Warrington-based healthcare property landlord Assura Group attempted to draw a line under a stormy few months with the replacement of its chief executive with immediate effect on Thursday.
In November, Assura had to raise £35m through a rights issue of new shares to cancel a costly loan based on an interest rate swap deal with National Australia Bank. Cancelling the loan saved more than £5m a year in interest payments.
Assura owns more than 160 GP surgeries and primary care units around the country valued in excess of £500m.
The new chief executive is Graham Roberts, a former real estate senior partner at accountancy firm Arthur Andersen and more recently finance director of British Land Company from 2002 to 2011. His clients at Arthur Andersen included NHS Estates and a number of NHS trusts. His early career was at Binder Hamlyn. He is currently non-executive director and chairman of the audit committee of Balfour Beatty.
Roberts replaces Nigel Rawlings, who has resigned and stepped down from the board. Rawlings will remain as an advisor for the next month, assisting in the handover. Rawlings joined Assura as chief financial officer at the company's inception in 2003, becoming chief executive in March 2010.
Assura has also decided to reinstate dividends but on a quarterly basis. The first quarterly dividend will be paid as an interim dividend in July 2012 at a rate of 0.285p/share, equivalent to 1.14p/share annually.
In a trading update to accompany the directorate changes, Assura said that since 1 April 2011 the company completed 99 rent reviews, resulting in an additional £806,000 a year in passing rent for existing properties and an anticipated weighted average annual rental increase of around 3.5% for the current year as a whole.
The statement went on: "The development pipeline remains strong and is expected to be a key contributor to rental income growth in the near term. Since the Company's interim management statement on 9 February 2012, Assura has completed one development in the Midlands, adding a further £300,000 of annual income to the company's rent roll which, when combined with those projects currently on-site or due to commence in the next six months, will have an aggregate estimated rental value on completion of £2.6m, an uplift of 7.6% on the annualised rent roll."
Simon Laffin, chairman, added: "To have attracted such an experienced and well respected real estate professional as Graham Roberts to become our new CEO represents another significant step forward in Assura's continued development, since its return to being a pure play primary healthcare property business, having successfully divested its other interests during the year.
"Since I became chairman six months ago, we have reaffirmed our core property strategy, secured long term financing, cleared out the significant legacy derivative problem, launched a successful rights issue and strengthened the Board, culminating in today's appointment. As a result, we now have the confidence to declare our intention to resume dividend payments and announce a progressive dividend policy. I would like to thank our shareholders for their continued support and I look forward to working with Graham Roberts, our new Chief Executive, as we continue to build on the recent positive momentum achieved.
"I would like to thank Nigel Rawlings for the wholehearted commitment, dedication and diligence that he has shown to Assura over the last eight years. The Board wishes him well for the future."
Graham Roberts, incoming chief executive, said: "I am delighted to have the opportunity to lead Assura towards becoming the investment vehicle of choice in the UK primary healthcare real estate market and to take the reins at such an exciting time in its evolution. Much has been achieved recently to refocus the group to its core property business, which has produced impressive property returns through the downturn as demonstrated by the fact that annualised rental income growth has averaged approximately 4.4% over the last five years, despite some slowing in the rate of growth in the second half of the current financial year. This performance reflects the team's expertise in investment and development as well as the core fundamentals of primary healthcare: long leases, strong covenant strength and the long-term need to upgrade primary healthcare premises. Government policy continues to put GP's at the heart of the NHS, which underlines the importance of Assura's role in providing appropriate infrastructure of the highest quality."
Shares in Assura were flat at 30p in early trading on Thursday.
As announced on 26 January 2012, Peter Pichler will stand down as a non-executive director on 31 March 2012 and Clare Hollingsworth intends to step down as a non-executive director when a replacement is appointed. David Richardson joined the board on 3 January 2012 and the search for an additional non-executive director to replace Hollingsworth is well advanced.