) for the year	6,478	18,429	-
Assets and liabilities
Property, plant and equipment	-	293,778	9	293,787
Equity accounted investments	-	1,939	-	1,939
Current assets	-	12,878	820	13,698
Segment assets	-	308,595	829	309,424
Unallocated assets		18,841	-	18,841
Total assets		327,436	829	328,265
Segment liabilities Current liabilities	-	(13,543)	(984)	(14,527)
Non-current liabilities		(46,238)	-	(46,238)
Total liabilities		(59,781)	(984)	(60,765)
Other segmental information
Capital expenditure:
Property, plant and equipment	196	6,134	-	6,134
Intangible assets	27,104	31,070	-	31,070
Depreciation	78	303	-	303

20. Investments in subsidiaries

A table listing all the subsidiaries, including other dormant subsidiaries, is below:

Name of subsidiary	Place of incorporation	Share-holding 2008	Share-holding 2006	Business activity
Assura Property Limited	Guernsey	100%	100%	Property investment
Assura Pharmacy Holdings Limited	Guernsey	100%	100%	Holding company
Assura Pharmacy Limited	England	100%	100%	Pharmacy
Assura PharmaInvest Limited	England	100%	-	Holding Company
Clearup Limited	England	100%	-	Dormant
P&L Worsley Limited	England	100%	-	Dormant
Armside Chemists Limited	England	100%	-	Dormant
Assura Mobility Limited	England	100%	-	Dormant
Trinity Healthcare Consortium Limited	England	100%	100%	Dormant
Crown Heights Health Consortium Limited	England	100%	100%	Dormant
Crown Heights Consortium (No. 2) Limited	England	100%	-	Dormant
Assura Medical Limited	England	100%	100%	Management of clinical services
Assura Estates Limited	Guernsey	100%	100%	Dormant
Assura Medical Solutions Limited	England	100%	100%	Dormant
Assura Administration Limited  (sold 1 April 2008)	Guernsey	100%	100%	Company administration services
Assura LIFT Holdings Limited	England	100%	100%	Investment holding company
Assura Intelligence Limited (formerly Stream Partners Limited)	England	100%	100%	Medical data processing company
Assura Investments Limited (formerly Strategis Limited)	England	100%	100%	Property investment
Assura Services Limited	England	100%	100%	Dormant
Assura Fund Management LLP	England	100%	100%	Fund management
PCI Management Limited	England	100%	100%	Holding company
Primary Care Initiatives (Macclesfield) Limited	England	100%	100%	Property investment
BHE (Heartlands) Limited	England	100%	100%	Property investment
BHE (Bonnyrigg) Limited	England	100%	100%	Dormant
BHE (Wand) Limited	England	100%	100%	Dormant
BHE Management Services Limited	England	100%	100%	Management services
Assura (Scotland) Limited	Scotland	100%	100%	Dormant
BHE (St James) Limited	England	100%	100%	Property investment
Assura Finance Limited	England	100%	100%	Finance company
Assura Nominees Limited (sold 1 April 2008)	Guernsey	100%	100%	Nominee holding company
Assura Management Services Limited	England	100%	-	Management services
Assura Diagnostics Limited	England	80%	-	Hirer of diagnostic equipment
Assura Property Management Limited	England	100%	-	Property management
Assura Properties Limited	England	100%	-	Property investment
Assura Properties UK Limited	England	100%	-	Property investment
Urosonics Limited	England	100%	-	Dormant
Cystoscope Hire Limited	England	100%	-	Dormant
Assura Retail York Limited	England	100%	-	Property Investment
Assura Health and Wellness Centres Limited	England	100%	-	Trading company
Assura Care Homes Limited	England	100%	-	Trading company
GB Primary Care (SWH) Limited	England	100%	-	Dormant
BHE Developments Limited (sold 12 September 2007)	England	-	70%	Property investment

21. Investment Property
Properties are stated at fair value, which has been determined based on valuations performed by Savills Commercial Limited as at 31 March 2008, on the basis of open market value, supported by market evidence, in accordance with international valuation standards.

		31/03/08	31/12/06
		£'000	£'000
Opening fair value of investment property		211,751	131,643
Acquisitions		22,639	22,272
Acquired as part of a business combination		-	16,462
Subsequent expenditure		5,315	2,435
Transfers from development property		46,277	24,251
Transfers from work in progress		18	186
Transfers to land & buildings		(13,635)	(2,539)
Unrealised profit on revaluation		8,880	17,041
Closing market value		281,245	211,751
Add minimum payment under finance leases		1,266	1,381
Closing fair value of investment property		282,511	213,132

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

22. Development Property

		31/03/08	31/12/06
		£'000	£'000
Opening balance		35,231	15,789
Development costs incurred in year		64,891	42,958
Capitalised interest		3,415	734
Transfer from work in progress		8	1
Transfers to investment property		(46,277)	(24,251)
Closing balance		57,268	35,231

23. Investments in Associates and Joint Ventures

The Group has the following investments in associates:

Associates

	Year	Shares held
Name of Company	Ended	by the Group
		2008	2006
Infracare (Midlands) Limited	30 September	257 Ordinary Shares of £1	240 Ordinary Shares of £1
GB Consortium 1 Limited	31 March	6,252 Ordinary Shares of £1	4,200 Ordinary Shares of £1
GB Consortium 2 Limited	31 March	2,322 Ordinary Shares of £1	27 Ordinary Shares of £1
GB Primary Care (Fourth Wave Bids) Limited	31 March	1 Ordinary Share of £1	1 Ordinary Share of £1
GB Primary Care Limited	31 March	8,500 Ordinary Shares of £1	-

