Interim Results

RNS Number : 2464V

The MedicX Fund Limited

27 May 2008

 



For Immediate Release                                                                                                                                            27 May 2008

MedicX Fund Limited

('MedicX Fund', 'the Fund' or 'the Company')

Interim results for the six months ended 31 March 2008

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 results for the six months ended 31 March 2008.    

Interim Highlights

Investments

• Successfully delivering investment strategy of investing in modern purpose-built primary healthcare properties

• £157.6m of committed investment in 44 primary healthcare properties at a cash yield of 5.60% including new committed investment during the period of £18.2m1,2  

• Annualised rent roll of £9.1m and 4.5% per annum increase for rent reviews agreed in the period1

• Four properties under construction completed during the period

• Acquisitions of £12.0m agreed at a cash yield of 5.80% being finalised by solicitors

• More opportunities for further investment on favourable terms now evident due to current market conditions

• £140m pipeline of further opportunities1

Financial results

• Adjusted net asset value of £66.1m equivalent to 83.1p per share (30 September 2007: £77.2m; 96.9p per share) reflecting a thirty-five basis points shift in net initial yield to 5.56%3

• Adjusted net asset value plus the estimated mark to market benefit of debt of £71.9m equivalent to 90.4p per share (30 September 2007: £85.7m; 107.6p per share)3

• Discounted cash flow net asset value of £87.7m equivalent to 110.2p per share (30 September 2007: £87.5m; 109.9p per share)

• Adjusted earnings of £0.3m excluding revaluation impact equivalent to 0.4p per share (31 March 2007: £0.1m; 0.1p per share)3,4

• Dividend of 2.6p per share, an increase of 4% compared with the previous year's interim dividend (RPI growth for year to 31 March 2008 3.8%)5

 Funding

• Conversion of C shares to ordinary shares on 12 December 2007 at the ratio of one ordinary share for each C share; total net equity raised since IPO £77.7m

• Net debt £64.6m (47.3% adjusted gearing3)

• £100m Norwich Union 5.0% fixed rate, 30 year interest only, loan now fully committed 

Overheads

• Targeting reduction in overhead base of 50% 

Commenting on the interim results and the outlook Jorge Tavares, Chairman, said 'The NHS continues to focus on the modernisation of primary care and the co-location of medical services in larger multi-service health centres or polyclinics.  This is very much in line with the MedicX Fund's investment strategy of investing in modern purpose-built primary healthcare properties that are expected to serve the long term healthcare needs of communities.

Primary care infrastructure with its long term secure cash flow offers defensive characteristics that in the current economic climate represent a particularly attractive long term investment proposition. With its high quality portfolio and forward pipeline of acquisition opportunities at attractive prices the MedicX Fund is well positioned to deliver progressive long term returns to shareholders.'

Contacts for the Investment Adviser on behalf of the Board:

Keith Maddin [phone]

Mike Adams  [phone]

Contacts for Buchanan Communications:

Charles Ryland / Lisa Baderoon / Mary-Jane Johnson [phone]

Information on MedicX Fund Limited

MedicX Fund Limited ('MXF', the 'Fund' or the 'Company', or together with its subsidiaries, the 'Group') the specialist primary care infrastructure investor in modern purpose-built primary healthcare properties in the United Kingdom, listed on the London Stock Exchange in November 2006. It has committed investment of £157.6 million and a portfolio of 44 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 primary healthcare properties with 32 people operating across 4 offices.

The Company's website address is www.medicxfund.com

1 As at 27 May 2008; completed properties and properties under construction

2 Net rents divided by total acquisition price and costs; cash yield on gross rents 5.77%

3 Adjusted to exclude goodwill and the impact of deferred tax not expected to crystallise

4 Revaluation impact including £0.5m prepayment write off 

5 Ex dividend date 11 June 2008, Record date 13 June 2008, Payment date 11 July 2008

Chairman's Statement

I am pleased to present this second interim report, on behalf of the Board.

Overview financial results 

The Group's adjusted net asset value at 31 March 2008 was £66.1 million, equivalent to 83.1p per share3, a decrease of 13.8p per share from 30 September 2007.  

Primary care valuations have been impacted by a continued softening of asset prices in the general commercial property markets. The property valuations carried out by King Sturge LLP, the Group's valuer, and adopted in the adjusted net asset value reflect a yield shift of approximately thirty-five basis points during the period to a net initial yield of 5.56%.  

The mark to market benefit of the Group's fixed rate debt as at 31 March 2008 is estimated at £5.8 million or 7.3p per share which has not been included in the adjusted net asset value3. The adjusted net asset value plus the estimated mark to market benefit of debt is therefore £71.9 million, equivalent to 90.4p per share (30 September 2007: £85.7m; 107.6p per share).  

The net asset value calculated based upon a discounted cash flow analysis of the Group's investments as at 31 March 2008 has increased from 30 September 2007 by 0.3p per share to 110.2p per share. 

For the period to 31 March 2008, the Group reports adjusted earnings of £0.3m excluding the revaluation impact equivalent to 0.4p per share and up from £0.1m or 0.1p for the period to 31 March 20073,4. The adjusted loss including revaluation impact is £8.7 million, equivalent to 10.9p per share (31 March 2007: earnings of £4.0 million; 7.0p per share)3.   

Dividend

The Directors have approved an interim dividend of 2.6p per ordinary share, an increase of 4% compared to the previous year's interim dividend and just above the increase in the Retail Price Index over the same period.  This is in line with the Fund's investment objective of targeting a progressive long term return.  The dividend will be paid on 11 July 2008 to ordinary shareholders on the register as at 13 June 2008.

Investments

The Group now has committed investment of £157.6 million across 44 properties. Further acquisitions of £12.0m have been agreed and are being finalised by solicitors. There are no material operational or financial issues to report regarding the portfolio properties which continue to perform in line with our long term objectives.  

The Group, through the Investment Adviser, is seeing more opportunities for further investment on favourable terms due to current market conditions.

Funding

As previously announced, the C shares converted to ordinary shares on 12 December 2007 at a Conversion Ratio of 1.0000 ordinary shares for each C share held. 

As at 31 March 2008, the Group had net debt of £64.6 million (30 September 2007: £52.4 million) equating to 47.3% of the adjusted gross asset value excluding cash reported on a consolidated basis and under International Financial Reporting Standards3.  The £100 million Norwich Union 5.0% fixed rate, 30 year interest-only, loan has now been fully committed.  

