Assura PLC

Earnings Release • Sep 30, 2010

Assura Group Limited

Interim Results Presentation Period ended 30 September 2010

Significantly Improved Results

• Revenues up 16.3% to £30.7m (H1 2009: £26.4m)
• Group operating profit up 122.7% to £16.7m (H1 2009: £7.5m)
• Pharmacy business is now consistently profitable delivering an H1 profit of £1.4m
• Adjusted net assets of £198.6m (31 March 2010: £186.5m), equivalent to 64.8p (31 March 2010: 60.9p) per share*1
• Net cash inflow from operating activities £4.6m (H1 2009: Outflow £6.4m)
• £35.3m cash in hand at 30 September (31 March 2010 : £24.6m) *2
• Dividends resumed. Interim dividend declared of 1p per share
• *1 Adjusted diluted net asset value per Ordinary Share (excluding the notional mark to market value of the Company's interest rate swap and own shares held)
• *2 Includes £20.2m of cash ring fenced for property development expenditure and an interest payment guarantee

Significant Increase in Profits

	H1 2010 £m	H1 2009 £m
Net Reported Profit	(11.7)	9.9
Swap Movement - Company Swap Movement - Associates	20.8 2.9	(8.6) (0.8)
Adjusted Net Profit	12.0	0.5

• Adjusted net profit i.e. with swap movements added back is £12m (H1 2009: £0.5m)
• Non cash Swap losses £23.7m
• Long term interest swap rate trend changed in October 2010
• Reduced to loss of £8.1m for 7 ½ months ended 15 November 10

Improving Underlying Results

	H1 2010 £m	H1 2009 £m
Property Investment	10.2	9.2
Property Development	(0.2)	(0.3)
Pharmacy	1.4	0.8
LIFT	0.4	0.1
Divisional contribution	11.8	9.8
Central costs	(2.0)	(4.4)
Group Trading Profit per Income Statement	9.8	5.4

• Increased contributions from all divisions
• Reducing direct property costs & opportunity for further reduction
• Pharmacy net profit of £1.4m in 6 months (all from operations)
• LIFT revenue has increased
• Admin costs reduced significantly - & opportunities for further savings
• All led to growth in trading profits

Balance Sheet Summary

	30 September 2010 £m	31 March 2010 £m
Property Assets	374.8	359.6
Investment in Assura Medical	4.7	5.4
Investments in LIFT	7.9	9.5
Loan to Pharmacy JV	7.2	7.6
Goodwill & Licences - Pharmacy	16.2	15.7
Goodwill - Property development	20.0	20.0
Other fixed assets	4.9	5.0
	435.7	422.8
Cash	35.3	24.6
Debtors	10.5	10.3
Stock	1.7	1.7
Creditors - short term	(22.9)	(21.8)
Bank debt - short term	(1.5)	(6.5)
Bank debt - long term	(268.0)	(249.3)
Other liabilities	(41.0)	(20.3)
Net Assets (excluding "own shares")	149.8	161.5
Add Back financial derivatives	43.7	20.0
Add Back own shares held	5.1	5.1
Adjusted Net Assets	198.6	186.6
Per Share	64.8	60.9

• Total property now £375m
• Continued development adding cost effectively to the portfolio
• Net debt stabilised at £234m; Group gearing 55%
• Net assets, adjusted to exclude notional mark to market swap valuation 64.8p (31 March 2010 60.9p)

Medical Centre Investments Growth

• £341m portfolio, £23.4m rent roll *1, average net initial yield 5.94% with an equivalent yield of 6.33%
• Revaluation gain of £6.2m (H1 2009: £Nil)
• 85% of rents from PCT/GMS; 21% RPI linked
• Annual increase in rent from 27 reviews settled was 5.49% (£245,000pa)
• Continued revaluation surpluses expected from good management, rental growth, voids filled
• Resilient and valuable portfolio

^*1 Including the rental value of own premises

Good Development Pipeline

• 5 on site at 30th September with an end value of around £35.1m
• Identified potential pipeline beyond £106m across 20 schemes
• Revaluation gain £4.3m (H1 2009: £Nil)
• Cost effective means of growing portfolio
• 15 land bank sites with a value at 30 September of £13.5m with one sold since half year end and 3 others in solicitors hands