	% held		Place of	Business
Name of Company			Incorporation	Activity
	2008	2006
Infracare (Midlands) Limited	43%	40%	England	Holds 60% of the share capital in the Dudley South LIFT Company
GB Consortium 1 Limited	40%	40%	England	Holds 60% of the share capital in the Barnet, Enfield and Haringey, and Liverpool and Sefton LIFT Companies
GB Consortium 2 Limited	45%	45%	England	Holds 60% of the share capital in the Coventry LIFT Company
GB Primary Care (Fourth Wave Bids) Limited	50%	50%	England	Fourth wave LIFT bidding vehicle and preferred bidder for SE Essex LIFT Company
GB Primary Care Limited	85%	50%	England	Holds 60% of the share capital in the South East Essex LIFT Company

The above investments comprise:

				31/03/08	31/12/06
				Group	Group
				£'000	£'000
Cost of shares				17	4
Loans				5,057	2,483
Share of accumulated profit/(loss)				3,670	(1,417)
				8,744	1,070

The above loans are unsecured, due after one year, and carry interest at 12-13%.

The following information is given in respect of the Group's share of all associates:

	31/03/08	31/12/06
	Group	Group
	£'000	£'000
Investment property	28,935	22,098
Current assets	6,042	8,006
	34,977	30,104
Liabilities due within one period	2,529	2,187
Liabilities due after one period	28,778	29,334
	31,307	31,521
Share of net assets/(liabilities)	3,670	(1,417)
Add back loans	5,057	2,483
Other	17	4
Carrying amount of associates	8,744	1,070
Share of associates revenue and profit:
Revenue	3,462	973
Profit/(loss)	5,087	(1,417)

The movement on investments in associates during the year was as follows:

	31/03/08	31/12/06
	Group	Group
	£'000	£'000
Opening balance	1,070	1,368
Acquired in period	3	-
Net loans advanced or transferred	2,574	1,119
Share of profit/(losses) for the period	5,087	(1,417)
Closing balance	8,744	1,070

Joint Ventures

The Group has the following investments in joint ventures:

	Year Ended	Shares held by the Group		% held
Name of Entity		2008	2006	2008	2006
Assura Blackpool LLP	31 March	n/a	n/a	50%	-
Assura Derwentside LLP	31 March	n/a	n/a	50%	-
Assura East Riding LLP	31 March	n/a	n/a	50%	50%
Assura Hampshire Health LLP	31 March	n/a	n/a	50%	-
Assura Leeds LLP	31 March	n/a	n/a	50%	-
Assura Liverpool LLP	31 March	n/a	n/a	50%	50%
Assura Macclesfield LLP	31 March	n/a	n/a	50%	50%
Assura Minerva LLP	31 March	n/a	n/a	50%	50%
Assura Vertis LLP	31 March	n/a	n/a	50%	-
Assura Wiltshire LLP	31 March	n/a	n/a	50%	-
Assura Wyre Forest LLP	31 March	n/a	n/a	50%	-
Peninsula Health LLP	31 March	n/a	n/a	50%	-
GP Care Pharmacy Limited	31 March	1 Ordinary Share of £1	-	50%	-

	Place of Incorporation	Business Activity
Name of Entity
Assura Blackpool LLP	England	Enhanced medical services
Assura Derwentside LLP	England	Enhanced medical services
Assura East Riding LLP	England	Enhanced medical services
Assura Hampshire Health LLP	England	Enhanced medical services
Assura Leeds LLP	England	Enhanced Medical services
Assura Liverpool LLP	England	Enhanced Medical services
Assura Macclesfield LLP	England	Enhanced Medical services
Assura Minerva LLP	England	Enhanced Medical services
Assura Vertis LLP	England	Enhanced medical services
Assura Wiltshire LLP	England	Enhanced medical services
Assura Wyre Forest LLP	England	Enhanced medical services
Peninsula Health LLP	England	Enhanced medical services
GP Care Pharmacy Limited	England	Pharmacy

In addition, the Group has an interest in Skeeles Pharmacy Limited and Douglas Skeeles Limited which are dormant, wholly-owned subsidiaries of GP Care Pharmacy Limited.

The above investments comprise:

			31/03/08	31/12/06
			Group	Group
			£'000	£'000
Cost of shares or member's core capital			1,868	906
Loans			7,339	-
Share of accumulated losses			(588)	(37)
			8,619	869

Members' capital is interest free. 

The following information is given in respect of the Group's share of all joint ventures:

	31/03/08	31/12/06
	Group	Group
	£'000	£'000
Non-current assets	3,399	-
Current assets	1,286	453
	4,685	453
Liabilities due within one year	1,449	490
Non-current liabilities	3,824	-
	5,273	490
Share of net liabilities	(588)	(37)
Add back loans	7,339	-
Other	1,868	906
Carrying amount of joint ventures	8,619	869
Share of joint ventures revenue and profit:
Revenue	39	-
Loss	(838)	(37)

The movement on investments in joint ventures during the year was as follows:

	31/03/08	31/12/06
	Group	Group
	£'000	£'000
Opening balance	869	-
Acquired in period	962	906
Net loans advanced or transferred	7,339	-
Share of losses in period	(551)	(37)
Closing balance	8,619	869

24. Intangible assets

	Goodwill	Pharmacy	Total
		licences
	31/03/08	31/03/08	31/03/08
	£'000	£'000	£'000
Cost
At 1 January 2007	36,714	284	36,998
Goodwill arising in the period as below	2,230	-	2,230
Pharmacy licence development and licences costs acquired during the period	-	6,573	6,573
At 31 March 2008	38,944	6,857	45,801
Impairment
At 1 January 2007	-	-
Impairment during the period	7,914	-	7,914
At 31 March 2008	7,914	-	7,914
Net book value at 31 March 2008	31,030	6,857	37,887

	Goodwill	Pharmacy	Total
		licences
	31/12/06	31/12/06	31/12/06
	£'000	£'000	£'000
Cost
At 1 January 2006	5,892	36	5,928
Goodwill arising in the year as below	30,822	-	30,822
Pharmacy licence development and licences costs acquired during the year	-	248	248
At 31 December 2006	36,714	284	36,998
Net book value at 31 December 2006	36,714	284	36,998

Pharmacy licences represent an ongoing open ended relationship with local PCTs to provide drugs and services on behalf of the NHS. They are therefore considered to have an infinite useful life.