Valuation

Primary care valuations have been impacted, although to a lesser extent, by a continued softening of asset prices in the general commercial property markets.  The individual property valuations carried out by King Sturge LLP, the Group's valuer, and adopted in the adjusted net asset value reflect a yield shift of approximately thirty-five basis points during the period to a net initial yield of 5.56%.  

The adjusted net asset value plus the estimated mark to market benefit of debt is £71.9 million, equivalent to 90.4p per share (30 September 2007: £85.7m; 107.6p per share).  The benchmark gilt rate for the Group's £100 million, fixed rate, loan has increased since the period end and the estimated mark to market benefit of the debt currently is £10.0m or 12.5p per share and therefore the adjusted net asset value plus the estimated mark to market benefit of debt is £76.1m or £95.6p3.  No benefit is included here in respect of widening of bank lending margins as a result of the credit crunch.

The Investment Adviser has again produced a discounted cash flow valuation of the Group's investments as at 31 March 2008. The Directors have satisfied themselves on the valuation methodology and the discount rates used.  The Group's discounted cash flow net asset value, the recognised measure of asset values for infrastructure funds, shows an increase to 110.2p per share even after allowing for the impact of property revaluation and dividends paid.

At the date of this report the Fund's share price stood at 88.25p, a premium of 6% to the adjusted net asset value of 83.1p per share and 13% up on the 77.5p share price last December prior to the announcement of our first year's results. However, this still represents a discount of 20% against the discounted cash flow net asset value of 110.2p per share.  

Overhead reduction 

With effect from 1 April 2008, the Investment Adviser has taken over the accounting of the Group and has agreed to absorb the costs within its existing fees. This action together with other overhead savings is targeted to reduce overheads by 50% to £600,000 per annum.

Outlook

Primary care infrastructure with its secure long term cash flow offers defensive characteristics that in the current economic climate represent a particularly attractive long term investment proposition.  With its high quality portfolio and forward pipeline of acquisition opportunities at attractive prices the MedicX Fund is well positioned to deliver progressive long term returns to shareholders.

Jorge Tavares

Chairman

27 May 2008 

Report of the Investment Adviser

Market

The NHS continues to focus on the modernisation of primary care and the co-location of medical services in larger multi-service healthcare centres or polyclinics. Lord Darzi's 'NHS Next Stage Review' final report is expected in June 2008. This report will summarise a nationwide review of the NHS Plan and its effects on the development of primary care in the UK. It is expected to underline the need for continued modernisation and reform of GP services, and will emphasise the need for co-location of medical services in the community. 

There is evidence that many of the funding blockages that we have seen in certain areas of the United Kingdom will begin to ease as many of the recently reorganised Primary Care Trusts begin to implement their new strategies. Although these changes have taken longer than expected to materialise there has been a definite increase in activity over the past three months. This is likely to lead to an improvement in flow of new high quality primary care buildings.

The market continues to place a greater value on the larger modern purpose-built healthcare centres. These buildings are being built to higher standards of design and offer an increased level of flexibility. This will enable them to evolve to meet the clinical need as services change in the future. This is very much in line with the investment strategy of the MedicX Fund.

In the investment market there remains strong demand for quality product at the current valuation level given the long term secure cash flow and growth potential provided by this sector, and the softening of yields in the investment market offers the opportunity to acquire investments at attractive prices.  

Portfolio update

The MedicX Fund has committed investment of £157.6 million at today's date in 44 primary healthcare properties at a cash yield of 5.60%2. The annualised rent roll of the portfolio properties is £9.1 million1.

As at 31 March 2008, the portfolio properties had an average age of 3.1 years, remaining lease length of 20.3 years and an average value of £3.4 million. Of the rents payable 92% are from government-funded doctors and Primary Care Trusts/Local Health Boards, 5% from pharmacies and 3% from other parties.

Four properties under development, at Wollaton, Evesham, Rothwell and Warwick, were successfully completed during the period. Forward funding arrangements have been entered into during the period for construction of properties at Gosberton, Castlecroft and Lytham for a total investment of £18.2m. Two further acquisitions totalling £12.0m have been agreed at a cash yield of 5.80% and are currently being finalised by solicitors.  

Following the period end the Fund completed the sale of the Aird Medical Centre, Beauly for £1.37 million. The property was one of the smaller and older properties in the portfolio. The sale price exceeded the valuation by DTZ Debenham Tie Leung of £1.33 million at 30 September 2007 and demonstrates the attractiveness of the asset class to investors. Further selective disposals will be targeted where properties do not match the long term strategy of focusing on the larger, modern purpose-built properties. 

Asset management

During the period to 31 March 2008 nine rent reviews were completed, adding £56,000 to the rent roll, representing average increases in rent (as a percentage of passing rent) of 14.2% equating to 4.5% per annum. Passing rents of £1,434,000 are currently under negotiation.

Asset management opportunities have also been identified in respect of a number of the properties in the portfolio with benefits expected to start to be realised before the year end.  

The roll out of enhanced services offering is progressing supported by Gleeds for facilities management, and the first enhanced services contract has been agreed at Lytham Primary Care Centre. The Investment Adviser has also, where possible, pooled insurance arrangements across properties and realised insurance savings of 30%. 

Pipeline and investment opportunity

MedicX Fund has forward funding agreements in place with Primary Asset Ltd, the development arm of the MedicX Group, and with primary care developers Oakapple and Medcentres, providing the MedicX Fund with a continuing pipeline of opportunities. In addition, the Investment Adviser has established relationships with a number of other developers in the sector as well as sector specialist agents that are providing a pipeline of opportunities for the MedicX Fund.

The Investment Adviser has access to a pipeline, subject to contract, which is estimated to be worth approximately £140 million in value when fully developed, including MedicX Group's own pipeline of projects with a value of approximately £70 million.  

Valuation

Primary care valuations have been impacted by a continued softening of asset prices in the general commercial property markets. The property valuations carried out by King Sturge LLP, the Fund's valuer, and adopted in the adjusted net asset value reflect a yield shift of approximately thirty-five basis points during the period to a net initial yield of 5.56% and by fifty-five basis points in the year from 5.01%.  

