Assura Limited (AGR) Earnings Call Transcript & Summary

Jayne, you will have some questions sort of come through on the.

Yes. I've joined...

So in terms of the pre-submitted questions, we've got a question from Alessandro, which is saying. What is the raise on debtor of the company? Gosh, that's a philosophical one. And where do you draw the line between shareholder and stakeholder interest. So what's the raise on debt of the company? So we have an overall mission, which is we build for health, which is about providing the right facilities to support the NHS in delivering successful health outcomes and reducing health in the quality. So that's the overall objective. But obviously, in that, we have multiple stakeholders. We have shareholders, and we provide a 4.7% dividend yield that we've been growing at 5% a year, and that's obviously absolutely essential. We have banks that we have to raise money from and bondholders that we have to provide returns, and we have an investment-grade rating for that. We obviously have our team who is a key stakeholder. We have to make sure that we look after because can't do anything without the team supporting us. And of course, we have a commitment and an obligation to support the environment and to do what we can to support sustainability. So there isn't one. It's the short answer. I was under -- it's a mixed model. We look -- we have all stakeholder interest at heart. I mean clearly, the financial returns is a key priority for us. But then so is sustainability and making sure that we deliver that. You can't do one without the other. We can't deliver positive health outcomes if we don't give good financial returns because we need the support from investors and banks to be able to fund that. So it's not mutually exclusive, it's mutually supported. So further question from Alessandro is -- is there an optimal size for the company, either by number of assets or financially. So it's a really good question. So over the last 5 years, we have effectively doubled the size of the business. So we've got now almost a GBP 3 billion, GBP 3 billion portfolio. And as part of that process, by becoming larger, we've been able to access the bond market, for example, so because we can now afford to raise GBP 300 million in loans over the bond, we can get better interest rates because it's a deeper, more liquid market. So scale gives you certain advantages in terms of capital markets. So you can raise equity more efficiently, you can raise bonds more efficiently. So that's an advantage. There's definitely an advantage in terms of efficiency. So we have a certain amount of overhead. We have certain amount of corporate overhead. And obviously, if you have a larger portfolio, you can spread that over your fixed costs over a larger base. So we have brought -- over the last 8 years, we brought our cost ratio down 20% of our income to about 13%. So clearly, again, you can see there's an economy of scale. So there are economies of scale. Is there an optimal size? Well, no, there isn't really. So benefits from being slightly larger. But equally, we don't chase size or just for its own reward, it's about whether it provides the right overall return. So we're very comfortable with the size we have. We have delivered economies of scale, but there isn't really a target or outsized equally very comfortable if we continue to grow, but equally will be very comfortable at the current size of the business. So I hope that helps, Alessandro. So further question we've had online is from Nick. It is what are your views on adding social prescribing facilities to your offering, which could include gym, sport, gardening, Tai chi, green space -- making use of green space. Really good question, Nick. It's actually a question we got asked by shareholder at our AGM about 7 years ago, which was really interesting because then I remember very well because at that time, social prescribing wasn't really something that people were talking about and he was involved with a charity that was providing those types of activities and supporting the local GP, but it's the first time I've really heard of that. It's now something that we really actively support. We provide -- we have our Assura Community Fund, which supports health and wellness activities lead to our buildings as social subscribing is a really important part of that. That could be a garden for providing -- communal garden for people to come and socialize and use the garden, it could be supporting walking groups. It could be providing an ability to get debt advice, for example, might sound very non-health related, but actually worrying about finance. It actually can have a material impact on your well-being and your health. So all of those things, absolutely. We do that either through our own -- through the green spaces, through our project to the community fund or working with the GPs. So it's a really, really good question because it's a really important part of what we do. And a question from Andrew, which I'll ask Jayne to answer, which is what percentage of your borrowing is fixed versus variable. It's quite an easy one.

Yes. So Andrew, all of our debt is fixed, 2.3% average interest rate. We have no variable rate borrowing at this time.

That's the last of the questions that we've had submitted online.

I'm just hoping -- you don't have a planning problem by any transfer [indiscernible] premises.

Yes, just one thing, not giving much information from my acting I presume on your voting is, there'll be share buybacks for that seem be automatic in it. That is a bit of a bet from share buybacks. You're a growth company. So I hope you don't ever get driven down that road sort of [indiscernible]. You see this is in trouble. And the other thing is you have [indiscernible] Smart City bankers come on to, or sale and leaseback and lend yourselves down with some debt. You can fund us with dividend. So I mean you're a growth company, don't waste your money, share buyback because do you expect to you're going to need to finance -- there's no still anything we finance a to GBP 300 million going by some shares.

Well, I mean, Jonathan, you've got to -- if you wanted to do that, you have to time it right, et cetera. We do have a general provision to give us flexibility on how we deal with our [indiscernible]. So, yes, there's a question on the AGM, which is asking for authority. I can assure you, we have no plans to venture into any share buyback. We have plenty of opportunities to deploy that capital into health facilities and new projects with the idea of buying shares, it's not on the agenda.

