Assura Share Discussion Threads

[goliard] 29/3/2012 18:29

It is a poorly drafted RNS as you could read it either way. My guess is no final dividend and this is the new CEO stamping his authority on the business strategy, but they could have been clearer I agree.

[topvest] 29/3/2012 17:32

Mulling it over again....one issue I have with today's announcements is that it contradicts the interim management statement where they stated that they planned a final dividend. From what I can see, this has been ditched in favour of a new lower quarterly dividend. Bit clumsy, given the same Chairman has changed his view in a matter of weeks. I suppose they could also do a final dividend as well, but unlikely. Hope the new CEO gets this company in shape as it is not going to gain support unless it stops u-turning and messing up! Any thoughts?

[goliard] 29/3/2012 12:22

Agree with the above posts. It is interesting to note that in a period of exactly two years, the entire board of Assura, bith executive and non-executive has been replaced. Hopefully the new directors will be more alligned to shareholder interests and can start producing decent returns.

[scburbs] 29/3/2012 09:02

Topvest, I agree that MedicX are following a seriously aggressive dividend policy. I would view PHP as the benchmark in the sector.

[topvest] 29/3/2012 08:59

Well it's a good appointment. I would guess that we might get 1.25p as a dividend in the next financial year. I agree it's on the low side, particularly as there is no dividend at all for this financial year but others such as MedicX are over-distributing. I don't mind them starting low as long as they have a progressive policy and they don't mess up this time.

[scburbs] 29/3/2012 08:20

Good to see the CEO on his way. Looks like a good appointment. You would hope that Graham Roberts would have had the sense not to have crystallised such a large swap loss when the payback period in order to recover it through lower interest rates was such a long time (and longer than the term of the new debt taken on!).

They need to be doing better on the dividend. That is a low yield on the share price (relative to competitors) and a really low yield on NAV. Playing it safe so in 10 years time they can claim an unbroken track record of rises is not something they will get much support for from current shareholders!

[topvest] 29/3/2012 08:08

All change today then. Quarterly dividends for next year, although starting at quite a low level. New CEO looks very good news.
Looks to me like Assura is being changed for the better, so maybe a good entry / add point down at 30p.

[scburbs] 07/3/2012 13:35

Topvest,

Agreed, divi is the key here - not seen a forecast. AGR need to be competing with PHP and MedicX on yield against NAV and should be ahead of them against yield on share price (this is the differential needed to close the gap). They need to be paying 2p+ IMV despite the new shares, anything less than 1.75p would be poor.

Perhaps they shouldn't expect to compete with MedicX against NAV as they pay an uncovered dividend, but PHP who pay 5.6% of NAV should be the benchmark. They will probably struggle to match PHP's yield on EPRA as PHP have a better track record/cheaper debt. They should however be looking for 4.5-5% of adjusted NAV translating to a higher yield on the share price and providing a driver for a re-rating.

If they start by paying an overly conservative dividend then that would be an error IMV (surely they have already filled their quota of errors!). Shareholders have given them the money, it is time for AGR to start giving back with rental growth and development profits driving a solidly increasing dividend from a solid starting yield of well over 5% of the current share price of 33.5p.

[topvest] 27/2/2012 17:31

Yes, think these are undervalued now the bad news is out of the way. Focus will soon turn to the chunky final dividend, anywhere between 1 and 2p I guess. Anyone seen a latest dividend forecast?

[goliard] 27/2/2012 09:41

New Chairman isn't being too shy about his purchases. Nearly 1 million already.

[goliard] 09/2/2012 13:20

Don't forget that the new shares issued will dilute the dividend. Would still hope for 2p annual which is about 6.5% yield at current prices.

[scburbs] 09/2/2012 12:36

Annual dividend going forward of 2-2.5p (and growing with rental growth) and a share price move towards 40-45p would seem about right. It would be interesting to know what margin they are achieving on the developments.

[topvest] 09/2/2012 12:02

Yes, this looks much better now the bad news is in the rear view mirror.

