TIDMMXF
RNS Number : 4813W
The MedicX Fund Limited
09 February 2017
For immediate release
9 February 2017
MedicX Fund Limited
("MedicX Fund", "the Fund" or "the Company")
Quarterly Net Asset Value ("NAV") announcement and business
update
MedicX Fund Limited (LSE: MXF), the specialist primary care
infrastructure investor in modern purpose-built primary healthcare
properties in the United Kingdom and Ireland, today announces its
quarterly NAV as at 31 December 2016.
The fundamental market drivers for primary healthcare remain
strong despite wider market uncertainty following the result of the
EU referendum. Underpinned by a high quality portfolio with secure,
long term income and funding, the Company, continues to demonstrate
resilience and is well positioned for the future.
Summary of Net Asset Values
31 Dec 30 Sep
2016(1) 2016
------------------------------ --------- -------- -------
NAV (GBP'000) 288,251 278,161 +3.6%
NAV per share (pence) 72.4 71.7 +1.0%
EPRA NAV (GBP'000) 294,138 284,048 +3.6%
EPRA NAV per share (pence) 73.8 73.2 +0.8%
EPRA NNNAV (GBP'000) 248,133 219,027 +13.3%
EPRA NNNAV per share (pence) 62.3 56.4 +10.5%
------------------------------ --------- -------- -------
(1) unaudited
Market update
The demand for new modern primary care infrastructure continues
in both the UK and Republic of Ireland as populations age and a
wider range of clinical services is sought to be delivered over
longer hours by GPs in their local communities.
Politically, cross-party support remains in place for primary
care and its front line pivotal role in providing care.
Transforming the NHS through improved access to services, better
working efficiency and implementing new ways of working are
expected to remain as government priorities, which will require
investment in new more efficient and sustainable premises.
Reform is also being led by the NHS and local councils in
England, through the preparation of 44 Sustainability &
Transformation Plans (STPs) and the Strategic Estates Plans
supporting the STPs which provide clarity on premises requirements.
There is a growing acceptance across stakeholders within the STPs
that the process has to succeed and estate and premises solutions
will reflect the joined up needs across all health infrastructure.
It is anticipated there will be an evolution of premises design
which will enable providers to deliver new models of care with a
mixture of reimbursed and non-reimbursed tenants.
The Fund continues to work with its strategic development
partners, engaging with provider groups and working with its
tenants to deliver new schemes and premises improvements. As
announced on 26 January 2017, MedicX Fund entered into a joint
venture agreement with General Practice Investment Corporation
Limited ("GPIC"). The jointly controlled company will be an
investor in UK primary healthcare properties, let to GPs or
directly to the NHS, which have asset management needs or will lead
to new development delivery opportunities. In addition to this, the
framework agreement with GPIC, who have delivered c.GBP77 million
of assets to the Fund since 2012, has been extended for a further
five years.
The Republic of Ireland demonstrates similar demographic
pressures and political will which has enabled the Health Service
Executive to drive forward its programme of putting in place a
modern purpose-built estate to deliver new world class healthcare.
MedicX Fund is now supporting three schemes underway in Mullingar,
Crumlin and Rialto, and a significant pipeline currently in
solicitors' hands.
Quarterly Valuation
The quarterly valuation of the UK portfolio as at 31 December
2016 undertaken by Jones Lang LaSalle LLP stood at GBP612.1 million
(30 September 2016: GBP603.4 million) on the basis that all
properties were complete. This reflected a Net Initial Yield of
5.22% (30 September 2016: 5.25%). Excluding the effects of property
acquisitions and disposals the uplift on a like for like basis was
0.67%.
In addition, as at 31 December 2016, Jones Lang LaSalle LLP
continued to value the three assets under construction in the
Republic of Ireland at EUR34.6 million on a completed basis.
During the quarter to 31 December 2016, the net book value of
the portfolio increased by 1.6% to GBP622.2 million (30 September
2016: GBP612.3 million). This was as a result of a GBP3.4 million
valuation gain and GBP7.3 million of capital investment, being
offset by the sale of one asset at a net book value of GBP0.8
million.
Discounted cash flow valuation of assets and debt
The Investment Adviser has undertaken a discounted cash flow
("DCF") valuation of the Group's assets and associated debt at each
period end. The basis of preparation is similar to that calculated
by infrastructure funds. The values of each investment are derived
from the present value of each 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 are then aggregated with
the surplus cash position of the Group.
At 31 December 2016, the DCF valuation was GBP382.8 million or
96.1 pence per share, compared with GBP374.9 million or 96.6 pence
per share as at 30 September 2016.
The assumptions applied remain unchanged to those used in
previous periods. The discount rates used are 7% for completed and
occupied properties and 8% for properties under construction. The
weighted average discount rate is 7.05% which represents a 5.11%
risk premium relative to the 20 year gilt rate of 1.94% at 31
December 2016.
The discounted cash flows assume an average 2.5% per annum
increase in individual property rents at their respective review
dates and also assume the level of gearing and cost of debt are
maintained at current levels. 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).
