Alistair Houghton meets NIGEL RAWLINGS,chief executive of Assura in Warrington

FROM his office at the heart of the former Greenalls empire, Nigel Rawlings is brewing up plans for growth.

Rawlings took charge of Assura a year ago this month after the Warrington group restructured to focus on its core activities – building and running medical centres and pharmacies.

Since then Rawlings, a keen half-marathon runner who has been with the company since it was founded in 2003, has nursed it back to health. It has seen improved financial results, with shareholders set to receive dividends for the first time since 2008.

In January Assura announced it was buying AH Medical Properties (AHMP) for £28.3m, adding another 52 medical centres to its portfolio.

It now has a portfolio of 165 such centres, valued at £500m, with another seven in development.

Assura operates 34 pharmacies, bringing in annual revenues of more than £30m.

And it invests in six NHS Local Improvement Finance Trust (LIFT) companies, the public-private bodies charged with developing new healthcare facilities in their areas. It is among the investors in the Liverpool and Sefton Health Partnership.

Private involvement in the NHS, the sacred cow of the public sector, is always controversial. But Rawlings is quietly adamant that without the backing of private firms such as Assura, the NHS would have seen much less investment in new facilities in recent years.

He said: “It’s important that premises provision, which is very capital-intensive, involves the private sector rather than the public purse because of the high cost involved.

“When we develop medical centres, we raise the money from either our shareholders or banks, but we’re investing that money in facilities for the NHS to treat patients in the community.

“The money has to be found from somewhere – we can raise it from our banks and shareholders. We have continued to develop medical centres through the credit crunch.”

Rawlings trained as an accountant with Price Waterhouse, working in Manchester, London and Singapore.

In 1987 he became finance director of listed property and contracting group Rowlinson Securities, before moving to property investor Barlows in 1996. In 2002, Rawlings became chief financial officer of investor Westbury Property Fund.

“I didn’t set out to be a property expert,” he said, “but my first role after Price Waterhouse was in property, and that’s just continued.”

It was at Westbury that property investor Peter Dickson approached him and Richard Burrell about a portfolio of medical centres that was up for sale.

Rawlings said: “The three of us realised that was a good opportunity to launch a specialist fund rather than just include them in a commercial property fund.”

That led to the creation of the Medical Property Fund (MPF) in 2003 – the company that later changed its name to Assura. Rawlings became chief financial officer of MPF, which was based in Chester, and continued in his role at Westbury.

“For a while, I was looking after two public companies,” he smiled.

Westbury’s investments included Weston Point docks in Runcorn. The group also began working with Widnes-based freight handling firm O’Connors to develop a rail freight handling terminal at the Mersey Multimodal Gateway site in Widnes.

But the Westbury name disappeared in 2007 with one of the most high-profile deals in the North West’s recent business history.

Westbury bought road haulier Eddie Stobart for £138m, and bought O’Connors for £23m, to create the Stobart Group. Stobart was to drive ahead with logistics and property developments, leaving Assura to focus on the medical sector.

Assura’s core business remains building medical centres, which house GPs and other outpatient healthcare services.

In 2005, Assura expanded into the pharmacy business. Its pharmacies include one in Ropewalks, Liverpool, and another in West Everton.

As well as its investment in LSHP in Merseyside, Assura invests in LIFTs in London, the West Midlands, Hampshire and Essex.

Each “LIFTCo” is 40% owned by the NHS and 60% owned by private investors. The other investors in Liverpool are building services group Bilfinger Berger and developers Galliford Try and Sapphire Primary Care.

LSHP owns 10 buildings, nine of which it developed. Its first project was the Ainsdale Centre for Health, while its other projects include Litherland Town Hall Health Centre and the Southport Centre for Health and Wellbeing.

Four more medical centres are under construction, including an £8m centre at Childwall Fiveways.

The next development for Assura was Assura Medical, which provided healthcare services in partnership with GPs. But that business proved a drain on Assura’s resources.

Last year Sir Richard Branson’s Virgin group bought 75.1% of the business, leaving Assura with 24.9%.

“We were diverting resources into what was a complicated business,” said Rawlings.

“It was fast-growing. There were 30 joint ventures with GPs around the country, serving a population of 3m people registered with those GPs.

“But it needed the backing of a bigger partner who could take a long-term view.

“We have been able to reduce our overhead costs considerably as a result of that. Unfortunately, there were some redundancies.

“Assura Medical is continuing to grow. But it is continuing to be loss-making and will take time before it is profitable.”

With the sale of Assura Medical, Rawlings took over from Burrell as group chief executive. The smaller group then moved from Daresbury to its current home in Warrington.

At its heart is an open-plan office carved out of the former Greenalls brewery, whose bare brick walls and exposed steelwork give it the feel of a trendy New York loft conversion.

But rather than hiding themselves in trendy brick-lined offices, Rawlings and his directors sit at the banks of desks alongside their staff.

Today Assura employs 360 people, with 300 at its pharmacy chain, 25 in a Birmingham office and the remainder in Warrington.

Rawlings is bullish about Assura’s prospects. The company, he says, remains an attractive investment.

He said: “GPs have their rent reimbursed in the NHS budget – 87% of our rents come from the NHS. The rental covenant is strong.

“The average lease length on our portfolio is 17 years. That’s quite unusual – a normal commercial property portfolio will have an average lease length of half that.

“That all means we are attractive to lenders even in a credit crunch.”

Rawlings also credits Assura’s “very supportive shareholders” – citing their support for the AHMP deal.

“Our fundraising was oversubscribed,” he said. “There were some new shareholders, as well as existing ones, who came in for the fundraising.”

With the NHS sheltered from the worst of the public sector cuts, Rawlings hopes that there will still be a demand for new medical centres such as those provided by Assura or by LIFTs.

He also hopes Assura will benefit if the Government succeeds in its bid to devolve more power to GP.

But Rawlings said any delay over reforming the NHS could see private investors shy away.

“We’ve got a good pipeline of medical properties coming through,” he said. “It’s helpful because there will be a hiatus while PCTs are abolished.

“One thing we are concerned about is how long the uncertainty prevails for. The sooner the NHS settles down and the Health Bill is fully enacted and actioned, the better.

“The private sector cannot invest in a background of uncertainty.”

Once out of his open plan office, Rawlings loves nothing better than getting in training for his exhausting hobby – running half marathons.

He completed 13 races in 2010 – an amazing achievement for someone who had never run a road race until 2009.

Asked why he decided to start such an ambitious racing regime, he simply smiled: “I just met some runners.

“I found it’s like being a kid again. You go off running, and then have a few drinks afterwards in the bar. It’s just good, clean, healthy business – apart from the rehydration after.

“I’m not fanatical – I don’t do them fast.”