Pre-Close Trading Update

RNS Number : 5918K

Assura Group Limited

22 April 2010

 



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

Pre-Close Trading Update

Assura Group Limited (LSE: AGR), today provides an update on trading for the year ended 31 March 2010, prior to entering its close period. The Company expects to announce its final results in late June 2010.

Financial Results

Following the sale of 75.1% of its Medical Services business to Virgin Healthcare Holdings Limited on 2 March 2010, the Company is now focused on its profitable Property, Pharmacy and LIFT businesses.

The Company expects to report that sales and operating profit in all its divisions have been ahead of budget. There will be an overall loss for the year arising from discontinued operations, the loss on sale of the Medical Services division and the restructuring costs incurred in order to reduce the Company's cost base to a level appropriate for the remaining business.

Property Portfolio

Since 1 April 2009 the Company has settled 68 rent reviews producing an aggregate annualised increase in rent of 3.5%, which equates to an increase in rent receivable of £560,000 per annum.

The Company is working towards finalising its year end property valuation and expects to see a small reduction in yields and resulting increase in portfolio value in line with other companies in the sector. For the period under review this increase is likely to be offset by the impact of cancelling a small number of leases associated with closing the company's 'Health and Wellness Centres' where the Medical Services division was the main tenant.

The Company's development pipeline remains strong with 5 developments on site and 2 further developments planned to start in the first half of the year.

Pharmacy Business

The Company's pharmacy business continues to perform well, with revenue from wholly-owned pharmacies likely to exceed £30m (2009: £26.7m). The Company now operates 33 pharmacies of which 26 are wholly-owned and 7 are operated through GP Care Pharmacy Limited, a joint venture with a network of GP practices in the South West area. The Company expects that gross margin for the period will have been maintained at close to 30% (2009: 30%) and that the pharmacy division will be profitable after all costs, including pharmacy head office costs, have been accounted for.

LIFT Business

The value of the Company's investments in 6 Local Improvement Finance Trusts ("LIFTs") is expected to increase due to gains in value in their underlying medical centre property investments. A further LIFT scheme in Coventry reached financial close on 20 April 2010.

Restructuring and Head Office Costs

With the sale of the Medical Services business and the resultant restructuring of the remaining businesses now complete the Company has been able to reduce its Head Office costs significantly.

The Directors believe that the costs associated with Company's Property operations now compare very favourably to the property and fund management costs incurred by its peers.

More details on the Company's restructuring and reduced cost base will be provided at the time of announcing the Final Results.

Bank Facilities

The Company's bank facility of £190m with National Australia Bank required a repayment of £30m to be made by 31 March 2010 and a further £30m to be repaid by 31 March 2011. The Company has repaid £55m to National Australia Bank in the last six months through refinancing and intends to repay the outstanding £5m before November 2010. Other than incidental loan amortisation from surplus rents, no further loan repayments are required before April 2013.

Ends

Enquiries:

Assura Group Nigel Rawlings/Conor Daly	Tel: [phone]
Financial Dynamics John Dineen	Tel: [phone]

 

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