2008 business combinations

During the period, the Group acquired four pharmacy branches through the acquisition of the entire share capital of Clearup Limited (29 March 2007), P&L Worsley Limited (14 May 2007) and Armside Chemists Limited (2 July 2007). Although the completion accounts are yet to be finalised for the acquisition of Armside Chemists Limited, it is estimated that the total consideration for the three acquisitions will be £4,058,000. In addition, five pharmacy licenses were acquired in asset deals for a total consideration of £3,505,000.

On 17 October 2007 the Group acquired the entire share capital of two diagnostic and equipment rental businesses, Urosonics Limited and Cystoscope Hire Limited for a consideration of £1,451,000 satisfied by the issue of 750,000 Ordinary Shares in the Company at market value.  

The net assets acquired, fair value of consideration paid and goodwill arising on these transactions are set out in the table below:

	Pharmacy acquisitions	Diagnostics acquisitions	Total
	£'000	£'000	£'000
Non current assets	210	52	262
Pharmacy licenses	2,901	-	2,901
Cash	737	10	747
Other Current Assets	235	16	251
Deferred tax	(812)	-	(812)
Net assets acquired at book value	3,271	78	3,349
Fair value adjustment	(10)	-	(10)
Net assets acquired at fair value	3,261	78	3,339
Fair value of shares in Assura Group Limited	-	1,451	1,451
Cash paid	4,002	-	4,002
Attributable costs	71	45	116
Total consideration	4,073	1,496	5,569
Goodwill arising on acquisition	812	1,418	2,230

Included in the £2,230,000 of goodwill recognised above are certain assets that cannot be individually separated and reliably measured due to their nature. These items include the exported value of future earnings, synergies and staff in place.

During the current period the Group terminated its management contract for The Westbury Property Fund Limited (see note 12). As a result goodwill relating to the acquisition of Assura Administration and related parties in the prior year has been impaired in the period. This is shown in the eliminations and unallocated segment.

From the date of acquisition to 31 March 2008, the acquired businesses have contributed £11,000 of losses to the results of the Group. If the combination had taken place at the beginning of the year, the consolidated profit of the Group would have been £14,595,000 and revenue would have been £45,689,000.

2006 Business Combinations

On 6 February 2006 the Group acquired, for cash, the entire share capital of PCI Management Limited, an intermediate holding company and its subsidiary, Primary Care Initiatives (Macclesfield) Limited.

On 15 May 2006 the Group acquired the entire share capital of Assura Administration Limited (formerly Berrington Fund Management Limited) and related parties, Assura Investments Limited (formerly) Strategis Limited and Assura Services Limited (formerly Tarncourt Limited) and the Member's capital of Assura Fund Management LLP (formerly Berrington Fund Management LLP). The consideration for the acquisition was £11,484,000 paid in cash plus the issue of 16,826,359 ordinary shares to the vendors.

On 1 June 2006 the Group contracted to acquire the 30% of Assura LIFT Holdings Limited not then owned by the Group. The consideration for the acquisition was met by the issue of 1,322,476 ordinary shares to the vendors on completion. Included in the 30% stake being acquired were 11,093 shares of 0.1p each in Assura LIFT Holdings Limited which were held by R Pesskin, representing 7.8% of the share capital in that Company. The Group has consolidated 100% of the Company as the 11,093 shares were subject to a put and call option committing the Group to the acquisition of those shares. The put option was exercised in the period. The consideration for these shares in Assura LIFT Holdings Limited comprised the issue of a further 464,666 Ordinary shares in the Company, the cost of which had been provided for in a deferred consideration reserve.

On 5 October 2006 the Group acquired the entire share capital of Assura Intelligence Limited (formerly Stream Partners Limited) for £299,000 paid in cash. The acquisition of Assura Intelligence Limited is subject to conditional deferred consideration, payable in 2009, of shares in Assura Group. The number of shares to be issued to the vendors being the number of patients processed by Assura Intelligence Limited's data processing service in the calendar year 2008 divided by 1.7 and subject to a maximum of 441,176 shares being granted, the cost of which is being expensed on a time apportioned basis with the credit being added to retained earnings.

The net assets acquired, fair value of consideration paid and goodwill arising on these transactions are set out in the table below.

	Assura Administration and related parties	PCI Management Limited and subsidiary	Assura LIFT Holdings Limited	Stream Partners Limited	Total
	£'000	£'000	£'000	£'000	£'000
Investment Property	-	13,903	-	-	13,903
Property, plant and equipment	1,533	-	-	-	1,533
Cash	1,440	1,945	18	30	3,433
Other Current Assets/(Liabilities)	(235)	(547)	(139)	19	(902)
Bank loan - Long term	-	(11,896)	-	-	(11,896)
Bank loan - Current portion	-	(604)	-	-	(604)
Other long-term liabilities	-	-	(490)	-	(490)
Net Assets Acquired at book value	2,738	2,801	(611)	49	4,977
Fair value of performance fee entitlement	11,490	-	-	-	11,490
Net Assets Acquired at fair value	14,228	2,801	(611)	49	16,467
Fair Value of shares in Assura Group Limited	28,605	-	2,248	-	30,853
Cash paid	11,483	2,486	-	300	14,269
Deferred consideration	-	-	790	-	790
Attributable costs	953	315	69	40	1,377
Total consideration	41,041	2,801	3,107	340	47,289
Goodwill arising on acquisition	26,813	-	3,718	291	30,822

Included in the £30,822,000 recognised above are certain intangible assets that cannot be individually separated and reliably measured and reliably measured due to their nature. These terms include customer contracts, synergies and staff in place.

