Insider: directors lock in 9% dividend yield

Buyers of 9.3% yielding Assura (LSE:AGR) were last week joined by the healthcare landlord’s own investment chief after he spent £39,000 on shares at a decade low price.

Thursday’s purchase by Steven Noble took place as long-term government bond yields set a post-2008 high to put further pressure on the appeal of real estate investment trusts.

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His dealings at 36.6p followed a third-quarter update in which Assura flagged its strategic progress since a landmark deal increased exposure to the private healthcare sector.

The update also highlighted Assura’s strong position to support government policy that continues to shift more towards community healthcare and reliance on private providers.

This follows the £900 million of funding for GPs announced in December and an additional £100 million of committed investment to upgrade the GP estate.

FTSE 250-listed Assura has a £3.2 billion portfolio of more than 600 healthcare buildings, from which over six million patients are served.

Its annual rent roll stands at £176.9 million, about a quarter of which is now private healthcare after August’s acquisition of Northwest’s 14 private hospitals for £500 million.

The tenants are all major hospital operators in the UK, comprising mainly Nuffield Health, Spire Healthcare and Circle Group. The assets benefit from an average rent cover of 2.3 times.

The deal represented 2024’s second strategic development by Assura after May’s announcement of a £250 million joint venture with the Universities Superannuation Scheme.

With an initial portfolio of seven assets valued at £107 million, the venture will invest in assets let to the NHS or GPs and is seeking to reach £250 million within three years.

For Assura, this arrangement provides a further new source of funding as it looks to diversify into sectors at scale so that it targets growth in the right market at the right time.

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An asset disposal programme launched alongside the hospital acquisition raised £48 million from 17 properties in the third quarter, with active discussions on a further £110 million.

The completed disposals mean Assura is on track to reduce its loan-to-value ratio to below 45% and net debt to earnings to below nine times over the next year to 18 months.

Operationally, it reported positive progress on rent reviews after 59 were settled in the quarter with an uplift of £600,000 or 7.2%. About a fifth of the rent roll is due for review in the first quarter of the next financial year.

Deutsche Bank, which has a price target of 48p, said that Assura was making “some headway”.

Stifel added that shares are “very undervalued”, pointing out that the 9.3% dividend yield is fully covered by recurring earnings and materially higher than undiversified peer Primary Health Properties.

It added: “Assura offers operational excellence and a portfolio that is able to grow across several healthcare property sub-sectors, driving superior earnings growth.”

Last week’s purchase of shares by Noble was his second since joining the company in September in the newly created role of chief investment officer. He also bought £100,000 of stock at 38.6p in November, which compared with the 47p share price at the start of 2024 and 69p in 2022.

Peel Hunt highlighted a price target of 45p in November but said that its preferred pick remained Primary Health Properties, partly due to income security resulting from government backing over 89% of the rent roll versus Assura’s 66%.

The right call?

The driving force behind the growth of AIM-listed Netcall has raised £1.9 million selling shares in the intelligent automation business, partly in order to satisfy demand from investors.

Henrik Bang, who ran Netcall for two decades before becoming its non-executive chair in January 2024, made the disposal with shares trading a third higher than in November.

The move left Bang with a 2.7% stake of 4.4 million shares, which he has no current intention to sell. About 45% of Wednesday’s disposal at a price of 111p was for estate planning purposes, with the other 935,000 shares in order to meet investor demand.

Annual results in October showed the company benefiting from strong customer momentum as both public and private sectors continue to pursue digital transformation initiatives.

Cloud services revenue grew 19% to £19.8 million, accounting for just over half the company’s total for the year. Increasing cloud subscriptions meant a higher proportion of recurring revenues at 76%, which contributed to strong cash generation.

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Canaccord Genuity said at the time: “With a loyal and growing customer base, expanding product portfolio and cash generative profile, we believe Netcall has all the ingredients to deliver against our double-digit growth expectations.”

Netcall's customers span the enterprise, healthcare and government sectors, including two-thirds of NHS Acute Health Trusts and the companies Legal and General, Lloyds Banking Group, Aon and Santander.