The yield shift comes despite the long term secure income, typical three yearly effective upward only rent reviews and lack of voids in the MedicX Fund portfolio, but compares favourably to the eighty-seven basis points movement over the year in the IPD All Property Index net initial yield from 4.58% to 5.45%6.  

The Investment Adviser, on the Fund's behalf, has separately carried out a discounted cash flow valuation of the Group's investments as at 31 March 2008. The valuation has been prepared in a similar way to other quoted infrastructure funds.

The discount rates used for valuing the projects in the portfolio are 7% for completed and occupied properties and 8% for properties under construction. There has been no change in these discount rate assumptions over the period. These represent 2.5% - 3.5% risk premiums to an assumed 4.5% long term gilt rate. The weighted average discount rate is 7.18% representing a slight reduction over the period from 7.22% and reflecting the increase in the proportion of completed properties in the portfolio.  

The discounted cash flows assume an average 3% per annum increase in individual property rents at their respective review dates, residual values based upon capital growth at 1% per annum from current valuation until the expiry of leases and 65% gearing of assets.

The Fund's portfolio was valued on a discounted cashflow basis as at 31 March 2008 at £87.7 million or 110.2p per share compared with £87.5 million or 109.9p per share as at 30 September 2007. The increase of 0.3p per share is after a 2.5p dividend payment and 4.6p per share reduction due to the impact of property revaluation.

Investment Adviser developments

In November 2007, MedicX Adviser obtained authorisation from the Financial Services Authority to expand upon the property advisory services provided to the MedicX Fund to include the following regulated activities: promotion, provision of fund management and corporate investment advice. As a result of these changes MedicX Adviser is now referred to as the Investment Adviser.  

MedicX Group as a whole has 32 people, and has offices in Godalming, Nottingham, Warrington and Edinburgh.

In order to reduce any cash drag the Investment Adviser agreed to exclude cash from the calculation of gross assets for fee purposes with effect from 1 October 2007.  

The MedicX Group acquired 600,000 shares of MedicX Fund in January 2008.  

With effect from 1 April 2008, the Investment Adviser has taken over the accounting of the Fund and has agreed to absorb the costs within its existing fees. This together with other overhead savings is targeted to reduce the Fund's overheads by 50% to £600,000 per annum.

Keith Maddin   Chairman

Mike Adams    Chief Executive Officer

MedicX Adviser Ltd

1 As at 27 May 2008; completed properties and properties under construction

2 Net rents divided by total acquisition price and costs; cash yield on gross rents 5.77%

3 Adjusted to exclude goodwill and the impact of deferred tax not expected to crystallise

4 Revaluation impact including £0.5m prepayment write off

5 Ex dividend date 11 June 2008, Record date 13 June 2008, Payment date 11 July 2008

6 March 2008 IPD

Consolidated Income Statement For the six months ended 31 March 2008
		Six months ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
	Notes	£'000	£'000
Income
Rent receivable	2	3,689	1,846
Finance income	2	1,221	979
Net valuation (losses)/gains on investment properties	9	(7,637)	4,079
Total income		(2,727)	6,904
Expenses
Investment advisory fee	19	1,138	728
Property management fee	19	104	24
Administrative fees	19	244	57
Audit fees		50	10
Professional fees		122	54
Directors' fees	3	76	100
Other expenses		744	130
Finance costs	5	2,556	1,641
Provision for impairment of properties under construction	9	856	172
Total expenses		5,890	2,916
(Loss)/profit before tax		(8,617)	3,988
Taxation	6	1,188	(636)
(Loss)/profit after taxation		(7,429)	3,352
Earnings per ordinary share
Basic and diluted	7	(9.3)p	8.7p

1. Included in Note 7 is an adjusted earnings per share calculation that adjusts for the impact of deferred tax which, based on the expected manner of realisation of the carrying amount of investment properties, is unlikely to crystallise.

2. The date on which the Company's ordinary shares were listed on the London Stock Exchange was 2 November 2006 and there were no material transactions between the date of incorporation, 25 August 2006, and 1 November 2006.

The financial statements should be read in conjunction with the accompanying notes.

Consolidated Balance Sheet as at 31 March 2008			Restated
		31 March 2008	30 September 2007
	Notes	£'000	£'000
Non-current assets
Goodwill	8	9,659	9,283
Investment properties	9	122,720	112,325
Properties under construction	9	11,080	19,569
Total non-current assets		143,459	141,177
Current assets
Trade and other receivables	10	2,873	2,983
Cash and cash equivalents		36,548	48,825
Total current assets		39,421	51,808
Total assets		182,880	192,985
Current liabilities
Trade and other payables	11	7,268	6,704
Non-current liabilities
Long-term loan	12	99,807	99,816
Deferred tax provision	6	8,442	9,682
Total non-current liabilities		108,249	109,498
Total liabilities		115,517	116,202
Net assets		67,363	76,783
Equity
Share capital	13	-	-
Share premium	14	1,585	1,585
Distributable reserves		72,693	74,684
Retained earnings		(6,915)	514
Total equity		67,363	76,783
Net asset value per ordinary share Ordinary - Basic and diluted	7	84.6p	96.3p
C - Basic and diluted	7	-	96.8p

1. Included in Note 7 is an adjusted net asset value per share calculation that adjusts for the impact of deferred tax which based on the expected manner of realisation of the carrying amount of investment properties, is unlikely to crystallise.

The financial statements should be read in conjunction with the accompanying notes.

Consolidated Statement of Changes in Equity 

for the six months ended 31 March 2008

	Share Premium £'000	Distributable Reserve £'000	Retained Earnings £'000	Total £'000
Proceeds on issue of shares	57,550	-	-	57,550
Share issue costs	(1,314)	-	-	(1,314)
Transfer from share premium	(54,651)	54,651	-	-
Profit attributable to equity holders	-	-	3,352	3,352
Balance at 31 March 2007	1,585	54,651	3,352	59,588
Balance at 1 October 2007	1,585	74,684	514	76,783
(Loss) attributable to equity holders	-	-	(7,429)	(7,429)
Dividend paid (note 21)	-	(1,991)	-	(1,991)
Balance at 31 March 2008	1,585	72,693	(6,915)	67,363

The financial statements should be read in conjunction with the accompanying notes.

