Small Talk: Pharmacy sale highlights Assura's property focus

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The Independent Online

Last week marked another step in Assura's evolution into what is essentially a property company. It sold off its pharmacy business for nearly £40m, leaving management free to focus on the group's health property development and investment activities.

The change has been swift, with three major deals to this end over the last 15 months, and now Assura boasts property assets worth over £500m. They are made up of more than 160 medical centres, valued at the end of March at more than £470m, against £334.3m last year.

The growing emphasis on property was behind the group's acquisition earlier this year of AH Medical Properties, which brought more than 50 properties into the Assura fold. Before that, the group distanced itself from the healthcare trade by selling its stake in its medical services business to Virgin Healthcare in March last year.

The shift leaves it well-placed to capitalise on the drive to reform the way the National Health Service works. Although the precise changes remain mired in political uncertainty, Assura is in a good position with well-equipped and purpose-built properties that can house doctors. Besides the main business of new developments, Assura also buys up existing surgeries, freeing doctors from ownership and releasing capital, and then leases them back to GPs, who retain control over the practice.

The company also provides some facilities-management services, looking after the day-to-day running of the building, with assistance for maintenance and repairs. It also helps out with refurbishment and, where required, extensions, although this is not the main focus.

The City seems pleased with the change in emphasis. Weighing in after last week's deal and full-year results, Investec analysts said the fact that Assura was now a "clean property company" made it "hard to see why it should trade at a more than 30 per cent discount to pro forma net asset values".

And though the group is still working on the possible disposal of its consultancy business, Investec said the arm "looks to have performed well... which should help any ongoing process".

As for the main property activities, things seem to be going well, according to the broker. "The property division has had a good year, with valuations holding up and Assura enjoying a particularly strong year for rent reviews (up 5.6 per cent on average or 4.3 per cent on a weighted average)," Investec said. "This drove an £8.5m revaluation gain. Rent reviews since the year end have been at a similar level."

SMEs uncertain about anti-bribery code

Recent months have seen numerous headlines about the new Bribery Act, which takes effect from the beginning of July and will replace old laws with a comprehensive anti-bribery code. But although it is almost upon us, small businesses have little idea what it might mean in terms of their everyday activities, according to a new survey by the software firm Sage.

Its poll shows that nearly 70 per cent of small and medium-sized enterprises did not even know that the act was coming into effect in July. There is also much confusion about what the new law means, with 71 per cent of business owners saying they were not confident about how the act would affect their firms. Worryingly, nearly half of all respondents said they were "not confident all" about their understanding of its implications.

Maybe this is why half of those surveyed said they would not be changing their practices in response to the act. Elsewhere, there is a split between larger and smaller businesses when it comes to the potential implications on competitiveness.

For larger firms, fears that the legislation will make UK businesses less competitive internationally was one of the main concerns. However, 94 per cent of small and medium-sized firms did not think it would hold them back relative to global peers.

"We all want a level playing field when it comes to doing business in the UK," Sage UK's Matt Forrest said. "But what is absolutely clear from our research is that the UK small business community currently doesn't know what the Bribery Act means in terms of the way it does business."