From the date of acquisition to 31 December 2006, the acquired businesses contributed £216,000 to the profit of the Group. If the combination had taken place at the beginning of the prior year, the consolidated profit of the Group would have been £17,603,000.

Impairment of goodwill

The Company tests annually whether goodwill or pharmacy licenses have suffered any impairment. 

Goodwill acquired through business combinations and licences have been allocated for impairment testing purposes to four cash generating units as follows:

	Goodwill		Pharmacy licences
	31/03/08	31/12/06	31/03/08	31/12/06
Property development cash generating unit	24,791	32,705	-	-
LIFT cash generating unit	3,718	3,718	-	-
Pharmacy cash generating unit	812	-	6,857	284
Medical cash generating unit	1,709	291	-	-
	31,030	36,714	6,857	284

These represent the lowest level within the Group at which goodwill is monitored for internal management purposes.

Property development cash generating unit

The recoverable amount of the property development unit has been determined based on a value in use calculation according to a budget approved by the Board covering a four year period. The discount rate applied to cash flow projections is 8.5% (2006: 8.5%) and cash flows beyond the four year forecasts are extrapolated using a 5% growth rate (2006: 5%) based on management's experience and conservative expectations.

LIFT cash generating unit;

The recoverable amount of the LIFT unit has been determined based on a value in use calculation according to financial models approved by LIFT company shareholders covering a 25 year period. The discount rate applied to cash flow projections is 8.5% (2006: 8.5%). The forecast cash flows include the project returns on funding loans provided by Assura LIFT Holdings Limited based on the actual interest rate of 14% (2006: 14%), the estimated residual value at the end of the primary lease period and the pipeline of projects.

Pharmacy cash generating unit;

The recoverable amount of the pharmacy unit has been determined based on a value in use calculation based on budgets approved by the Board covering a five year period. The discount rate applied to cash flow projections is 8.5% and cash flows beyond the five year forecasts are extrapolated using a 4% growth rate based on management's experience.

Medical cash generating unit;

The recoverable amount of the medical unit has been determined based on a value in use calculation based on budgets approved by the Board covering a five year period. The discount rate applied to cash flow projections is 8.5% and cash flows beyond the five year forecasts are extrapolated using a 15% growth rate reducing to 5%.

25. Property, Plant and Equipment

		Computer,	Fixtures,
	Land and buildings	medical and other equipment	fittings and furniture	Total
	31/03/08	31/03/08	31/03/08	31/03/08
	£'000	£'000	£'000	£'000
Cost
At 1 January	2,645	1,505	2,164	6,314
At acquisition	210	52	-	262
Transfer from investment property	13,635	-	-	13,635
Additions at cost	-	1,279	1,392	2,671
Disposals at cost	-	(294)	-	(294)
Revaluation	2,519	-	-	2,519
At 31 March	19,009	2,542	3,556	25,107
Depreciation
At 1 January	-	174	167	341
Depreciation for the year	-	710	410	1,120
Disposals	-	(221)	-	(221)
At 31 March	-	663	577	1,240
Net book value at 31 March 2008	19,009	1,879	2,979	23,867
		Computer,	Fixtures,
	Land and buildings	medical and other equipment	fittings and furniture	Total
	31/12/06	31/12/06	31/12/06	31/12/06
	£'000	£'000	£'000	£'000
Cost
At 1 January	-	11	63	74
At acquisition	-	95	2	97
Transfer from investment property	2,539	-	-	2,539
Additions at cost	-	1,399	2,099	3,498
Revaluation	106	-	-	106
At 31 December	2,645	1,505	2,164	6,314
Depreciation
At 1 January	-	2	36	38
Depreciation for the year	-	172	131	303
At 31 December	-	174	167	341
Net book value at 31 December 2006	2,645	1,331	1,997	5,973

Land and buildings are stated at fair value which has been determined based on valuations performed by Savills Commercial Limited as at 31 March 2008, on the basis of open market value, supported by market evidence, in accordance with international valuation standards. The previous valuation was carried out by Savills Commercial Limited on the same basis as at 31 December 2006. If the land and buildings were measured using the cost model, the carrying amounts would be as follows:

	31/03/08	31/12/06
	£'000	£'000
Cost and net book value	16,384	2,539

26. Other investment

	31/03/08	31/12/06
Available for-sale financial assets	9,047	250
Listed equity shares	8,297	-
Unlisted equity shares	750	250
	9,047	250

The Group owns 6,382,474 Ordinary Shares of 10p each in Stobart Group Limited which are listed on the London Stock Exchange, valued at closing price.

27. Cash and cash equivalents

		31/03/08	31/12/06
		£'000	£'000
Petty cash		1	8
Cash held in current account		20,093	18,468
Cash held to bank's order		360	360
Rent held on deposit		6	6
		20,460	18,842

Cash is held to the bank's order as security for letters of credit issued by the bank to the debt funders for the three LIFTCos to which the Group has pledged funding upon practical completion of the medical centres under development. 