Consolidated Cash Flow Statement 

for the six months ended 31 March 2008

		Period ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
	Notes	£'000	£'000
Operating activities
(Loss)/profit before taxation		(8,617)	3,988
Adjustments for:
Net valuation losses/(gains) on investment property		8,493	(3,907)
Financial income received		(1,221)	(979)
Finance costs paid and similar charges		2,556	1,641
		1,211	743
Decrease/(increase) in trade and other receivables		138	(2,499)
Increase in trade and other payables		538	3,029
Acquisition goodwill adjustment		(158)	-
Interest paid		(2,567)	(584)
Interest received		1,230	979
Tax paid		(52)	-
Net cash inflow from operating activities		340	1,668
Investing activities
Acquisitions net of cash acquired	16	(218)	(11,279)
Purchase of investment properties		(12,507)	(27,510)
Proceeds from disposal of investment properties		2,108	-
Net cash outflow from investing activities		(10,617)	(38,789)
Financing activities
Net proceeds from issue of share capital Bank loans repaid on acquisition Other loan repaid on acquisition		- - -	54,647 (36,439) (41,359)
Net proceeds of long term borrowings		(9)	101,252
Dividend paid		(1,991)	-
Net cash (outflow)/inflow from financing activities		(2,000)	78,101
(Decrease)/increase in cash and cash equivalents		(12,277)	40,980
Cash and cash equivalents at 1 October 2007/25 August 2006		48,825	-
Cash and cash equivalents at 31 March 2008/2007	16	36,548	40,980

The financial statements should be read in conjunction with the accompanying notes.

1. Business and objective

MedicX Fund Limited was incorporated in Guernsey on 25 August 2006 and commenced trading on 2 November 2006 on listing on the London Stock Exchange. No material transactions took place between the date of incorporation and the date of listing.

MedicX Fund Limited ('the Company') and its subsidiaries (together 'the Group') have been established for the purpose of investing in primary healthcare properties in the United Kingdom. The Group's investment objective is to achieve rising rental income and capital growth from the ownership of a portfolio of mainly modern, purpose built, primary healthcare properties. The Group is self-managed with property advice and management services from MedicX Adviser Ltd, a member of the MedicX Group, an independent group of companies which is a specialist developer of, investor in, and manager of primary healthcare properties.

The Company's investment policy is to acquire primary healthcare properties in the United Kingdom, some of which may have potential for enhancement, which will be sourced in the market by MedicX Adviser Ltd, including properties forming part of the MedicX Group's own pipeline of development and investment opportunities. 

2. Principal accounting policies

Basis of preparation and statement of compliance

The interim financial statements of the Group have been prepared in accordance with IAS 34 'Interim Financial Reporting' and the Disclosure and Transparency Rules of the United Kingdom Financial Services Authority.

The same accounting policies, presentation and methods of computation have been followed in the financial statements as were applied in the latest annual audited financial statements for the period ended 30 September 2007.

In the current financial year, the company will adopt International Financial Reporting Standard 7 'Financial Instruments Disclosures' (IFRS 7) for the first time. As IFRS 7 is a disclosure standard there is no change in accounting policy on these interim financial statements.

The financial statements have been prepared on a going concern basis. The principal accounting policies are set out below.

Basis of consolidation

The Group interim financial statements consolidate the financial statements of MedicX Fund Limited and entities controlled by the Company (its subsidiary undertakings) made up to 31 March 2008. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to benefit from its activities. The results of subsidiaries acquired during the period are included in the consolidated income statement from the effective date of acquisition. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values at the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquired company, plus any costs directly attributable to the business combination. The acquired companies' assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date. The details of the companies acquired and how they have been treated are dealt with in Note 15.

Change of comparative amounts

As reported in the statutory financial statements for the period ended 30 September 2007 and shown in note 15, the group made several significant acquisitions of property groups which included both completed investment properties, many of which had been developed several years prior to acquisition, and properties in the course of construction. Due to the specialist nature of the properties acquired and limited availability of build cost details at the time of acquisition, it was necessary, when initially accounting for the acquisitions, to make provisional estimates of the latent gains attributable to and the capital allowance capacity of those properties held by the Group's UK companies. On acquisition, the Board commissioned an expert detailed review of the tax position of the group's acquired companies with one of the principal objectives being to calculate the latent gain position as at the date of acquisition.

It has taken a considerable amount of time to retrieve and analyse the underlying building costs and previously submitted tax computations and, as a consequence, the review was not completed until early May 2008. The results of the detailed review indicate that the tax due on the latent gains which existed at the date of acquisition is £3,330,000 higher than previously reported. As the increase in latent gain relates entirely to conditions which existed at the date of acquisition of the UK companies, this impacts equally on the amount of deferred tax liability and goodwill recognised when accounting for the business combinations. In accordance with International Financial Reporting Standards, the comparative figures for both goodwill and deferred tax have been restated accordingly by £3,330,000. There has been no impact on net assets or the results reported in either the audited financial statements for the period ended 30 September 2007 or these interim financial statements.

Segmental reporting 

The Directors are of the opinion that the Group is engaged in a single segment of business, being investment in primary healthcare properties in the United Kingdom.

Revenue recognition

Rental income exclusive of any value added taxes is included in the interim financial statements on an accruals basis and is shown gross of any UK income tax. Finance income and fees receivable are included in financial statements on an accruals basis.

Expenses 

All expenses are accounted for on an accruals basis.

Employees

The Company has no employees.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the period.

Deferred tax is the tax which may become payable or recoverable on differences between the carrying amount of assets and liabilities in the interim financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Goodwill

Goodwill arising on acquisition is accounted for as the difference between the fair value of the consideration given and the fair value of the Group share of identifiable net assets of the subsidiary acquired. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill arising on acquisition has an indefinite useful life and is subject to annual review for any impairment. Goodwill is allocated to the appropriate cash generating unit. The recoverable amount is the higher of the fair value less the costs to sell and the value in use.

Investment properties

The Group's completed properties are held for long-term investment. Freehold properties are initially recognised at cost, being fair value of consideration given including transaction costs associated with the property. After initial recognition, freehold properties are measured at fair value, with unrealised gains and losses recognised in the consolidated income statement. Both the base costs and valuations take account of integral core fixtures and fittings. Fair value is based upon the open market valuations of the properties as provided by King Sturge LLP, a firm of independent chartered surveyors, as at the balance sheet date.

