GP landlord MedicX Fund (MXF) delivered a robust performance in the year to September, with profits more than doubling thanks to valuation gains and higher rental income.
Around 90 per cent of the revenue stream is paid indirectly by the NHS, which means the group operates at the safer end of the property market. Rental income grew by 16 per cent to £28.1m, boosted by the 19 acquisitions made during the year. There's also a strong pipeline of around £100m acquisitions, most of them developments for which MedicX is the preferred funding partner. Once built, this pipeline would deliver a rent roll of around £7m.
One of the key elements of the business model is matching debt and lease maturities, both of which are around 13 years. And, crucially, the 5.68 per cent rental yield on investments comfortably exceeds the weighted average fixed rate of debt of 4.35 per cent.
MedicX upped the quarterly dividend payment to 1.45p a share, and expects dividends for the current year to total 5.9p. However, underlying dividend cover, adjusted to reflect expected income from properties under construction, slipped to 67 per cent, so a third of the dividend is being paid out of capital.
| MEDICX FUND (MXF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 84p | MARKET VALUE: | £297m | |
| TOUCH: | 83-84p | 12-MONTH HIGH: | 87p | LOW: 77p |
| DIVIDEND YIELD: | 6.9% | TRADING PROPERTIES: | nil | |
| PREMIUM TO NAV: | 29% | |||
| INVESTMENT PROPERTIES: | £503m | NET DEBT: | 111% | |
| Year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)* |
|---|---|---|---|---|
| 2010 | 66.0 | 8.2 | 6.4 | 5.4 |
| 2011 | 65.8 | 6.7 | 4.3 | 5.5 |
| 2012 | 63.5 | 2.6 | 1.1 | 5.6 |
| 2013 | 62.2 | 9.7 | 3.6 | 5.7 |
| 2014 | 65.1 | 20.4 | 5.9 | 5.8 |
| % change | +5 | +110 | +64 | +2 |
Ex-div: 13 Nov Payment: 31 Dec *Dividends paid quarterly | ||||