[ganthorpe] 09/2/2012 10:49

They last year paid a 1.25P divi in July announced in June.
There is a reassuring IMS issued today which is worth a read. Hasn't done anything for the share price.

[topvest] 04/2/2012 17:23

Anyone seen the latest broker report please? What is the final dividend expected to be?

[scburbs] 23/12/2011 19:33

The new management may not be responsible for the mistakes of the past, but they have well and truly put their names in the hat for being responsible for the future mistakes of the past! Question to the board, hands up which idiots thought a rights issue to fund closing the swap was a good idea? Payback period of over 10 years - yes get me some of that! New 5 year loan to lock in the benefit of the 10+ year payback period - absolutely!

Ever heard of resignation Kermit?

[goliard] 23/12/2011 14:08

Can't really argue with that, the history is what it is. Thankfully the company is now so simple that it should be quite hard to get it wrong!

[kenny] 23/12/2011 11:52

AGR has a long history of destroying shareholder value and, even worse, in record time.

Please don't tell me about everything being changed because of new management being in place - this latest placing continues in the same vein as the previous management.

[goliard] 23/12/2011 09:08

Horndean, agree with your last post. I also think you will see the costs point demonstrated. PHP has been far better run for years now, but if I was a new investor I would buy AGR as the upside potential is higher. Also worth remembering that any property co trading at or above it's NAV is pretty much bullet proof from any takeover approach, but these same companies must be looking at AGR and thinking how they would like to buy such a simple company trading at a discount to NAV. If AGR drops below 25p I will try to buy the rights shares I didn't take up.

[horndean eagle] 22/12/2011 18:38

Managed to answer my own question regarding the 5m interest saving. The swap rate was due to go up from 3.3 to 4.6%. That would have led to an extra 2.3m in interest payments. The saving from cancelling the swap will lead to an increase of 2.7m in profits. The amount they have paid for this is galling. Borrowing costs going forward will average 5.4%. AGR borrow at 4.75% on their recent 10 year bond and PHP paid 4%.

[horndean eagle] 22/12/2011 18:05

With AGR I will believe their costs will come down when I see it. The 5m saving they alluded to for interest payments doesn't make sense at all. The PHP swap costs are neither here nor there. They can still get access to funding at cheaper levels.

[goliard] 22/12/2011 17:18

PHP costs are actually higher now. Assura's look high because of all the extra head count in their pharmacy and LIFT businesses, but these have both been sold off now and the real cost saving won't be seen until this years results are published, albeit they will contain costs associated with LIFT as it wasn't sold until very recently (about 20 people plus offices and running other running costs).

I think Assura offers better upside for investors now, but I am still disappointed with the rights issue debacle. Great for new investors though and PHP still has the pain of its SWAP.

[horndean eagle] 22/12/2011 14:34

Its not really the return on offer that is the issue. Its the relative value. PHP trades on a premium to NAV yet yields higher than AGR. PHP dividend isn't full covered but they have much lower charges, cheaper funding and a much better reputation. Where would you invest if you were looking for exposure to the sector? Everything does have its price though.

[scburbs] 22/12/2011 13:38

HE,

It may not be attractive to you, but pension funds are really suffering from QE. They can not afford long term investment returns of 2% as that will massacre their projections (and pension deficits will balloon). They are being pushed, quite forcefully, down the risk curve and whilst they could buy the plentiful Italian bonds at above 5% I don't believe that they will!

A long term secure 5% (hopefully higher than that at current share price) income stream, rents government backed and potential for rental growth. Whilst it may not be that attractive to you or to me (the only attraction to me being the potential attraction to others!) in a low return world it could become surprisingly attractive to certain types of institutional investor.

[horndean eagle] 22/12/2011 12:27

Doing some rough calculations I reckon they will make around 8m a year in profit. Costs are very high though. Market cap circa 165m. A covered dividend yield would be circa 5%. Not very attractive.