Long leasehold properties are accounted for as freehold properties and, after initial recognition at cost, are measured at fair value (on the same basis as freehold properties above).

Properties under construction

Freehold properties under construction are valued at cost until such time as a certificate of practical completion has been issued from which date they are treated as Investment Properties as set out above. At each balance sheet date an assessment is made of whether provision is required to reflect any impairment in the value of development work in progress. Any impairment is taken to the consolidated income statement. This assessment is based on whether the costs to date plus estimated future costs to completion exceed an independent valuer's estimate of the value of the property following completion. Costs of financing development are capitalised and included in the cost of development. During the period there were no material borrowing costs on development work in progress and none were capitalised. 

Derivative financial instruments and hedging activities

The Group has no derivative financial instruments.

Cash and cash equivalents

Cash on hand and deposits in banks are carried at cost. Cash and cash equivalents are defined as cash in hand, demand deposits, and highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value. For the purposes of the Consolidated Cash Flow Statement, cash and cash equivalents consist of cash in hand and deposits in banks.

Trade and other receivables

Trade and other receivables are measured at initial recognition at their invoiced value inclusive of any value added taxes that may be applicable. Provision is made for any doubtful debts which are not deemed recoverable.

Trade and other payables

Trade and other payables are recognised and carried at their invoiced value inclusive of any value added taxes that may be applicable.

Bank loans and borrowings

All bank loans and borrowings are initially recognised at cost, being fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost. Amortised cost is calculated by taking into account any discount or premium on settlement.

Borrowing costs

Borrowing costs are taken to the consolidated income statement in the period to which they relate on an accruals basis.

Use of estimates

In the process of applying the Company's accounting policies described above, management is required to make certain judgements and estimates to arrive at fair carrying value for its assets and liabilities. Significant areas requiring management's judgement include the fair value of the assets and liabilities of subsidiaries acquired and the assessment of the fair value of development work in progress described above. The valuations are performed by a firm of independent chartered surveyors applying current Appraisal and Valuation Standards of The Royal Institution of Chartered Surveyors.

3. Directors' fees

	Six months ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
	£'000	£'000
During the period each of the Directors received the following fees:
J M S Tavares	24	29
S Mason	13	20
C Bennett	13	17
A Simpson	13	17
J Hearle	13	17
	76	100

4. Audit fees

The amount disclosed in the consolidated income statement relates to an accrual for audit fees for the period ending on 31 March 2008, payable to PKF (Guernsey) Limited.

Non-audit fees paid to PKF (UK) LLP, a fellow member of PKF International, include the following amounts:

	Six months ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
	£'000	£'000
Completing financial due diligence on the acquisition of subsidiaries and included in the cost of purchase	-	95
For acting as reporting accountants in respect of the initial listing and set off against share premium		50
	-
For acting as reporting accountants in respect of the 'C' Share issue and included in other debtors and prepayments	-	55
For acting as auditors for the non-statutory audit in respect of the 'C' Share issue and included in other debtors and prepayments	-	26
Other professional services including tax advice	46	22
	46	248

5. Finance costs

	Six months ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
	£'000	£'000
Interest payable on long term loan	2,556	1,641

6. Taxation

	£'000	£'000
Current Tax
Corporate tax charge for the period	52	-
Deferred Tax
On fair value (loss)/gain for the period	(1,240)	636
Total income tax (credit)/charge in the income statement	(1,188)	636

The Company and its Guernsey registered subsidiaries, MedicX Properties I Limited and MedicX Properties V Limited, have obtained exempt company status in Guernsey under the terms of Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 so that they are exempt from Guernsey taxation on income arising outside Guernsey and on bank interest receivable. Each Guernsey company is, therefore, only liable to a fixed fee of £600 per annum Guernsey companies are taxable on UK net rental income. During the period no tax arose in respect of the income of any of the Guernsey companies. The Company's UK subsidiaries (see note 20), are subject to United Kingdom corporation tax on their profits less losses.

A reconciliation of the income tax charge applicable to the results from ordinary activities at the statutory income tax rate to income tax expense at the Group's effective income tax rate is set out below. The Group's main revenue stream is rental income and therefore the rate of 22% for UK schedule A income tax has been used.

	Six months ended 31 March 2008		Period from 25 August 2006 to 31 March 2007
		£'000	£'000
(Loss)/profit before tax		(8,617)	3,988
UK income tax at 22%		(1,896)	877
Net revaluation losses/(gains) not taxable		1,868	(859)
Income not taxable		(250)	(215)
Losses arising not relievable against current tax		278	197
Taxation in respect of prior periods		52	-
Current taxation		52	-

The calculation of the Group's tax charge necessarily involves a degree of estimation in respect of certain items whose tax treatment cannot be finally determined until a formal resolution has been reached with the relevant tax authorities.

		Restated
Deferred taxation provision	31 March 2008	30 September 2007
	£'000	£'000
Deferred tax is provided as follows:
Balance on acquisition	193	193
On fair value gain arising on acquisition	8,904	8,904
On fair value gain in prior period	585	585
On fair value gain in current period	(1,240)	-
Total deferred tax provision per the balance sheet	8,442	9,682

All deferred tax relates to the fair value gains on the Group's investment property portfolio.

As required by IAS 12, full provision has been made for the temporary timing differences arising on the fair value gain of investment properties held by UK resident companies that have passed through the Group's consolidated income statement

7. Earnings and net asset value per ordinary share

The basic and diluted earnings per ordinary share are based on the loss for the period of (£7,429,000) (2007: £3,352,000 profit) and on 79,621,215 (2007: 38,745,443) ordinary shares being the weighted average aggregate of ordinary shares in issue at the balance sheet date. The weighted average number is calculated over the period from 1 October 2007 to the balance sheet date. This gives rise to a basic and diluted earnings per share of (9.3) pence per share (2007: 8.7 pence per share).

The basic and diluted net asset value per ordinary share are based on the net asset position at the balance sheet date of £67,363,000 (30 September 2007: £55,338,000) and on 79,621,215 (30 September 2007: 57,460,715) ordinary shares being the aggregate of ordinary shares in issue at the balance sheet date. This gives rise to a basic and diluted net asset value per share of 84.6 (30 September 2007: 96.3) pence per share.

