Quarterly NAV and Dividend Announcement

RNS Number : 9029R

The MedicX Fund Limited

10 November 2011

 



For immediate release

10 November 2011

MedicX Fund Limited

("MedicX Fund", the "Fund" or the "Company" and together with its subsidiaries the "Group")

Unaudited adjusted net asset value as at 30 September 2011 and quarterly dividend

MedicX Fund Limited (LSE: MXF), the specialist primary care infrastructure investor in modern purpose-built primary healthcare properties in the United Kingdom, today announces the results of its quarterly portfolio valuation.

Valuation

The valuation of the portfolio undertaken by Jones Lang LaSalle LLP, independent valuers to the Company, as at 30 September 2011 stood at £241.0 million, reflecting a net initial yield of 5.84%.  This is an improvement from the net initial yield of 5.87% in June 2011, with values remaining firm reflecting the security of income underpinning properties within this sector.

Primary care properties have yet to see the full benefit of the increase in valuations seen within other prime property sectors.  Net initial yields for the IPD All Properties Index have moved by 18.6% from 7.65% at March 2009 to 6.23% at September 2011, compared with a 4.1% movement in the net initial yield for MedicX Fund from 6.09% to 5.84%, and contrasts to the 17.0% movement in the benchmark 20-year gilt rate from 4.26% to 3.54% over the same period.

Unaudited net asset value

Incorporating the September valuation, the unaudited adjusted net asset value at 30 September 2011 is estimated to be £126.9 million, equivalent to 65.9p per share. This compares with the adjusted net asset value at 30 September 2010 of 65.7p per share.  The adjusted net asset value is net assets excluding goodwill and deferred tax.

Long-term interest rates have decreased since 30 June 2011 and, including the benefit of the Fund's 30-year £100 million interest only debt facility at a fixed rate of 5.008%, the unaudited adjusted net asset value plus the mark to market benefit of fixed rate debt is estimated now to be £130.8 million, equivalent to 67.9p per share.

Discounted cash flow valuation of assets and debt

On the Fund's behalf the Investment Adviser has carried out a discounted cash flow ("DCF") valuation of the Group assets and associated debt at each period end.  At 30 September 2011, the DCF valuation was £169.9 million or 88.2p per share compared with £129.3 million or 91.5p per share at 30 September 2010.

The basis of preparation is similar to that calculated by infrastructure funds.  The values of each investment are derived from the present value of the property's expected future cash flows, after allowing for debt and taxation, using reasonable assumptions and forecasts based on the predominant lease at each property.  The total of the present values of each property and associated debt cash flows so calculated is then aggregated with the surplus cash position of the Group. 

The discount rates used are 7% for completed and occupied properties and 8% for properties under construction.  These represent 2.5% and 3.5% risk premiums to an assumed 4.5% long-term gilt rate.  The weighted average discount rate is 7.20%.

The discounted cash flows assume an average 2.5% per annum increase in individual property rents at their respective review dates.  Residual values continue to be based upon capital growth at 1% per annum from the current valuation until the expiry of leases, (when the properties are notionally sold), and also assuming the current level of borrowing facilities.

Investment activity

The portfolio, which consists of 63 properties, continues to perform in line with long term objectives.  Four new properties at Hirwaun, East Cowes, Corby Glen and Grangetown were added to the portfolio during the quarter ended 30 September 2011.  The completion of three properties at Halifax, Apsley and Bermondsey brings the total number of completed properties in the portfolio to 53.

Ten properties were under construction at Hounslow, Clapham, West Wirral, Woolwich Royal Arsenal, Raynes Park, Rochdale, Hirwaun, Corby Glen, East Cowes and Grangetown as at 30 September 2011.

Rent reviews

During the year to 30 September 2011, 33 leases and rents of £3.3 million were reviewed and the equivalent of a 2.3% per annum increase was achieved.  Of these reviews, 1.9% per annum was achieved on open market reviews, 4.3% on RPI based rental reviews, and 2.5% on fixed reviews.  Reviews of £4.1 million of passing rent are currently under negotiation.

Dividends

A quarterly dividend of 1.375p per ordinary share in respect of the period 1 April 2011 to 30 June 2011 was paid on 30 September 2011 to ordinary shareholders on the register as at close of business on 19 August 2011.

The Directors have approved a quarterly dividend of 1.375p per ordinary share in respect of the period 1 July 2011 to 30 September 2011.  The dividend will be paid on 30 December 2011 to ordinary shareholders on the register as at close of business on 18 November 2011 (the "Record Date").  The corresponding ex-dividend date will be 16 November 2011.  The dividends total 5.5p per ordinary share in respect of the financial year ending 30 September 2011, an increase from the dividends of 5.4p per ordinary share for the year to 30 September 2010.  This represents a dividend yield of 7.3% on the closing share price of 75.0p on 30 September 2011.

The Company is offering qualifying shareholders the opportunity to take new ordinary shares in the Company, credited as fully paid, in lieu of the cash dividend to be paid on 30 December 2011, by participating in the Scrip Dividend Scheme (the "Scheme") previously put in place by the Company on 5 May 2010.

The option to participate will be available to shareholders until 7 December 2011 (the "election date").  For further information on the Scheme, together with a copy of the Scheme Document (containing the terms and conditions of the Scheme) and relevant mandate forms, please refer to the Scrip Dividend portal on the Company's website.

Equity issues in the quarter

On 8 July 2011 the Company issued 1,500,000 new ordinary shares for cash at a price of 78.25 pence per share.  In addition, on 30 September 2011 the Company issued 133,981 shares pursuant to the Scrip Dividend Scheme, based on a scrip calculation price of 77.73 pence per share.

The total number of ordinary shares of the Company in issue is 192,604,010 with each share holding one voting right, compared with 141,317,110 ordinary shares at 30 September 2010.  No shares are held in treasury.

Issue date of results

MedicX Fund will announce its results for the year ended 30 September 2011 on
8 December 2011.

David Staples

Chairman

End

For further information please contact:

MedicX Group: Keith Maddin, Chairman Mike Adams, Chief Executive Officer Mark Osmond, Chief Financial Officer	[phone]
MedicX Fund: David Staples, Chairman	[phone]
Buchanan Communications: Charles Ryland/Suzanne Brocks	[phone]

Information on MedicX Fund Limited

MedicX Fund Limited ("MXF", the "Fund" or the "Company", or together with its subsidiaries, the "Group") is the specialist primary care infrastructure investor in modern, purpose-built primary healthcare properties in the United Kingdom, listed on the London Stock Exchange, with a portfolio comprising 63 properties.

The Investment Adviser to the Company is MedicX Adviser Ltd, which is authorised and regulated by the Financial Services Authority and is a subsidiary of the MedicX Group. The MedicX Group is a specialist investor, developer and manager of healthcare properties with 27 people operating across the UK.  

The Company's website address is www.medicxfund.com. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

END

 

 

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