GP landlord MedicX Fund (MXF) continues to expand apace, with £50.1m of acquisitions or commitments to properties under development since the September year-end. It now has 109 completed primary-care properties and 12 under construction, worth in aggregate £444m.
The biggest deal so far this year was a corporate acquisition completed on 24 May, after the interim period closed. MedicX paid £10m in cash for a £44.7m portfolio backed by £34.7m of 15-year debt portfolio. Promisingly, it has also signed an agreement with the seller, a specialist developer called General Practice Investment or GPI, to forward fund future projects worth £35m.
The rationale for rapid expansion is that the company's funding costs - MedicX’s average cost of debt was 4.45 per cent at the end of March - remain substantially lower than the rental yield on GP surgeries. It also tried to mount an audacious all-share bid for sector peer Assura, but based on a share-price premium that proved ephemeral.
Book value per share fell once again as the company distributed more in dividends than it earned in income - though Mike Adams, chief executive of the company that manages the fund, stressed that adjusted book value would have remained flat at 64.7p if the benefit of the company’s low-cost fixed debt book had been marked to market. Dividend cover is improving, but is still only 69 per cent even if expected income from development properties is included.
MEDICX FUND (MXF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 80p | MARKET VALUE: | £209m | |
| TOUCH: | 78-81p | 12-MONTH HIGH: | 89p | LOW: 73p |
| DIVIDEND YIELD: | 7.1% | TRADING PROP: | nil | |
| PREMIUM TO NAV: | 30% | |||
| INVESTMENT PROP: | £381m | NET DEBT: | 149% | |
| Half-year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 65.8 | 0.90 | 1.0 | 2.80 |
| 2013 | 61.5 | 3.57 | 1.5 | 2.85 |
| % change | -7 | +297 | +50 | +2 |
Ex-div: 15 May Payment: 28 Jun | ||||