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

28. Debtors
		31/03/08	31/12/06
		£'000	£'000
Trade debtors		4,144	6,182
VAT recoverable		2,240	1,105
Prepayments & accrued income		3,600	1,526
Other debtors		4,284	1,079
		14,268	9,892

The Group has entered into commercial property leases on its investment property portfolio. These non cancellable leases have remaining terms of up to 25 years with an average lease length of 18 years. All leases are subject to revision of rents according to various rent review clauses. Future minimum rentals receivable under non cancellable operating leases as at 31 March are as follows:

	31/03/08	31/12/06
	£’000	£’000
Within one year	16,615	12,354
After one year but not more than five years	65,709	48,560
More than five years	228,981	176,382
	311,305	237,296

Trade debtors are generally on 30-60 days' terms and are shown net of a provision for impairment. As at 31 March 2008, no trade debtors were impaired or fully provided for (2006: Nil). 

As at 31 March 2008 and 31 December 2006, the analysis of trade debtors that were past due but not impaired is as follows:

			Past due but not impaired
	Total	Neither past due nor impaired	>30 days	>60 days	>90 days	>120 days
	£'000	£'000	£'000	£'000	£'000	£'000
2008	4,144	3,171	435	131	173	234
2006	6,182	4,005	940	308	116	813

The credit quality of trade debtors that are neither past due nor impaired is assessed by reference to internal historical information relating to counterparty default rates.

29. Bank overdraft		31/03/08	31/12/06
		£'000	£'000
Bank overdraft		-	2,135

Assura Pharmacy Limited had a £5m overdraft arrangement with National Australia Bank Limited as part of the £100m loan facility agreement on which interest was charged at base rate plus a margin of 1%. The overdraft was repaid in March 2008.

30. Creditors		31/03/08	31/12/06
		£'000	£'000
Trade creditors		6,133	4,273
Other creditors and accruals		5,761	4,747
Payments due under finance leases		94	92
Loan (see note 31)		561	604
Interest payable and similar charges		96	124
Rents received in advance		3,473	2,552
		16,118	12,392

The total of future minimum lease payments payable under non-cancellable finance leases is shown below:

		31/03/08	31/12/06
		£’000	£’000
Within one year		94	92
After one year but not more than five years		394	384
More than five years		778	905
		1,266	1,381

The above finance lease arrangements are in respect of investment property held by the Group on leasehold rather than freehold terms.  The amounts due above that are more than one year, which total £1,172,000 (2006: £1,289,000) have been disclosed in non-current liabilities on the consolidated balance sheet.

31. Long-term Loan
		31/03/08	31/12/06
		£'000	£'000
At 1 January		44,949	24,930
Amount drawn down in year		298,420	72,000
Acquired on acquisition of PCI Management Limited		-	11,896
Amount repaid in year		(154,258)	(64,000)
Loan issue costs		(1,355)	(123)
Amortisation of loan issue costs		663	246
At 31 March (31 December 2006)		188,419	44,949

The Group had a loan agreement with National Australia Bank Limited for £95,000,000 as part of a £100,000,000 loan facility and a £12,500,000 loan facility with The General Practice Finance Corporation (GPFC) Limited. The National Australia Bank Limited loan was repaid in March 2008.

The GPFC loan is due for repayment by quarterly instalments with the balance of £6,000,000 due on 28 May 2031. £113,000 is due within a year (see note 30).

These loans are secured by way of a debenture over the wholly owned property assets of the Group and a fixed charge over shares held in certain subsidiary companies.

During the period, the loan facility with National Australia Bank Limited was subject to the following financial covenants:

(i) Loan to value ratio - the aggregate outstanding loan to current valuation of investment properties should not exceed 75%.

(ii) Projected net rental income receivable during the following 12 month period must cover 130% of projected finance costs.

(iii) Financial indebtedness must be below 65% of gross asset value.

(iv) Average weighted lease length must exceed 12.5 years.

The Group has been in compliance with the financial covenants throughout the period since issue.

Interest was charged at a rate of 0.65% above the swap rate on the £95m loan facility with National Australia Bank Limited and is charged at a rate of 6.45% on the £12.5m loan facility with The General Practice Finance Corporation Limited.

Two new loan facilities were entered into in March 2008:

 

a)       a loan of £8.25m secured on the Company’s office investment property in Daresbury (part of which will be occupied by the Company). This loan, which is available for five years, carries interest at 1.2% above LIBOR. Surplus rental income from the property is used to amortise the loan. An interest rate swap at a rate of 5.1% has been taken out to hedge against the interest on the loan. £448,000 is due within one year (see note 30).

b)       a new £250m facility utilising National Australia Bank’s securitisation conduit and secured upon many of the Group’s portfolio of medical centre investment properties. The margin on this facility is 0.45% above the asset backed Commercial Paper rate. The bank also provides a liquidity facility of £255m, the margin of which varies between 0.7% and 1.1% above LIBOR, to guarantee funding in the event that Commercial Paper cannot be issued. This facility is subject to the following financial covenants:

(i) Loan to value ratio - the aggregate outstanding loan to current valuation of investment properties should not exceed 75%.

(ii) Projected net rental income receivable during the following 12 month period must cover 130% of projected finance costs.

(iii) Financial indebtedness must be below 65% of gross asset value.

(iv) Average weighted lease length must exceed 12.5 years.