The basic and diluted net asset value per C share are based on the net asset position at the balance sheet date attributable to the C shares of £nil (30 September 2007: £21,445,000) and on nil (30 September 2007: 22,160,500) shares being the aggregate of C shares in issue at the balance sheet date. This gives a basic and diluted net asset value per share of nil (30 September 2007: 96.8) pence per share.

Adjusted earnings per share and net asset value per share

The Directors believe that the following adjusted earnings per share and net asset value per share are more meaningful key performance indicators for the Group.

	Six months ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
Adjusted basic and diluted earnings per ordinary share	(10.9)p	7.0p
	31 March 2008	30 September 2007
Adjusted net asset value per basic and diluted ordinary share	83.1p	97.0p
Adjusted net asset value per basic and diluted C share	-	96.9p

The adjusted earnings per ordinary share is based on the loss for the period of (£7,429,000) (2007: £3,352,000 profit), adjusted for the impact of deferred tax credited for the period of £1,240,000 (2007: £636,000 charged), giving an adjusted loss figure of (£8,669,000) (2007: £3,988,000 profit) and on 79,621,215 (2007: 56,292,930) ordinary shares being the weighted average number of ordinary shares in issue in for the period (in the comparative period for the period from commencement of operations on 2 November 2006 to the balance sheet date).

The adjusted net asset value per ordinary share is based on the net asset position at the balance sheet date of £67,363,000 (30 September 2007: £55,338,000) as adjusted for deferred tax of £8,442,000 (30 September 2007: £9,439,000) and goodwill of £9,659,000 (30 September 2007: £9,062,000), giving an adjusted net assets figure of £66,146,000 (30 September 2007: £55,715,000) and on 79,621,215 (30 September 2007: 57,460,715) ordinary shares being the aggregate of ordinary shares in issue at the balance sheet date. 

The adjusted net asset value per C share is based on the net asset position at the balance sheet date attributable to the C shares of £nil (30 September 2007: £21,445,000) as adjusted for deferred tax of £nil (30 September 2007: £243,000) and goodwill of £nil (30 September 2007: £221,000), giving an adjusted net assets figure of £nil (30 September 2007: £21,467,000) and on nil (30 September 2007: 22,160,500) shares being the aggregate of C shares in issue at the balance sheet date.

In common with practice in the sector, the Group would sell the UK company or UK companies that hold the properties rather than sell an individual property. Consequently, it is the Directors' view that the liability represented by the deferred tax provision is unlikely to crystallise.   

Net asset value per share applying discounted cash flow valuation basis

A fair market valuation of the Group's investments has been prepared in a similar way to other quoted infrastructure funds using a discounted cash flow analysis.

The discount rates used for valuing the projects in the portfolio are 7% for completed and occupied properties and 8% for properties under construction. These represent 2.5%-3.5% risk premiums to an assumed 4.5% long-term gilt rate. The weighted average is 7.18%. The discounted cash flows assume an average of 3% per annum increase in individual property rents at their respective review dates, residual values based upon capital growth at 1% per annum until expiry of the leases and 65% gearing.

The Group's portfolio was valued on this discounted cash flow basis as at 30 September 2007. The discounted cash flow net asset value per ordinary share on a discounted cash flow net asset value of £87,739,000 (30 September 2007: £87,479,000) and 79,621,215 being the aggregate of ordinary shares in issue at the balance sheet date (30 September 2007: 79,621,215 aggregate number of ordinary and C shares)

	31 March 2008	30 September 2007
Discounted cash flow net asset value per basic and diluted per share	110.2p	109.9p

8. Goodwill 

		Restated
	31 March 2008	30 September 2007
	£'000	£'000
Brought forward	9,283	-
Recognised on acquisition of subsidiaries	376	9,283
Carrying amount	9,659	9,283

The goodwill arose on the acquisition of MedicX Properties III Ltd and MedicX Properties IV Ltd. Additional consideration of £218,000 was paid during the year in respect of MedicX Properties IV Ltd.

9. Investment properties 

Investment properties are initially recognised at cost, being fair value of consideration given including transaction costs associated with the property. After initial recognition, freehold properties are measured at fair value, which has been determined based on valuations performed by King Sturge LLP as at 31 March 2008, on the basis of open market value, supported by market evidence, in accordance with International Valuation Standards. In accordance with industry standards, the valuation is net of purchaser costs which are approximately 5.75% of purchase price.

	Completed Investment properties £'000	Properties under construction £'000	Total £'000
2008
Acquisitions at cost/fair value	110,196	32,677	142,873
Transfer to completed properties	18,100	(18,100)	-
Disposals	-	(2,101)	(2,101)
Fair value revaluation	(5,576)	-	(5,576)
Provision for impairment	-	(1,396)	(1,396)
At 31 March 2008	122,720	11,080	133,800

	Completed Investment properties £'000	Properties under construction £'000	Total £'000
2007
Acquisitions at cost/fair value	94,414	35,959	130,373
Transfer to completed properties	15,850	(15,850)	-
Fair value revaluation	2,061	-	2,061
Provision for impairment	-	(540)	(540)
At 30 September 2007	112,325	19,569	131,894

10. Trade and other receivables

	31 March 2008		30 September 2007
		£'000	£'000
Rent receivable		850	535
Other debtors and prepayments		1,088	1,403
VAT recoverable		935	1,045
		2,873	2,983

11. Trade and other payables

	31 March 2008	30 September 2007
	£'000	£'000
Bank loans	1,387	1,387
Trade creditors	1,003	978
Deferred rental income	1,569	1,402
Interest payable and similar charges	1,046	1,057
Accruals	1,417	1,166
Other creditors	846	714
	7,268	6,704

The loan is secured on one investment property and has a remaining term of 11 years. It is expected that the loan will be repaid within one year from the balance sheet date.

12. Long-term loan

	31 March 2008	30 September 2007
	£'000	£'000
Amount drawn down in period	100,000	100,000
Loan issue costs	(194)	(185)
Amortisation of loan issue costs	1	1
	99,807	99,816

On 20 September 2007 an existing loan from Norwich Union Commercial Finance in the name of MedicX Properties I Limited was refinanced and replaced with loans to MedicX Properties I Limited; £30,000,000, MedicX Properties II Ltd; £33,000,000, MedicX Properties III Ltd; £9,000,000 and MedicX Properties IV Ltd; £28,000,000 with the same terms and conditions. The loans bear interest at a fixed rate of 5.008% on an interest only basis and are due for repayment in full on 1 December 2036. The loans are fully drawn down with the cash held on deposit to meet future investment commitments.

