Quarterly Net Asset Value

RNS Number : 5134G

The MedicX Fund Limited

12 May 2011

 



For immediate release                                                                                                      12 May 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 31 March 2011

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 King Sturge LLP, independent valuers to the Company, as at 31 March 2011 stood at £224.8 million, reflecting a net initial yield of 5.86%.  This compares with a net initial yield of 5.87% in December 2010, with values in the sector remaining firm.

Unaudited adjusted net asset value

Incorporating the March valuation, the unaudited adjusted net asset value at 31 March 2011 is estimated to be £126.6 million, equivalent to 66.5p per share. This compares with the adjusted net asset value at 31 December 2010 of 65.8p per share.  The adjusted net asset value is net assets excluding goodwill and deferred tax.

Long-term interest rates have increased marginally since 31 December 2010 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 £141.1 million, equivalent to 74.1p per share, compared with 74.5p per share as at 31 December 2010.

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 31 March 2011, the DCF valuation was £164.8 million or 86.6p per share compared with £131.7 million or 92.4p per share at 31 December 2010, reflecting the impact of spreading the valuation over an increased number of shares following the successful equity issue in March.

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.  The weighted average discount rate is 7.20%, which represents a 2.69% risk premium relative to the 20 year gilt rate as at 31 March 2011.

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.

Rent reviews

During the six months to 31 March 2011, 13 leases and rents of £1.1 million were reviewed and the equivalent of a 2.3% per annum increase was achieved.  Of these reviews, 1.4% per annum was achieved on open market reviews, 3.9% on RPI based rental reviews, and 2.5% on fixed reviews.  Following these reviews the cash yield of the portfolio has increased to 6.04%, which compares with a benchmark 20-year gilt rate of 4.5%. Reviews of £4.4 million of passing rent are currently under negotiation.

Investment activity

The portfolio, which consists of 59 properties, continues to perform in line with long-term objectives.  A completed property was added to the portfolio with the purchase of the Pilgrim Primary Care Centre, Immingham in February, and completion of the Bilborough property in March brings the number of completed properties in the portfolio to 51.  Seven properties are now under construction at Halifax, Hounslow, Apsley, Bermondsey, Clapham, Raynes Park and West Wirral, with a new project at Woolwich Royal Arsenal anticipated to commence in the next quarter.  All of these properties are due to complete in the next year.

Dividends

A quarterly dividend of 1.375p per ordinary share in respect of the period 1 October 2010 to 31 December 2010 was paid on 31 March 2011 to ordinary shareholders on the register as at close of business on 18 February 2011.

On 4 May 2011 the Company announced a quarterly dividend of 1.375p per ordinary share in respect of the period 1 January 2011 to 31 March 2011.  Eligible shareholders will be able to elect to receive this dividend as shares in lieu of cash through the Scrip Dividend Scheme (the "Scheme") established by the company on 5 May 2010.  Shareholders may find the opportunity to receive the dividend in this form advantageous, and are encouraged to review the details of the Scheme and the associated documents, which may be found on the Company website (http://www.medicxfund.com/scrip), or alternatively may be viewed through the National Storage Mechanism (http://www.hemscott.com/nsm.do).   

Equity issues in the quarter

Pursuant to the placing and offer for subscription announced on 2 February 2011, the Company issued for cash new ordinary shares totalling 47,650,000 at a price of 72p per share on 4 March 2011.

In addition, on 31 March 2011 the Company issued 96,957 shares pursuant to the Scrip Dividend Scheme, based on a scrip calculation price of 72.43p per share.

The total number of ordinary shares of the Company in issue is 190,313,101 with each share holding one voting right, compared with 142,566,144 ordinary shares at 31 December 2010.  No shares are held in treasury.

Issue date of results

MedicX Fund will announce its interim results for the six months ended 31 March 2011 on
26 May 2011.

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/Suzanne Brocks

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 59 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 31 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), nor the contents of any website accessible from hyperlinks within this announcement, are incorporated into, or form part of, this announcement.

 

END

 

 

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