It just means to get this to we don't know what to do with that money. You have to...

I think we have...

You can pay big dividends and then I also -- so I don't pay the tax [indiscernible].

That's currently not a problem we think to have not say that [indiscernible]. It's not a plan of ours.

No, I think it's a different view between institutions and private shareholders. We know who wins in that battle, there we are. You say you have limited information through your [indiscernible] shareholding, although the website has it, if you [indiscernible] set of accounts please do because I can easily get another one and it's an excellent [indiscernible].

I love a block of flats with [indiscernible].

Enjoy reading that, which is an excellent read and we'll see you next year and answer questions on the annual [ meeting ]. Okay. So thank you very much. We'll now proceed with the formal business of the AGM, which consists of the 18 resolutions, which are set out in the notice of meeting dated the 1st of June, and which was sent to you together with an explanatory note, and the annual report itself. As mentioned in the circular and as committed under the Articles of Association, I direct that all business to be transacted at today's AGM be voted on by way of a poll. This will result in a more accurate reflection of the views of shareholders by ensuring that every vote is recognized, including the votes of those shareholders who are unable to attend physically, but who have been a [indiscernible] appointed proxies for the meeting. Shareholders present in person, corporate representatives and proxies are, of course, entitled to vote. The notice of the meeting includes no less than 18 items of business for your consideration. An explanation of each of these is set out in the AGM circular. But in summary, Resolution 1 covers the annual report and accounts for the year ended 31st of March 2022. Resolution 2 seeks approval of the directors' remuneration policy for the year ended 31st of March 2022 contained in the annual report and accounts, which so you can read at your leisure. Resolution 3 seeks approval by way of advisory resolution of the directors' remuneration report for the year ended 31st of March 2022 contained in the annual report and accounts. Resolutions 4 and 5 are our audit-related resolutions. Resolution 6 to 13 cover the reelection of Louise Fowler, Jonathan Murphy, Jayne Cottam, Jonathan Davies, Sam Barrell, Emma Cariaga, Noel Gordon and myself as directors. And Resolutions 14 to 18 cover capital and other issues, including authorizations relating to the allotment of share capital and the disapplication of preemption rights, the repurchase of shares and the notice period for general meetings. Resolutions 15 to 18 are proposed as special resolutions. Does anyone have any questions on any of today's resolutions before we proceed to voting.

Nothing online.

I can explain the voting procedure, but I've mentioned now the fact because all resolutions will be voted on by way of a poll. These resolutions will be in effect voted on simultaneously rather than sequentially. Accordingly, this is one opportunity for you to ask any questions you might have before I ask you to vote. The process, Company Secretary, Fowler will act as scrutineer in connection with the poll. She will be assisted by our registrars, Link Asset Services. Only shareholders or their proxies or corporate representatives are entitled to vote on the poll. To vote on the poll, you will need a poll card, which you have given up on registration. If you wish to vote on the poll in more than 1 capacity, you will need a separate poll card for each capacity in which you wish to vote. And if you need a further poll card, please put your hand up now. Obviously, any colleagues who are physically present and one will be passed to you. The shareholders present who have returned the form of proxy need not to complete the poll card unless they wish to alter their voting instructions of now. However, if a shareholder completes a poll card now, any proxy vote that has already been given that will be canceled. When the poll procedure commences, you should insert your name in the poll card in the places indicated for name of the shareholder. If you're using the poll card to vote on only some of the shares registered that you have to insert the number of shares and put across in respect of each resolution to indicate you're voting for or against that resolution. You should then sign a card in the place indicated and the cards will be collected after you have completed. Does anybody have any questions on the voting? Sorry, I have to go through that for obvious reasons. And I know given that the number of AGMs have not taken place physically and over the last couple of years, it's worth reminding everybody. So we can now commence the poll of you all submitted the 4 of you submitted as necessary -- would you like to hand the [indiscernible]. Thank you very much. Thank you very much. So as there are no more poll cards to be completed, the poll is now closed, and the results of the poll on each resolution will be determined by all the board as scrutineer. This will take some time. The results will be announced by an RNS as soon as practical, and we expect it to be honest, to be later today as we have significant proxies votes lodged at the relevant proxy cutoff time. And these are also available to -- from what I should anybody wish to see. So that concludes the AGM. And -- we thank all of our shareholders, Jonathan, rightly said, we are very focused on shareholder value. But in doing -- in providing shareholder value, we are also conscious of our wider stakeholder obligations and community in the virtuous circle that is created by driving being a really great organization to do business with and the delivery of that shareholder value. And we thank you for your support as shareholders in that endeavor. And with that, thank you for attending the AGM and I call the meeting closed. Thank you very much indeed.

That's great. Thank you Very much indeed. Could I please ask attendees online, not to close the session as we'll now automatically redirect you to the opportunity to provide your feedback in order that the Board can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the Board of Assura Plc, we'd like to thank you for attending annual -- today's Annual General Meeting online and may I wish you all a very pleasant morning. Thank you.

Thank you very much.

Thank you.

Thank you so much.