With 91 per cent of its rents paid indirectly by the NHS, GP landlord MedicX Fund (MXF) operates at the safer end of the real estate market. Last year's reorganisation of the health service nonetheless led to a freeze in new developments, which is only now starting to lift as piecemeal projects gain approval. With organic rental growth muted, however, MedicX's results for the six months to 31 March still paint a picture of growth by equity issuance and sector consolidation.
Rental income rose by 16 per cent to £13.4m, with much of the gain coming from the acquisition of nine properties. This was funded by a placing and open offer at 75p in October that raised a net £47.6m. The company also pushed through rent increases averaging 2.1 per cent, with decent inflation-linked and fixed-uplift reviews compensating for weak open-market rents. That led to a £4.8m net valuation gain on the £500m portfolio.
MedicX upped the quarterly dividend payment to 1.45p a share and expects to pay 5.8p for the year, which implies a yield of 7 per cent. However, underlying dividend cover - which includes expected income from properties under construction - was just 65 per cent, which means over a third of the dividend is being paid out of capital. Adjusted book value still rose from 63.1p to 64.7p, boosted by the issuance of shares at a premium.
| MEDICX FUND (MXF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 83p | MARKET VALUE: | £290m | |
| TOUCH: | 83-84p | 12-MONTH HIGH: | 87p | LOW: 74p |
| DIVIDEND YIELD: | 6.9% | DEVELOPMENT PROP: | nil | |
| PREMIUM TO NAV: | 30% | |||
| INVESTMENT PROP: | £480m | NET DEBT: | 114% | |
| Half-year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 61.5 | 3.6 | 1.5 | 2.85 |
| 2014 | 63.9 | 8.6 | 2.4 | 2.9 |
| % change | +4 | +139 | +60 | +2 |
Ex-div: 14 May Payment: 30 Jun | ||||