32. Share capital
	31/03/08	31/03/08	31/12/06	31/12/06
Authorised		£'000		£'000
Ordinary Shares of 10p each	300,000,000	30,000	300,000,000	30,000
Preference Shares of 10p each	20,000,000	2,000	20,000,000	2,000
		32,000		32,000

	Number of Shares	Share Capital	Number of Shares	Share Capital
	31/03/08	31/03/08	31/12/06	31/12/06
Ordinary Shares issued and fully paid		£'000		£'000
Opening balance	233,998,471	23,400	142,403,847	14,240
Issued on 14 September 2007 to settle the deferred consideration from 2006 on the acquisition of Assura LIFT Holdings Limited	464,644	47	-	-
Issued on 12 October 2007 to acquire Urosonics Limited and Cystoscope Hire Limited	750,000	75	-	-
Issued for cash on 15 May 2006	-	-	64,729,021	6,473
Issued on 15 May 2006 in exchange for shares in Assura Administration Limited (formerly Berrington Fund Management Limited) and related parties	-	-	16,826,359	1,683
Issued on 15 May 2006 for services provided by Pharma-e Limited	-	-	650,000	65
Issued on 1 June 2006 to acquire minority interest in Assura LIFT Holdings Limited (formerly BHE Holdings Limited)	-	-	1,322,476	132
Issued to the Assura Executive Incentive Plan	-	-	8,066,768	807
Total issued in period	1,214,644	122	91,594,624	9,160
Closing balance	235,213,115	23,522	233,998,471	23,400
Own shares held	(10,331,474)	(1,033)	(8,066,768)	(807)
Total Share Capital	224,881,641	22,489	225,931,703	22,593

Voting rights

Ordinary shareholders are entitled to vote at all general meetings. 

During the period the Assura Group Employee Benefit Trust acquired 2,264,706 shares at a cost of £3,754,000.

On 15 May 2006 the Company formed the Assura Executive Equity Incentive Plan (EEIP) and issued and transferred 8,066,768 ordinary shares into the plan. Participants will be allocated units each of which represent one Ordinary Share, 68.5% of which was scheduled to vest on 31 December 2008 and the balance on 31 December 2010. These dates were varied in the period and are now 31 March 2009 and 31 March 2011 respectively. The units will vest at the end of the vesting periods if the compound growth in total shareholder return in each period is 12.5% above a base reference price of £1.90. A sliding scale will apply if the total shareholder return is between 0% and 12.5% over the base reference price. Upon vesting, an appropriate number of Ordinary Shares will be transferred by the trustees of the plan to participants less a deduction for the number of shares needed to recover any tax or national insurance liabilities which arise for participants.

During the period 2,513,500 (2006: 3,130,000) units were granted to participants which vest on 31 March 2009.

The fair value of equity settled share options is estimated as at the date of grant using a Monte-Carlo model, taking into account the terms and conditions upon which options were granted. The fair value of the units granted in the period, is £3,091,000 (2006: £6,554,000) based on market price at the date the shares were granted. This cost is allocated over the vesting period. Given that the Company's share price at the date of this report is substantially below the base preference price, the cumulative expense has been computed by preference to the second vesting date given the likelihood of the units being granted at the first vesting date. The cost allocation for the period was £1,578,000 (2006: £1,279,000), 2006 included 500,000 units issued to the Chairman (see notes 3 and 4). Dividends are paid to, and accumulate in, the Assura EEIP. 

On 5 October 2006 the Group acquired the entire share capital of Assura Intelligence Limited for cash and conditional deferred consideration payable in 2009, in shares in Assura Group. The number of shares to be issued to the vendors is subject to a maximum of 441,176, the cost of which is being expensed on a time apportioned basis with the credit being added to retained earnings. The cost incurred in the period was £365,000 (2006: £91,000).

On 1 June 2006, the Group acquired 30% of Assura LIFT Holdings Limited. The consideration included the issue of a further 464,666 Ordinary Shares in Assura Group Limited, the cost of which was provided for in a deferred consideration reserve.

These shares were issued in the period and the deferred consideration reserve released. 650,000 Ordinary Shares were issued on 15 May 2006 to Pharma-e Limited to compensate for consultancy services provided to the Group described in note 11.

33. Share premium
		31/03/08	31/12/06
		£'000	£'000
Opening balance		226,678	122,239
Proceeds arising on issue of Ordinary Shares		2,073	129,439
Transfer to distributable reserve		(226,678)	(25,000)
Closing balance		2,073	226,678

On 2 June 2006, following both shareholders' approval and that of the Royal Court in Guernsey, £25,000,000 of share premium was transferred to distributable reserve. On 29 June 2007 a further £226,678,000 was similarly transferred.

34. Distributable reserve
		31/03/08	31/12/06
		£’000	£’000
At 1 January		15,564	-
Transfer from share premium (see note 33)		226,678	25,000
Dividends on Ordinary Shares (see note 18)		(18,126)	(9,436)
		224,116	15,564
35. Retained earnings
		31/03/08	31/12/06
		£’000	£’000
Opening balance		1,852	(18,328)
Profit for the period attributable to equity holders		14,070	18,901
Cost of employee share-based incentives		1,578	1,279
Minority interest disposed of in the period		(299)	-
Closing balance		17,201	1,852
36. Revaluation reserve
		31/03/08	31/12/06
		£’000	£’000
Opening balance		106	-
Revaluation of land & buildings in the year		2,983	106
Closing balance		3,089	106

37. Deferred consideration reserve

	31/03/08	31/12/06
	£’000	£’000
Opening balance	790	-
Deferred share-based consideration arising in year	-	790
Deferred share-based consideration paid in the period	(790)	-
Closing balance	-	790

At 1 June 2006, the Group acquired 30% of Assura LIFT Holdings Limited. The consideration included the issue of a further 464,666 Ordinary shares in Assura Group Limited at a future date no later than 31 December 2009, the cost of which was provided for in the deferred consideration reserve.  The shares were issued in the period and the deferred consideration reserve was eliminated as a result.

38. Net asset value per Ordinary Share

The basic net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £265,383,000 (2006: £267,500,000) on 227,146,347 (2006: 225,932,000) Ordinary Shares in issue at the balance sheet date. 

The adjusted basic net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £269,944,000 (2006: £268,307,000) which is after adding back the 'own shares held' reserve of £4,561,000 (2006: £807,000) and on 227,146,347 (2006: 225,932,000) Ordinary Shares in issue at the balance sheet date. 

