Assura PLC (LON:AGR) has reported a jump in rent income in its full-year results, however pre-tax profits for the firm fell by nearly a quarter.
The FTSE 250-healthcare property investor and developer reported net rental income had increased 18.1% to £80.2mln from £67.9mln the year before, with the group also seeing a 28.8% increase in its property portfolio to £1.7bn from £1.3bn.
Pre-tax profits plummet 25%
However, the group’s pre-tax profits for the year dropped 25% to £71.8mln from £95.2mln, which Assura said stemmed from a £211mln payment of long-term loans held by Aviva Commercial Finance, including early repayment costs of £56mln.
The company also increased its total dividend for the year by 9.1% to 2.45p from 2.25p the year before.
Looking ahead, Assura said it had the “strongest balance sheet in the sector” and that it was well placed to continue investing in primary care property.
The group added that it was frustrated by the slow pace of policy transformation in regards to investment in primary care infrastructure for the UK’s National Health Service (NHS).
The NHS now accounts for 84% of Assura's total rent roll, with about 7.5% of NHS patients using an Assura premise.
Jonathan Murphy, chief executive of Assura, said: "We have delivered against our key objectives for the past year of growing the portfolio through acquisitions, strengthening the balance sheet to allow us to capitalise on the opportunities in our market and delivering sustainable returns to investors.
He added: “Primary care remains key to the future requirements of the NHS. Our unique model, which delivers significant value to the NHS, and diversified funding structure, positions us well to deliver the improvements needed for a primary care estate that is fit for the future."
In a note to clients, analysts at Liberum commented: “Assura generated good returns in FY18, but they fell short of our expectation despite the group’s elevated acquisition spend supporting earnings and industry yield compression.
They added: “A £152m pipeline of acquisitions and developments provides the basis for another year of growth in FY19, but given the progress made in extracting scale benefits, we see diminishing marginal returns from here.”
In mid-afternoon trading Wednesday, Assura shares were down 1.1% at 58.3p.