Under the terms of the loans, further charges will be incurred when amounts are taken off deposit and utilised for investment purposes. The charges for these withdrawals depend on the quantum of the withdrawal and will be recognised as and when withdrawals are made, and are added to the loan issue costs.

The value of the loan on an amortised cost basis at 31 March 2008 was £99,807,000 (30 September 2007: £99,816,000).

The Company does not mark to market its £100 million fixed interest debt in its financial statements. A mark to market calculation gives an indication of the benefit or cost to the Company of the fixed rate debt given the prevailing cost of debt over the remaining life of the debt. An approximate mark to market calculation has been undertaken following advice, by taking the increase in the underlying 2032 gilt rate from the last business day of the financial period (31 March 2008) and calculating the present value of the difference in the two rates over the term of the loan and discounting the cash flows at the prevailing LIBOR rate. The approximate mark to market benefit to the Company is £5,798,000 (30 September 2007: £8,546,000). 

 During the period, the Group's bank borrowings were subject to the following financial covenants:

(i)    monies released from deposit must not exceed 65% of the property value charged; 

(ii)    the net loan amount must not exceed 75% of the market value of mortgaged property; and

(iii)    long term rental income from the properties charged must cover 140% of projected finance costs.

The Group has been in compliance with the financial covenants throughout the period since issue.

The loan is secured on the Group's investment properties. 

As at 31 March 2008 the Group had £28,434,000 (30 September 2007: £33.8 million) on deposit secured against the loan.

13. Share capital

	31 March  2008 £'000	30 September 2007 £'000
Authorised
Unlimited Ordinary shares of no par value.	-	-
	Number	Number
Issued and fully paid
Ordinary shares of no par value	79,621,215	57,460,715
C shares of no par value	-	22,160,500

The C shares were converted into Ordinary Shares on 10 December 2007 at a conversion ratio of 1.0000 in accordance with the terms set out in the Placing and Offer Document of May 2007 and based on a calculation date of 30 September 2007.  

14. Share premium

	£'000
Share premium at 31 March 2008 and 30 September 2007	1,585

 15. Acquisition of subsidiaries

	MedicX Properties II Ltd		MedicX Properties III Ltd		MedicX Properties IV Ltd		MedicX (Istead Rise) Ltd		Total
	Book value	Fair value	Book value	Fair value	Book value	Fair value	Book value	Fair value	Book value	Fair value
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Net assets acquired
Investment properties	32,936	32,936	9,412	12,405	16,760	26,937	1,385	2,100	60,493	74,378
Properties under construction	7,653	7,653	-	-	4,989	10,790	-	-	12,642	18,443
Trade and other receivables	20	20	245	245	867	596	55	55	1,187	916
Cash and cash equivalents	1,196	1,196	87	87	1,797	1,797	-	-	3,080	3,080
Trade and other payables	(814)	(814)	(209)	(209)	(398)	(398)	(43)	(43)	(1,464)	(1,464)
Current tax liabilities	368	368	(59)	(59)	203	203	-	-	512	512
Bank loans and other loans	(41,359)	(41,359)	(7,559)	(7,559)	(28,880)	(28,880)	(1,410)	(1,410)	(79,208)	(79,208)
Deferred tax liabilities	-	(3,302)	(32)	(1,154)	(160)	(4,419)	-	(221)	(192)	(9,096)
	-	(3,302)	1,885	3,756	(4,822)	6,626	(13)	481	(2,950)	7,561
Goodwill		3,302		1,167		4,969		221		9,659
Total consideration		-		4,923		11,595		702		17,220
Satisfied by:
Cash		-		3,515		10,051		702		14,268
Directly attributable costs		-		363		1,000		-		1,363
Issue of shares		-		1,045		544		-		1,589
		-		4,923		11,595		702		17,220
Number of shares issued		-		1,000		500		-		1,500
Net cash outflow arising on acquisition
Cash consideration		-		(3,515)		(10,051)		(702)		(14,268)
Cash and cash equivalents acquired		1,196		87		1,797		-		3,080
		1,196		(3,428)		(8,254)		(702)		(11,188)

Other than additional consideration of £218,000 paid in respect of MedicX Properties IV Ltd and an adjustment in respect of completion accounts of £158,000 on MedicX Properties IV Ltd, all of the acquisitions took place in the comparative period.

16. Cash flow notes

	Six months ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
	£'000	£'000
Acquisition of subsidiaries
Cash	218	3,080
Trade and other receivables	-	1,019
Goodwill	-	6,175
Investment properties	-	72,278
Properties in the course of construction	-	18,443
Trade and other payables	-	(6,897)
Long term debt	-	(77,798)
Total purchase price	218	16,300
Less:
Shares issued as part of consideration	-	(1,589)
Cash acquired	-	(3,080)
Acquisition costs accrued not yet paid	-	(352)
Net cost of acquisition	218	11,279

Cash and cash equivalents 

	31 March 2008	31 March 2007
	£'000	£'000
Cash in hand and balances with banks	36,548	40,980

Major non cash transactions 

In the period to 31 March 2007 shares were issued as part of the consideration for the acquisition of MedicX Properties III Ltd and MedicX Properties IV Ltd, details of which are in note 15.  

17. Financial instruments and properties

The Group holds cash and liquid resources as well as having debtors and creditors that arise directly from its operations.

The main risks arising from the Group's financial instruments and properties are market price risk, credit risk, liquidity risk and interest risk. The Board regularly reviews and agrees policies for managing each of these risks and these are summarised below.

Market price risk

The Group's exposure to market price risk is comprised mainly of movements in the value of the Group's investment in property. Property and property related assets are inherently difficult to value due to the individual nature of each property. As a result, valuations are subject to uncertainty. There is no assurance that the estimates resulting from the valuation process would reflect the actual sales price even where sale occurs shortly after the valuation date however there is no intention to sell any of the properties at the date of the report. 

Rental income and the market value for properties are generally affected by overall conditions in the local economy, such as growth in gross domestic product, employment trends, inflation and changes in interest rates. Changes in gross domestic product may also impact employment levels, which in turn may impact the demand for premises. Furthermore, movements in interest rates may also affect the cost of financing for real estate companies.

