Interim Management Statement

RNS Number : 7223A

Assura Group Limited

06 August 2008

 



For Immediate release

6 August 2008

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

First Quarter Trading Statement

Strong progress being made as 

NHS marketplace continues to open to private providers

Assura is one of the leading healthcare companies in the UK, partnering with GPs to deliver high quality patient care in the community. The Company is today publishing the following Interim Management Statement ahead of its Annual General Meeting which will be held at 9am this morning.

Chief Executive, Richard Burrell commented:

'We are pleased with the progress the Company has made since the beginning of the financial year. The opening up of the NHS marketplace to private providers is presenting the Company with significant opportunities to create value for its shareholders.  

The Department of Health's vision for primary care, as outlined in Lord Darzi's Review published on 30 June 2008, fully endorses our strategy to support our joint venture GPCos to become highly effective provider organisations of out-patient and diagnostic services in the community. We are delighted with recent announcements from the Department of Health indicating that the market will be opened up faster and wider and that a level playing field will become established policy, backed up by new regulatory bodies such as the Cooperation and Competition Panel.

Current Trading

There have been no significant changes to the financial position of the Company since the publication of the Final Results on 25 June 2008.

On a Group consolidated basis, current trading for the first quarter of this year is in line with the budgeted Group trading loss for the full year. As we continue to invest in the business, performance is in line with the Board's expectations.  

Strong Progress in Medical

As at 1 August 2008, the Company's GPCos had 22 medical services commissioned and a further 5 services scheduled to be commissioned by the end of August.  This is an increase from the 15 services which were in place on 1 June 2008.  In addition there is a pipeline of a further 70 services awaiting accreditation or tender outcomes.  Although revenues from commissioned services are currently modest, the Company is confident that the wide variety of services being provided will establish each of its GPCos as highly credible local provider organisations and lead to significant future revenue growth.

Pharmacy

As at 1 August 2008, the pharmacy division had 34 pharmacies trading (including 7 pharmacies which form part of the joint venture with GP Care in the Bristol area) and a further 11 licences granted for new pharmacies to open.  Turnover in the wholly owned pharmacies is up 94% compared to the same quarter last year (Apr-Jun). 

During the first quarter, the Company chose not to proceed with two planned pharmacy acquisitions due to issues that arose during due diligence.  This will reduce budgeted turnover for the year by circa £6m. In common with other pharmacy operators, trading has been affected during the first quarter by delays in PCT commissioning of additional enhanced services and lower than expected average item values due to Category 'M' pricing for certain pharmaceutical products. Despite the impact of the Category 'M' pricing regime, we remain confident that average gross margin for the full year will remain in excess of 26%.

Property Investment and Development

In line with the re-positioning of the Company to concentrate its resources on its GPCos, the Company has reduced its expenditure on property and is focused on committing new capital expenditure to property developments which are located inside its existing or potential GPCo areas.  

The Company continues to remain encouraged by the progress of its individual rent reviews.  10 reviews were settled during Q1 showing an average annual increase of 4.6%. This was significantly ahead of management expectations and the Company continues to benefit from the strength of the portfolio and the quality of its covenants.

Announcement of Interim Results

The Company will report its 2008/09 Interim Results and Q2 Trading Update on 20 November 2008.'

Ends.

Enquiries:

Richard Burrell/Louise Bathersby: Assura Group, 020 7107 3800

David Yates / Ben Atwell: Financial Dynamics, 020 7831 3113

 

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