Assura Share Discussion Threads

[zeppo] 07/1/2019 22:01

Jonwig

Thank you!

We needed some good news.

z

[jonwig] 07/1/2019 18:46

The new forward plan for the NHS should shift care away from hospitals and towards local providers - GPs. This should mean that GP centres become and remain better-equipped, and those which aren't will need upgrade or new facilities.

This sub-sector should perform well, and be largely unaffected by UK economy worries.

[jombaston] 23/11/2018 18:26

Yes, if it is at a decent cost and sustainable v income,gearing etc. The leases are still longer than the debt.

i'm also pleased to see that the op&admin costs are only 12.3% of rent which is competitive v the peer group.

Smaller REITs understandably have higher ratios but I have looked at some recently that are well over 30%!

[zeppo] 22/11/2018 19:22

Jombaston

After paying off some debt expensively is extending the debt profile beneficial?

z

[jombaston] 22/11/2018 11:36

Very nice. Div should continue to be covered as the investment pipeline comes through. Also they have extended the debt profile.

[jonwig] 22/11/2018 11:09

The numbers look good, though I must admit I haven't given them much attention. The dividend increase is welcome - forward yield is about 5%.

[zeppo] 22/11/2018 10:05

Quarterly dividend rise from January 2019.


RNS today.


z

[jonwig] 11/10/2018 17:56

You can say that again!

[zeppo] 11/10/2018 17:43

Relief to me that after dropping to near 52p AGR is relatively steady in this dreadful market.


z

[jonwig] 01/10/2018 09:29

The trading update carries no surprises. Their debt rating of A- is very good, and "a £300 million senior unsecured bond with a tenor of 10 years and fixed interest rate of 3 per cent per annum" is a pretty good rate.

Share price will have to take care of itself!

[aa29] 06/9/2018 10:24

The annual report is worth a look. Check how many pages there are justifying exec remuneration and then compare against amount of comment on shareholder return.

[jonwig] 03/9/2018 18:55

EI - right, thanks. When I bought here, it was in preference to the other two companies as I thought less risky. But that was a while ago.

[essentialinvestor] 03/9/2018 18:52

Jon, my comment was re the ..bond proxy post.
To be honest I don't have enough interest in this sub sector
to investigate a comparative analysis. Luck with your holding,
and my view is often on the cautious side in fairness.

[jonwig] 03/9/2018 18:46

EI - okay, I've looked this point up in the latest fundraising circular from November 2017. In the risk factors, p21 (pdf p23) they have:

The Group’s development pipeline may also be exposed to cost overruns, completion delays, planning difficulties and financing shortfalls, in which case the Group may need to commit additional funding to the relevant development than it had originally planned from its existing cash resources. Furthermore, while the Group’s policy is to engage in developments that are substantially pre-let with fixed price build contracts (or contracts with a price ceiling) in place at their inception, occasionally some of the Group’s developments may not be fully pre-let. In such circumstances, if the Group were unable to find tenants for any surplus space, the Group could be left with unutilised space in buildings which may have limited application to alternative uses, thereby negatively impacting the Group’s return on its development investment.

The underlined bit suggests the situation here isn't really so serious. But, given that it is building new health centres, it is acting at both ends of the infrastructure sector: construction (riskier) and rental/maintenance (safer).

My question to you would be: is this situation any different from that of PHP and MXF, the other two sector players? And are these two better-performing, more or less risky (look at gearing)?

[essentialinvestor] 03/9/2018 18:11

This may be higher up the 'risk' scale than consensus perception.

Assura assume liability for construction costs, what protection do
they have against cost overuns..

[zeppo] 03/9/2018 16:46

One suggestion is that the current decline may be due to the summer market - where lower volumes may lead to anomalies.

Companies must inform the market if there is a real issue of concern.

Happy to collect the quarterly dividends.

z

[jimbo3352] 03/9/2018 15:55

I had some PHP but sold out as I thought they were overvalued. I appreciate AGR is a bit of a bond proxy but the nav has been improving steadily and yet the share price still declines. FWIW I'm happy to top up at this level given the healthy pipeline and progressive dividend.

[winsome] 03/9/2018 15:20

PHP have performed a bit better and have a bigger premium to NAV but poorer dividend cover. I hold them too but much less than my Assura holding. I personally prefer Assura but the market obviously doesn't.

[winsome] 03/9/2018 15:12

Yes, good summary jonwig. AGR make up nearly 10% of my portfolio. Bought in just over 30p and been disappointing last 3 years but no worse that than the FT350 performance.

I feel it will settle around 52p level and I will top up at that point for the 4.5% yield, if only because I can't find much value elsewhere at the moment.

[zeppo] 30/8/2018 15:51

Thank you for your excellent analysis of the situation!

I can move from panic mode to calm.


z

[jonwig] 30/8/2018 15:36

At 31 March, the nav (EPRA) was 52.4p, so there's still a premium there. Many property sectors are moving to discounts with only industrial estates commanding a premium.

If you invest in property shares, you need to follow relative sentiment (retail? - right!), and start to get concerned only when a discount appears. This could happen if AGR were over-geared (it isn't) or there was political risk (I don't really see it) or they said discouraging things (they don't).

It does look as though they might find it hard to do an equity fundraising since you need a decent gap between nav and sp, but at the moment there's no sign of that.