Assura Share Discussion Threads

[panshanger1] 16/8/2024 08:03

Decent holding Caledonia investment trust presumably

[alotto] 15/8/2024 04:18

Not so crazy if the integration can make it more valuable.

[blueclyde] 14/8/2024 20:11

Looking back at the results the NAV of Assura was nearly 50p a share vs a share price of 41p. So they issued new shares at a 20% discount to their intrinsic value to buy a company that was on a 12 percent discount to NAV. Just crazy.

[george stobart] 09/8/2024 08:31

As per RBC, Assura managed to acquire the £500m UK portfolio at a ~12% discount to its Q1 2024 NAV. NorthWest is a Canadian REIT and publishes periodic NAVs.

So effectively Assura can now mark-to-market the assets to its NAV to get an immediate uplift, in addition to the earnings per share accretion.

All amounts referenced below are in Canadian $.

RBC Capital Markets
August 9, 2024

NorthWest Healthcare Properties
An important step forward in balance sheet repair; strategic review concludes

Our view: On balance, we view the $885MM sale (5.9% cap rate) of the UK portfolio as a net positive. Ideally, we would have preferred an all-cash deal, and the price tag is ~12% below the $1B IFRS value at Q1/24. Importantly, however, the transaction accomplishes several key objectives, particularly on the balance sheet. Specifically, we estimate proportionate D/GBV improves to ~54% from 59% at Q1/24, with the cash portion of proceeds used to pay down higher cost debt (7.9%). As well, the debt repayment addresses about half of the significant ~$1.5B of debt maturing in 2025, while also reducing floating debt exposure (35% at Q1). The transaction should also be accretive, with NWH estimating ~$0.06/unit of upside to annualized AFFOPU (vs. our current 2024E $0.39E).

[goliard] 09/8/2024 07:57

Great analysis.

[williamcooper104] 09/8/2024 00:53

Remember the divi yield is c8% So if they issue equity then that costs 8% assuming they keep the divi at the level of DPS thus if they get a return under 8% then they reduce divi cover The annual rental uplifts probably makes good any hit to divi cover in a few years

[williamcooper104] 09/8/2024 00:46

The Canadians are distressed - they went empire building; funding it with too much leverage with very little interest rate hedging They will not have wanted to take equity

[williamcooper104] 09/8/2024 00:45

So have to put a lot of faith that this is good statistically The assets are good and 5.9 is an attractive price If we go back to materially lower rates it will look like a steal in a few years But notable that the term loan is for 2 years - so it looks more like a bridge loan and thus puts execution pressure on AGR to sell assets Again if they can do this into a falling rate environment they'll look great

[williamcooper104] 09/8/2024 00:42

They are buying at 5.9 (let's say 6 with near term rental growth bagged) Borrowing about 50% of that at 5.1% So that gives a running return of c7.8% Their cost of equity (assuming this is EPRA EPS yield) is a little over 8% So while this produces positive EPS it's hard to see how it's accretive and how it won't weigh negatively on divi cover (at least in the short term) Admittedly it's not as dilutive as the discount to NAV might suggest - but it's not great either

[blueclyde] 08/8/2024 16:57

Absolutely crazy issuing more shares below their NAV. Market does not like the dilution.

[this_is_me] 08/8/2024 13:15

Yes, it doesn't seem a great deal although the income being very low risk is a plus.

For the Canadians selling, the FX risk may have been a factor.

[goliard] 08/8/2024 12:11

I am not a fan of this transaction. I am sure on a spreadsheet somewhere it looks good but only because of issuing shares in part payment. The yield is too low in my view. Simply no need to have done this deal.

[george stobart] 08/8/2024 07:59

Earnings accretion detailed on slide 12

- Proforma EPRA Earnings move immediately from £102.3m to £111.9m (+9.4%)

- Proforma EPRA Earnings per share move immediately from 3.4p to 3.5p (+3.0%). That fully includes the impact of the share dilution and debt issuance.

[alotto] 08/8/2024 07:07

Interest cost stare to bite. Hopefully tastes will come down fast in the coming years.

[george stobbart] 08/8/2024 06:40

Immediately accretive to earnings from year 1

[rik shaw] 08/8/2024 06:20

Big aquisition:


'the issuance of consideration shares will ensure Assura continues to maintain leverage within our stated LTV policy range of 40-50%, with proforma LTV of 48%. Over the following 18-24 months, Assura intends to strengthen the balance sheet by targeting LTV to below 45% and net debt to EBITDA below 9 times through the use of third party capital and a disposals programme which will include a mixture of portfolio and individual asset disposals.'

'Assura's debt maturity profile is tightened from a weighted average maturity of 5.75 years as of 30 June 2024, to 5.3 years for the pro forma group, with weighted average cost of debt increasing from 2.30% to 2.99%.'

[panshanger1] 02/8/2024 16:13

Interesting Led the footsie 250 today !!

[goliard] 01/8/2024 11:36

I don't see 70 happening unless we get some sort of global problem and rates have to fall to zero again. I would be happy with 50p by end of 2025 and 8% yield in the meantime.

[george stobart] 01/8/2024 11:23

Sir Kier cut the rates to help pump his assura shares

Sir Kier will cut again next month, I have inside intel

[justiceforthemany] 01/8/2024 11:01

Rates cut.
Look forward to this getting back to 70p+

[george stobart] 19/7/2024 09:39

Blue Horseshoe loves Assura PLC

RNS incoming shortly

[badtime] 16/7/2024 13:03

Regulations

[tialouise] 16/7/2024 12:47

Ask him !!!