The diluted net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £265,383,000 (2006: £267,500,000) and on 228,628,438 (2006: 233,998,000) Ordinary Shares in issue at the balance sheet date. 

The diluted net asset value per Ordinary Share is based on the net assets attributable to the ordinary shareholders of £269,944,000 (2006: £268,307,000) which is after adding back the 'own shares held' reserve of £4,561,000 (2006: £807,000) and on 228,628,438 (2006: 233,998,000) Ordinary Shares in issue at the balance sheet date.

39. Note to the Consolidated Cash Flow Statement
		2008	2006
		£'000	£'000
Reconciliation of net profit before taxation to net cash inflow from operating activities:
Net profit before taxation		12,794	18,469
Taxation		1,005	(40)
Adjustment for non-cash items:
Depreciation		1,120	303
Increase in debtors		(4,376)	(6,354)
Increase in creditors		3,704	8,559
Increase in pharmacy inventories		(776)	(567)
Surplus on revaluation of investment property		(8,880)	(17,041)
Deficit on revaluation of property, plant and equipment		464	-
Deficit on revaluation of other investments		989	-
Termination of investment management services		(1,134)	-
Interest capitalised on developments		(3,415)	-
Profit on revaluation of financial instrument		(3,660)	(5,674)
Movement in performance fee provision		-	(1,010)
Share-based pharmacy establishment cost		-	1,105
Share of (profits)/losses of associates and joint ventures		(4,536)	1,454
Cost of employee share-based incentives		1,704	1,279
Other gains and losses		(2,088)	(580)
Amortisation of loan issue costs		663	246
Net cash (outflow)/inflow from operating activities		(6,422)	149

40. Deferred tax

Deferred tax consists of the following:

Deferred income tax liabilities/(assets) recognised in the financial statements
	Consolidated balance sheet		Consolidated income statement
	31/03/2008	31/12/2006	15 months ended 31/03/2008	12 months ended 31/12/2006
	£’000	£’000	£’000	£’000
Decelerated allowances on premises, plant and equipment	43	-	43	-
Pharmacy licenses recognised on acquisition	(812)	-	-	-
Trading losses carried forward	962	-	962	-
	193	-	1,005	-

Deferred income tax liabilities/(assets) not recognised in the financial statements
	Consolidated balance statement
	31/03/2008	31/12/2006
	£’000	£’000
Tax losses	105	739
Decelerated allowances on premises	65	176
Deficit on revaluation of investment properties in the UK	3,640	-
	3,810	915

41. Financial instruments

The Group holds cash and liquid resources as well as having debtors and creditors that arise directly from its operations. The Group has entered into an interest rate swap during the year as disclosed in note 13.

The main risks arising from the Group's financial instruments and properties are credit risk, liquidity risk, interest rate risk and equity price risk. The Board regularly reviews and agrees policies for managing each of these risks and these are summarised below.

Credit risk

Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Group. In the event of a default by an occupational tenant, the Group will suffer a rental income shortfall and incur additional costs, including legal expenses, in maintaining, insuring and re-letting the property. 

Given the enhanced rights of landlords who can issue proceedings and enforcement by bailiffs, defaults are rare and potential defaults are managed carefully by the credit control department. The maximum credit exposure in aggregate is one quarter's rent of circa £5m, however this amount derives from all the tenants in the portfolio and such a scenario is hypothetical. The Group's credit risk is well spread across circa 147 tenants at any one time.

There are no significant concentrations of credit risk within the Group. The maximum credit risk exposure relating to financial assets is represented by carrying value as at the balance sheet date. 

Liquidity risk

Liquidity risk is the risk that the Group will encounter in realising assets or otherwise raising funds to meet financial commitments. Investments in property are relatively illiquid, however, the Group has tried to mitigate this risk by investing in desirable properties which are well let to GPs and PCTs. In order to progress its property investment and development programme, the Group needs access to bank and equity finance, both of which may be difficult to raise notwithstanding the quality, long lease length, NHS backing and diversity of its property portfolio.

The Group finances its activities with a combination of bank loans, cash and short-term deposits. Overdrafts are used to satisfy short-term cash flow requirements. Other financial assets and liabilities, such as trade debtors and trade creditors, arise directly from the Group's operating activities. The Group also enters into derivative transactions, principally interest rate swaps with the purpose of managing the interest rate risks arising from the Group's operations and its sources of finance.

The table below summarises the maturity profile of the Group's financial liabilities at 31 March 2008 and 31 December 2006 based on contractual undiscounted payments. 

		On		Less than		3 to 12		1 to 5
Year ended 31 March 2008		demand		3 months		months		years		>5 years		Total
		£'000		£'000		£'000		£'000		£'000		£'000
Interest bearing loans and borrowings		-		138		423		171,427		16,992		188,980
Trade and other payables		-		15,846		71		394		778		16,729
		-		15,624		494		171,821		17,770		205,709
	On		Less than		3 to 12		1 to 5
Year ended 31 December 2006	demand		3 months		months		years		>5 years		Total
	£'000		£'000		£'000		£'000		£'000		£'000
Interest bearing loans and borrowings	2,135		25		579		33,551		11,398		47,688
Trade and other payables	-		11,719		69		384		905		13,077
	2,135		11,744		648		33,935		12,303		60,765

Interest rate risk

The Group's exposure to market risk for changes in interest rates relates primarily to the Group's cash deposits and, as debt is utilised, long term debt obligations. The Group's policy is to manage its interest cost using interest rate swaps (see note 13). The swap itself is revalued to its market value by reference to market interest rates at each balance sheet date.