Both rental income and property values may also be affected by other factors specific to the real estate market, such as competition from other property owners, the perceptions of prospective tenants of the attractiveness, convenience and safety of properties, the inability to collect rents because of the bankruptcy or the insolvency of tenants or otherwise, the periodic need to renovate, repair and release space and the cost thereof, the costs of maintenance and insurance, and increased operating costs.

The Directors monitor market value by having independent valuations carried out half-yearly by King Sturge LLP.

Credit risk

Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Group. In the event of a default by an occupational tenant, the Group will suffer a rental income shortfall and incur additional costs, including legal expenses, in maintaining, insuring and re-letting the property.

Liquidity risk

Liquidity risk is the risk that the Group will encounter in realising assets or otherwise raising funds to meet financial commitments. Investments in property are relatively illiquid however the Group has tried to mitigate this risk by investing in desirable properties which are well let to General Practitioners and Primary Care Trusts.

Interest rate risk

The interest rate profile of the Group at 31 March 2008 was as follows:

	Total £'000	Fixed rate £'000	Variable rate £'000	Assets on which no interest is received £'000	Weighted average interest rate per annum %
Financial assets
Goodwill	9,659	-	-	9,659	-
Properties	122,720	-	-	122,720	-
Properties under construction	11,080	-	-	11,080	-
Debtors	2,873	-	-	2,873	-
Cash and cash equivalents	36,548	-	36,548	-	5.2%
Total assets as per balance sheet	182,880	-	36,548	146,332	-

	Total £'000	Fixed rate  £'000	Variable rate  £'000	Liabilities on which no interest is paid £'000	Weighted average interest rate per annum %
Financial liabilities
Bank loans	101,194	101,194	-	-	5.0%
Creditors	5,881	-	-	5,881	-
Deferred tax provision	8,442	-	-	8,442	-
Total liabilities as per balance sheet	115,517	101,194	-	14,323	-

The interest rate profile of the Group at 30 September 2007 was as follows:

	Total £'000	Fixed rate £'000	Variable  rate £'000	Assets on  which no  interest is  received £'000	Weighted  Average  interest rate  per annum %
Financial assets
Goodwill	9,283	-	-	9,283	-
Properties	112,325	-	-	112,325	-
Properties under construction	19,569	-	-	19,569	-
Debtors	2,983	-	-	2,983	-
Cash and cash equivalents	48,825	-	48,825	-	5.7%
Total assets as per balance sheet	192,985	-	48,825	144,160	-

	Total £'000	Fixed rate  £'000	Variable rate  £'000	Liabilities on which no interest is paid £'000	Weighted average interest rate per annum %
Financial liabilities
Bank loans	101,203	101,203	-	-	5.0%
Creditors	5,317	-	-	5,317	-
Deferred tax provision	9,682	-	-	9,682	-
Total liabilities as per balance sheet	116,202	101,203	-	14,999	-

18. Commitments

At 31 March 2008 the Group had commitments of £18.3 million (30 September 2007: £9.4 million) to complete properties under construction.

19. Material contracts and related party transactions

Investment Adviser

MedicX Adviser Ltd is appointed Property Adviser under the terms of an agreement dated 17 October 2006. Fees payable under this agreement are (i) 1.5% per annum on gross assets by way of a property advisory fee; (ii) a property management fee of 3% per annum of gross rental income; (iii) a corporate transaction fee of 1% of the gross asset value of any property owning subsidiary company acquired; and (iv) a performance fee of 15% of the amount by which the return to shareholders in terms of share price growth plus cumulative dividends paid exceeds the initial offer price compounded annually by 10% in each accounting period.  

During the period, the agreements with Medicx Adviser Ltd gave rise to £1,242,000 (2007: £1,312,000) of fees, of which £572,000 (2007: £464,000) remained outstanding at the end of the period, as follows:

	Period ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
	£'000	£'000
Expensed to the consolidated income statement:
Investment advisory fee	1,138	728
Property management fees	104	24
Administrative fees	-	24
Added to cost of acquisition of properties:
Corporate fees for purchase of subsidiaries	-	536
Total Fees	1,242	1,312

MedicX Adviser Ltd was entitled during the period to receive fees of £Nil (2007: £65,000) for providing administrative services to MedicX Properties II Ltd, MedicX Properties III Ltd and MedicX Properties IV Ltd.

Administration and company secretarial agreements

International Administration (Guernsey) Limited, the Company's administrator and company secretary, was entitled during the period ended 31 March 2007 to receive a fee of £55,000 per annum for carrying out administrative services for the Company under the terms of an agreement dated 17 October 2006; a further £25,000 per annum under an agreement of the same date for the provision of administrative services to MedicX Properties I Limited, and £15,000 per annum under an agreement dated 12 March 2007 with MedicX Properties V Limited.

From 1 April 2007, each Group company entered into a separate administration agreement with International Administration (Guernsey) Limited for the provision of administrative services for fees totalling £58,000 (2007: £58,000) for the provision of corporate secretarial services to all Group companies plus fees at time spent rates for other administrative services.

During the period, the agreements with International Administration (Guernsey) Limited gave rise to the following fees:

	Period ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
	£'000	£'000
Administrative fees	244	34

20. Subsidiary companies

The following were the companies in the group at 31 March 2008:

Name	Country of incorporation	Principal activity	Ownership percentage	Type of share held
MedicX Properties I Limited	Guernsey	Acquisition of properties	100%	Ordinary
MedicX Properties II Ltd	England & Wales	Acquisition of properties	100%	Ordinary
MedicX Properties III Ltd	England & Wales	Acquisition of properties	100%	Ordinary
MedicX Properties IV Ltd	England & Wales	Acquisition of properties	100%	Ordinary
MedicX Properties V Limited	Guernsey	Acquisition of properties	100%	Ordinary
MedicX (Verwood) Ltd*	England & Wales	Acquisition of properties	100%	Ordinary
MedicX (Istead Rise) Ltd*	England & Wales	Acquisition of properties	100%	Ordinary

*Held indirectly

21. Dividends

	Six months ended 31 March 2008	Period from 25 August 2006 to 31 March 2007
Dividends declared during the period	£1,991,000	-
Dividend per share	2.5p	-
Dividend declared after the period end	£2,070,000	£1,436,000
Dividend per share	2.6p	2.5p

 

END

 

 

IR ILFFAEVIRFIT