Interim Management Statement

RNS Number : 8927L

The MedicX Fund Limited

16 August 2013

 



For immediate release

16 August 2013

MedicX Fund Limited

(the "Company")

Interim Management Statement

MedicX Fund Limited (LSE: MXF), the specialist primary care infrastructure investor in modern purpose-built primary healthcare properties in the United Kingdom, today announces its Interim Management Statement for the period from 1 April 2013 to today's date.

Financial position

The quarterly valuation of the portfolio undertaken by Jones Lang LaSalle LLP as at 30 June 2013 stood at £435.5 million reflecting a net initial yield of 5.79%.  The yield is unchanged from March 2013, and compares favourably with the weighted average fixed cost of debt drawn by the Company of 4.45%. 

Incorporating the June valuation, the unaudited adjusted net asset value as at 30 June 2013 is estimated to be £166.3 million, equivalent to 62.7p per share compared with 63.0p per share at 31 March 2013.  Long-term interest rates have increased since 31 March 2013 and, including the cost of the Company's fixed rate debt facilities, the unaudited adjusted net asset value plus the mark to market cost of fixed rate debt is estimated to be £182.7 million as at 30 June 2013, equivalent to 68.9p per share, compared with 63.6p per share at 31 March 2013. 

At 30 June 2013, the DCF valuation was £249.9 million or 94.2p per share, compared with £242.8 million or 92.9p per share as at 31 March 2013.  The weighted average discount rate is 7.13% which represents a 3.6% risk premium relative to the 20 year gilt rate as at 28 June 2013.

The shares of the Company have continued to perform well, with the closing mid-market share price at 28 June 2013 standing at 77.75p (source: Daily Official List).  This represents a total shareholder return for the nine months to 30 June 2013 as measured by dividends paid and share price growth of 7.2% or 5.5p per share.  The unaudited adjusted net asset value includes a provision equating to 0.4p per share for the potential performance fee that may be earned by MedicX Adviser Ltd (the "Investment Adviser") for the financial year ending 30 September 2013.  The performance fee equates to 15% of any excess return above a total shareholder return of 10% compounded annually from the high watermark set when a performance fee was last earned.

Aside from the significant investment in new acquisitions and the other matters disclosed below, there have been no significant changes to the financial position of the Company since the interim results were announced on 29 May 2013.

Investment activity

In the period since 1 April 2013, the Company has committed to £53.3 million of investments, being two further development properties and the acquisition of a property portfolio. The property portfolio was purchased on 24 May 2013 by way of a corporate acquisition for an initial cash consideration of £10.0 million and the assumption of existing debt facilities of £34.7 million and comprised seven completed properties and seven properties under construction. As part of this deal, the Company also negotiated a framework agreement with GPI, a leading healthcare developer, to give the Fund first right to forward fund future developments. The full details of this transaction may be found in the announcement released on 28 May 2013.

Since 1 April 2013, four properties under construction have been completed at Middlewich, Cambridge, Tooting and Scholar Green.  The properties at Caerphilly, Arnold, Maidstone, Shoreham, Felixstowe, Wiveliscombe, Grange over Sands, Potters Bar and Rugby were under construction during the period. In addition to these properties, two new projects at Wigston and Prenton started construction bringing the total number of properties under construction to eleven.  The property at Caerphilly is expected to complete before the end of September 2013, and the remainder are all due to complete in the next financial year.

The Lanark Road Medical Practice investment property at Maida Vale, London was sold during the period at a price of £2.1 million, above its 30 June 2013 valuation of £1.9 million.  The property was acquired as part of the portfolio acquisition in July 2012 and was one of the smallest properties in the portfolio.

The portfolio now consists of 122 properties and continues to perform in line with long-term objectives.

The Investment Adviser has access to a strong pipeline of £103 million in value when fully developed.

Rent reviews

Since 1 April 2013, 12 leases and rents of £0.8 million were reviewed and the equivalent of a 2.2% per annum increase was achieved.  This brings the result of reviews completed for the financial year to date to a 3.3% increase per annum, covering 26 leases and rents of £1.9 million.  Reviews of leases representing £8.8 million of passing rent are currently under negotiation.