The interest rate profile of the financial assets and liabilities of the Group at 31 March 2008 was as follows:

	Within 1 year	1-5 years	More than 5 years	Total
	£'000	£'000	£'000	£'000
Floating rate
Cash	20,460	-	-	20,460

	Within 1 year	1-5 years	More than 5 years	Total
	£'000	£'000	£'000	£'000
Fixed rate
Interest rate swap	-	-	5,862	5,862
Long-term loans:
NAB	-	(168,917)	-	(168,917)
GPFC	(113)	(531)	(11,225)	(11,869)
RBS	(448)	(2,035)	(5,711)	(8,194)
Payments due under finance leases	(94)	(394)	(778)	(1,266)

The NAB long-term loan is a £250m National Australia Bank sponsored securitisation conduit available for five years from March 2008. The facility is backed up by a 364 day £255m liquidity facility for use when Commercial Paper cannot be issued by the conduit. The maturity of any draw downs under the liquidity facility is up to a maximum of three months.

The interest rate profile of the financial assets and liabilities of the Group at 31 December 2006 was as  

follows:

	Within 1 year	1-5 years	More than 5 years	Total
	£'000	£'000	£'000	£'000
Floating rate
Cash	18,842	-	-	18,842

	Within 1 year	1-5 years	More than 5 years	Total
	£'000	£'000	£'000	£'000
Fixed rate
Interest rate swap	-	-	2,202	2,202
Bank overdraft	(2,135)	-	-	(2,135)
Long term loans:
NAB	-	(33,053)	-	(32,053)
GPFC	(604)	(490)	(11,406)	(12,500)
Payments due under finance leases	(92)	(384)	(905)	(1,381)

The NAB long-term loan was part of a £100m National Australia Bank loan facility which was due for repayment in July 2008. The loan was repaid in March 2008.

The interest rate swap contract is adjusted to fair value at each balance sheet date. For the other financial assets and liabilities, their book value equates to their fair value, hence the above figures, for both 2008 and 2006 comprise both book and fair values.

	Book value		Fair value
	2008	2006	2008	2006
	£'000	£'000	£'000	£'000
Cash	20,460	18,842	20,460	18,842
Interest rate swap	5,862	2,202	5,862	2,202
Bank overdraft	-	(2,135)	-	(2,135)
Long term loan	(188,980)	(44,553)	(188,980)	(44,553)
Payments due under finance leases	(1,266)	(1,381)	(1,266)	(1,381)

On 2 November 2006 the company increased its interest rate swap from £100m at 31 December 2006 to £150m at 30 June 2007 and £200m at 31 December 2007, all fixed until 31 December 2027 at a rate of 4.59%. The interest rate swap was revalued to its fair value of £5,861,000 at 31 March 2008 compared with a value of £2,202,000 at 31 December 2006 leading to a valuation gain in the year of £3,660,000 (2006 - £5,675,000) see note 13.

The interest rate swap is intended to protect the Group against fluctuations in interest rates given that the group's bank loan is at floating rate. The interest rate swap is measured against the three month LIBOR. Interest charged on the Group's £250m facility entered into in March 2008 (see note 31) is that applicable to asset backed Commercial Paper. The Group is therefore exposed to any differential between that rate and the three month LIBOR.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group's profit before tax.

	Increase/ decrease in basis points	Effect on profit before tax  £'000
2008	+75	(763)
	-75	763
2006	+50	(84)
	-50	84

Equity price risk

The Group holds listed equity investments classified as available-for-sale. The Group's listed equity investments consist of 6,382,474 Ordinary Shares of 10p each in Stobart Group Limited (see note 26). The fair value, being market value, of the investment is therefore subject to variations in the equity share price.

The analysis below reflects the effect on the Group's investment given an increase or decrease of 5% in the equity share price.

	Increase/ decrease in equity share price	Effect on book value
	%	£'000
2008	+5%	415
	-5%	(415)
2006	-	-
	-	-

Capital risk

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. 

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the period end 31 March 2008 and year end 31 December 2006. 

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group's policy is to keep the gearing at a reliable level for a strongly asset-backed operating business. In order to achieve this it must have access to share capital when appropriate otherwise it may need to sell property and other assets. The Group includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations. Capital includes convertible preference shares, equity attributable to the equity holders of the parent less the net unrealised gains reserve.

42. Commitments

At the year end the Group had a property investment and development pipeline amounting to a further £202,000,000 (2006: £150,224,000). The bulk of this expenditure is however discretionary and the amount of contracted expenditure was £42,000,000 (2006: £28,000,000).

The Company has given guarantees in favour of the GPFC amounting to £360,000 (2006: £360,000) to secure future LIFT investments by the Group.

43. Related parties

During the period certain costs, amounting to £211,000 (2006: £200,000) in total, relating to Assura Pharmacy Limited were incurred and recharged by Pharma-e Limited, a company in which John Curran, a former director of Assura Pharmacy Limited (resigned 23 March 2007), is a Director and shareholder and Andrew Murray is an employee. Transactions between Assura Pharmacy Limited and Pharma-e Limited are made at normal market prices. Invoices are payable upon presentation. A balance of £11,701 was outstanding at the year end which related to services for April 2008.

During the period Assura Pharmacy Limited transferred one of its branches to GP Care Pharmacy Limited, a joint venture vehicle in which it holds a 50% interest for £550,000. Assura Pharmacy Limited made loans to GP Care Pharmacy Limited. The loans, which totalled £7,028,200 as at 31 March 2008, are secured on the assets of GP Care Pharmacy Limited. Interest chargeable on the loans in the period was £11,000.

44. Events after the balance sheet date

At an Extraordinary General Meeting held on 3 April, Shareholders approved the change in status of the Company from Chapter 15 (investment) to Chapter 6 (trading) and the Group's management and control was moved to the UK immediately thereafter to reflect the change in nature of business of the Group.

 

END

 

 

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