MedicX Fund (MXF) invests in purpose-built primary healthcare facilities, an area that the UK government is planning to lift from 7 per cent to 11 per cent of the NHS budget. And the arithmetic makes such a move compelling. If you go to an A&E or walk-in medical centre it costs the NHS around £124, while a visit to your GP costs £21.
With the UK Treasury as your main tenant, MedicX's revenue stream is about as safe as it gets. However, rental growth remains relatively modest. Around three-quarters of the £37.2m annualised rent roll is subject to open market review, where a limited supply of new property schemes has held back rent reviews made by district valuers, meaning open market rents rose just 0.8 per cent. However, around a quarter of reviews are linked to RPI, and these rose by 1.8 per cent, a trend that will accelerate as inflation starts to rise.
The fund has also been increasing its exposure to the Irish market, where despite some yield compression, assets acquired are still on an initial yield of nearly 7 per cent against less than 5 per cent in the UK, according to company figures.
Analysts at Peel Hunt are forecasting adjusted net asset value of 74.5p at the year ending September 2017 (from 72.1p a year earlier).
| MEDICX FUND (MXF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 89.5p | MARKET VALUE: | £352m | |
| TOUCH: | 88.5-89.25p | 12-MONTHHIGH: | 93p | LOW: 80p |
| DIVIDEND YIELD: | 6.6% | TRADING STOCK: | nil | |
| PREMIUM TO NAV: | 25% | |||
| INVEST PROPERTIES: | £612m | NET DEBT: | 113% | |
| Year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p*) |
|---|---|---|---|---|
| 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 |
| 2015 | 69.6 | 39.1 | 9.9 | 5.9 |
| 2016 | 71.7 | 28.2 | 7.1 | 5.95 |
| % change | +3 | -28 | -28 | +1 |
Ex-div: 17 Nov Payment: 30 Dec *Dividends of 1.4875p paid quarterly | ||||