Share issues

Two tap issues have been made since 1 April 2013 to satisfy the demand for shares in the Company.  A total of 7.3 million new ordinary shares of no par value have been issued at an average issue price of 78.49 pence per share.  The individual transactions are listed in a table below, and all of the shares were issued at a premium to the net asset value of the Company at the time of the transaction.  The proceeds will be used to further pursue the investment objectives of the Company.

Date of issue	Number of shares	Price per share
18 June 2013	3,600,000	79.0 pence
15 July 2013	3,700,000	78.0 pence
Total issued	7,300,000

In addition, on 28 June 2013 the Company sold 387,574 shares from treasury to satisfy demand pursuant to the Scrip Dividend Scheme, based on a scrip calculation price of 80.75 pence per share.

As at today's date the total number of ordinary shares of the Company in issue is 270,945,780 of which 1,974,283 shares are held in treasury, compared with 263,645,780 ordinary shares in issue at 31 March 2013 of which 2,361,857 shares were held in treasury.  Consequently the total voting rights in issue as at today's date are 268,971,497, compared with 261,283,923 as at 31 March 2013.

The announcement of the interim results on 29 May 2013 stated that the Board continued to assess the timing of a fundraising in light of the pace at which the Investment Adviser believed the pipeline would come to fruition.  With good visibility on the current pipeline, the Board now expects the Company to undertake a fundraising in the Autumn.

Debt facilities

As at 30 June 2013 the Company had access to debt facilities with a weighted average fixed cost of 4.45% including undrawn amounts, with an average remaining term of 16.8 years. 

New debt facilities of £34.7 million from Aviva were acquired as part of the corporate acquisition announced on 28 May 2013 which have a remaining term of 21.1 years, and of which £13.3 million remains to be drawn.  The weighted average fixed interest rate of the acquired facilities was 4.47%, and these are viewed as being complementary to the existing debt facilities.

Dividends

On 28 June 2013, a quarterly dividend of 1.425p per ordinary share in respect of the period 1 January 2013 to 31 March 2013 was paid to ordinary shareholders on the register as at close of business on 17 May 2013.

On 7 August 2013, the Directors approved a quarterly dividend of 1.425p per ordinary share in respect of the period 1 April 2013 to 30 June 2013.  The dividend will be paid on 30 September 2013 to ordinary shareholders on the register as at the close of business on 16 August 2013.  Shareholders will be offered the opportunity to take ordinary shares in the Company in lieu of receiving a cash payment under the Scrip Dividend Scheme previously put in place by the Company on 5 May 2010.

In line with the Company's progressive dividend policy of growing the dividends throughout the life of the Company, the Directors expect, subject to unforeseen circumstances and the Company's financial position, to pay dividends totalling 5.7p per Ordinary share in respect of the financial year ending 30 September 2013, an increase of 1.8% on the total dividend declared for the previous financial year. Based upon the current share price of 77.75p, this represents a dividend yield of 7.3%. 

David Staples

Chairman

End

For further information please contact:

MedicX Group:                                                              [phone]

Keith Maddin, Chairman

Mike Adams, Chief Executive Officer

Mark Osmond, Chief Financial Officer

MedicX Fund:                                                                [phone]

David Staples, Chairman

Buchanan Communications:                                            [phone]

Charles Ryland/Sophie McNulty

Information on MedicX Fund Limited

MedicX Fund Limited the ("Company") is the specialist primary care infrastructure investor in modern, purpose-built primary healthcare properties in the United Kingdom, listed on the Main Market of the London Stock Exchange, with a portfolio comprising 122 properties.

The Investment Adviser to the Company is MedicX Adviser Ltd, which is authorised and regulated by the Financial Conduct Authority and is a subsidiary of the MedicX Group. The MedicX Group is a specialist investor, developer and manager of healthcare properties with 29 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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