LIFT Investments & Consultancy

LIFT Investments

• Major position in 6 LIFT Companies
• LIFT Company property is off balance sheet
• Completed properties valued at £162m gross plus £96m in development
• 2 major schemes achieved financial close in period (£71m)
• £8.3m invested in 12% yielding loan stock

LIFT Consultancy

• LIFT consultancy generated revenue of £2.2m in period
• LIFT consultancy separable from LIFT investment business

Pharmacy

Profitable Pharmacy Business

• 34 predominantly health centre pharmacies
• 1 opened; 1 relocated and 2 refurbished in period showing good growth
• Pipeline of future stores
• Revenue £40m pa including GP Care
• Profit £1.4m in half year (H1 2009: loss of £0.1m before disposal profits)
• Efficiencies and economies helping to offset NHS price cuts

Profitable Pharmacy Business

• Synergistic with Property business and can be valued independently
• Careful investment strategy
• Well managed and lower cost base, but more productivity gains and economies to follow
• Total revenue growth 10.5% (7.2% growth on a like for like underlying basis)

Group Overheads

Reduced & Competitive Cost Base

• Administration costs have reduced by 14.4% (in continuing operations) with further savings targeted
• LIFT and Pharmacy absorb their own direct overheads
• Premises costs to be reduced significantly from next year (circa £750,000 pa cash saving)
• Central head count reduced (203 in March 09 down to 66 current including 14 pharmacy, 23 LIFT and 8 FM/front desk staff in medical centres)

Effective Debt Structure

• Net debt of £234m
• Less than £5m repayable before March 2013
• Property LTV 72.5%
• Assura's debt competitively priced <4.0% to 6.4%, core at 5.24% from September 2010 to 31 December 2011
• SWAP is neutral when the long term rate rises to 4.59% (currently circa 4.0%)
• NAB debt will be replaced ahead of March 13 expiry
• Active management of interest expense opportunity to switch from long term to medium term

Resuming Dividend Payments

• Group is trading profitably and cash positive
• Interim dividend declared of 1p
• Being paid out of realised profits

Strategy

• Property development ongoing to continue to grow the investment portfolio
• Active management, shrinking voids and direct property costs and growing rents
• Drive pharmacy growth through store redevelopments, selective new openings and productivity improvements
• Debt cost being actively managed
• Continued investment in high quality primary care premises

Summary & Outlook

• Profit adjusted to exclude swaps increased from £0.5m to £12.0m for H1
• Dividends resumed
• NAV, adjusted for swaps 64.8p (60.9p @ 31 March)
• Business benefitting from streamlining and medical property focus
• Delivered significantly improved figures in all divisions
• Significant cost reductions effected and ongoing cost control
• High quality portfolio of properties, LIFT investments & pharmacies

Appendices

• Rent pa £23.4m (31 March £22.5m)

Portfolio Summary

• Initial Yield 5.94% (31 March 6.02%)

• Reversionary Yield 6.67% (31 March 6.61%)

• Equivalent Yield (EY) 6.33% (31 March 6.46%)

Capital Value	No. of Investment Properties	Value £m	Average EY*
£0 – £500k	21 (28)	£6.22 (£7.6)	7.82% (7.99%)
£500k – £1m	15 (14)	£10.62 (£9.9)	7.39% (7.48%)
£1m – £5m	60 (59)	£142.325 (£135.6)	6.66% (6.72%)
£5m – £10m	12 (11)	£93.965 (£84.9)	6.20% (6.33%)
£10m – £15m	2 (3)	£25.28 (£39.8)	6.01% (6.18%)
£15m +	3 (2)	£52.57 (£35.9)	6.10% (6.2%)
Total	113 (117)	£331 (£313.7)	6.33% (6.46%)

Portfolio Summary

• 113 investment properties with 255 demised leases
• Average property value: £2.93m
• Largest property: 5.9% of portfolio value (North Ormesby £19.57m)
• Average GMS rent : £163.52psm

Income/Tenant split:

• GPs: 62%
• PCTs: 23%
• Pharmacy: 7%
• Other (mainly retail medical premises): 8%

GMS PCT Pharmacy Other