Political upheavals and a disparity between supply and demand has left the UK property market looking pretty turbulent in recent months. Healthcare property investment is largely sheltered from this. An ageing and growing population means demand for healthcare properties is high, existing facilities are crying out for an upgrade and government policy is supportive of expansion and investment in primary care sites.
Soon-to-be real estate investment trust (Reit) MedicX Fund (MXF) is riding that demand well. The fund's portfolio grew to a value of £660m in the six months to March 2017, from £612m at the September 2016 year-end. After £48.8m of acquisitions in the period, there are now 156 properties in the portfolio, of which five are under construction. The fund also has a pipeline of new opportunities worth £110m in the UK and Ireland.
But net rental income ticked up just 3 per cent as government spending - which makes up 86 per cent of overall revenue - continues to be downtrodden. This growth was not enough to offset a higher number of shares in issue in these numbers and so adjusted EPS fell 4 per cent to 1.75p. However, broker Peel Hunt is still forecasting adjusted EPS of 4.1p for the year to September 2017 and adjusted NAV of 74.7p (from 3.7p and 70.8p in FY2016).
MEDICX FUND (MXF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 90p | MARKET VALUE: | £369m | |
| TOUCH: | 89.8-90.3p | 12-MONTH HIGH: | 93p | 80p |
| DIVIDEND YIELD: | 6.6% | TRADING STOCK: | NIL | |
| PREMIUM TO NAV: | 24% | |||
| INVESTMENT PROP: | £660m | NET DEBT: | 113% | |
| Half-year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p*) |
|---|---|---|---|---|
| 2016 | 70.0 | 18.5 | 2.9 | 2.96 |
| 2017 | 72.7 | 21.5 | 3.1 | 2.99 |
| % change | +4 | +16 | +7 | +1 |
Ex-div: 18 May Payment: 30 Jun *Dividends of 1.49375p paid quarterly | ||||
