Assura PLC (LON:AGR) has upped its interim dividend after growth in both its net rental income and portfolio in the first half of the year.
The FTSE 250 firm, which invests in and develops healthcare properties such as hospitals, reported that net rental income had risen around 21% to £46.2mln year-on-year while its investment property values increased 6.3% to £1.8bn.
READ: Assura splashes out £50mln on three more acquisitions
Assura also increased its interim dividend of 9.2% to 1.3p per share while the diluted EPRA net asset value (NAV) per share rose 0.6% to 52.7p.
During the period, Assura said it had added 39 properties to its portfolio at a combined cost of £108mln and a further £50mln on three new properties immediately after the end of the period.
The firm added that it also had around £189mln of acquisitions and developments in its pipeline going into the second half.
In its outlook, the group said it retained headroom for investment with a loan-to-value (LTV) of 30% and £398mln in available loan facilities.
The company added that its confidence in long-term returns was reflected in a proposed increase to its quarterly dividend from January 2019.
Jonathan Murphy, chief executive of Assura, said: "We have continued to deliver on our investment plan in the first half of the year, which has seen us grow our portfolio, refresh our pipeline of acquisition and development opportunities, strengthen our balance sheet and achieve an investment grade rating of A-. The performance of the business and our confidence in the outlook is reflected in our decision to raise the dividend by 5%."
Low risk returns but broker says NAV growth misses forecast
In a note to clients, analysts at City broker Liberum said that the firm continued to offer “high single-digit return potential, with low relative risk” despite demising scale benefits from acquisitions and the 0.6% NAV growth coming in 1% below its forecasts.
“We continue to believe Assura remains well placed for some further gradual improvement in rental growth, as inflationary pressure prompts increase for 28% of the group's leases linked to RPI and some resurgence in new development approvals provides evidence of current land and build costs which can be used to price open market rent reviews. However, the pace of improvement remains modest” they added.
In early trading Thursday, Assura shares were down 1.7% at 55.5p.