Edison Investment Research

Assura Group

Company overview

Assura has two businesses: a £353m property portfolio yielding £21m in rents and a profitable £30m turnover growth pharmacy operation. The GP Provider Organisation (GPCo) businesses are now represented by a 24.9% stake in Virgin Healthcare Holdings plus a £4m loan note.

Date	Reports available	Download
Mar 04 2010	Virgin's GP ventures The neat deal with Virgin gives Assura a cleaner market profile, allowing it to focus on the core property (£350m of assets mostly on long-term NHS rentals) and its growing pharmacy chain. Selling 75.1% of the GPCo stake, cutting £8.8m of costs and getting £8m of committed Virgin funding for the GPCos makes Assura profitable and cash generative. However, Virgin has no healthcare track record and Assura has to wait for the GPCos to mature to get a return. If Virgin loses interest, will Assura let its management and cash investment crumble or resume control of the operation? The GPCos may be off the accounts, but are not yet exited. Research type: QuickView	Log in to download 2 page note available
Nov 27 2009	Getting healthier Interim results to 30 September showed substantial progress in building the health franchise but a strategic shift may be underway. Pharmacy had a £15.2m turnover, up 25%, and made a tiny operating loss; it could be profitable from FY10 overall. Assura now has 68 NHS services running or at preferred bidder stage, a 23% rise since June. However, GPCos may be spun out to cut losses and spare cash, but at the expense of long-term growth. Property revenues were £11.9m on a £333m portfolio. The shares are at a discount to the basic 58.14p NAV (adjusted 654p). Research type: QuickView	Log in to download 2 page note available
Jul 03 2009	Check strategic health Assura has reported full year results and reported on its progress in undertaking a strategic transition that will take several years to come to fruition. The move from a £354m asset property business with £22m rental income to an NHS primary care service provider is not straightforward. The GP provider company (GPCo) model has given 55 actual or potential contracts. Pharmacy will grow from 38 to 42 stores and could become profitable in this financial year. However, NHS services run on narrow, volume-dependant margins and Assura has high overheads: £7m for medical and £11m for pharmacy. The shares are at a discount to the 67p NAV. Research type: Update	Log in to download 2 page note available

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Peter Knowles
Director, Fyshe Horton Finney