Rent reviews
Since 1 October 2016, 23 leases and rents of GBP2.2 million have
been reviewed and the equivalent of a 1.42% per annum increase was
achieved (year to 30 September 2016: 1.20%). Of these reviews, an
uplift of 1.29% per annum was achieved through open market reviews
and an uplift of 1.56% per annum was agreed for RPI reviews.
Reviews of GBP18.4 million (30 September 2016: GBP16.1 million) of
passing rent currently remain under negotiation.
Investment activity
In the quarter ended 31 December 2016, construction of the
property at Benllech reached practical completion and the property
was brought into use. In addition to this, in October, the Fund
committed to a forward funding of a new primary healthcare medical
centre in Brynmawr, South Wales. The completed property will
consist of 1,587m(2) adding an initial passing rent of
approximately GBP300,000 per annum to the rent roll.
At 31 December 2016 six properties were under construction at
Streatham, Brynhyfryd, Brynmawr, Mullingar, Crumlin and Rialto.
Five of these properties are due to complete within the next twelve
months, with Rialto due to complete in 2018.
The Company regularly assesses the assets it owns in its
portfolio, to ensure they perform in line with the long-term
objectives set by the Fund. In light of this, one primary
healthcare centre at Harleston was sold during December at its book
value of GBP0.8m.
The Investment Adviser has access to a strong pipeline in both
the UK and Ireland with approximately GBP80 million of assets
either in solicitors' hands or under negotiation.
Share issues
During the quarter ended 31 December 2016 the Company issued
9,900,000 Ordinary Shares of no par value at an average price of
87.82 pence per share.
On 30 December 2016 the Company sold in lieu of cash dividends,
402,011 Ordinary Shares from treasury pursuant to the Scrip
Dividend Scheme, based on a scrip calculation price of 89.30 pence
per share.
Following the scrip dividend, the total number of Ordinary
Shares of the Company in issue at 31 December 2016 was 406,152,182,
of which 7,783,327 were held in treasury. The Company also had
12,081,109 Ordinary Shares of no par value remaining under its
block listing facility at 31 December 2016. The total voting rights
at 31 December 2016 were 398,368,855, with each Ordinary Share
carrying one vote.
Since the quarter end, the Company has issued 4,350,000 Ordinary
Share of no par value at an average price of 88.00 pence per
share.
All shares were issued at a premium (net of costs) to NAV and so
were accretive to existing shareholders.
Dividends
On 30 December 2016 a quarterly dividend of 1.4875p per Ordinary
Share in respect of the period 1 July 2016 to 30 September 2016 was
paid to shareholders on the register as at close of business on 18
November 2016.
On 1 February 2017 the Directors announced a quarterly dividend
of 1.5p per Ordinary Share in respect of the period 1 October 2016
to 31 December 2016. The dividend will be paid on 31 March 2017 to
shareholders on the register as at close of business on 17 February
2017. Shareholders will be offered the opportunity to take new
Ordinary Shares in the Company in lieu of receiving a cash payment
under the Scrip Dividend Scheme put in place on 5 May 2010.
The Company expects, subject to unforeseen circumstances, to pay
dividends totalling 6.00p per Ordinary Share in respect of the
financial year ending 30 September 2017, an increase of 0.05p per
Ordinary Share over the previous year.
End
For further information please contact:
MedicX Fund +44 (0) 1481 723 450
David Staples, Chairman
Octopus Healthcare +44 (0) 20 3142 4820
Mike Adams, Chief Executive Officer
Canaccord Genuity Limited +44 (0) 20 7523 8000
Andrew Zychowski / Helen Goldsmith
Buchanan +44 (0) 20 7466 5000
Charles Ryland / Vicky Hayns
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 and Ireland,
listed on the London Stock Exchange, with a portfolio comprising
152 properties.
The Investment Adviser to the Company is Octopus Healthcare
Adviser Ltd, which is part of the Octopus Healthcare group. Octopus
Healthcare invests in and develops properties as well as creating
partnerships to deliver innovative healthcare buildings to improve
the health, wealth and wellbeing of the UK. It currently manages
over GBP1 billion of healthcare investments across a number of
platforms, with a focus on five core areas: GP surgeries, care
homes, special education schools, retirement housing and private
hospitals. Octopus Healthcare is part of the Octopus group, a
fast-growing UK fund management business with leading positions in
several specialist sectors including healthcare property, energy,
property finance and smaller company investing. Octopus manages
GBP6 billion of funds for more than 50,000 retail and institutional
investors.
Octopus Healthcare Adviser Ltd is authorised and regulated by
the Financial Conduct Authority.
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
forms part of, this announcement.
The Company's Legal Entity Identifier is
2138008POF35FTNFCB25.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCZKLFBDLFLBBQ
(END) Dow Jones Newswires
February 09, 2017 09:29 ET (14:29 GMT)
Medicx (LSE:MXF)
Historical Stock Chart
From Apr 2024 to May 2024
Medicx (LSE:MXF)
Historical Stock Chart
From May 2023 to May 2024