TIDMMXF
RNS Number : 4101V
The MedicX Fund Limited
23 July 2018
Press Release
For immediate release
23 July 2018
MedicX Fund Limited
("MedicX", "the Fund" or "the Company")
Trading update incorporating quarterly Net Asset Value
("NAV")
MedicX, the specialist primary care infrastructure UK REIT
investor in modern, purpose-built, primary healthcare properties in
the United Kingdom and Republic of Ireland, today publishes a
trading update incorporating its quarterly NAV as at 30 June
2018.
Highlights for the quarter ended 30 June 2018
-- Portfolio value increased 10.9% to GBP797.9 million (31 March
2018: GBP719.7 million) reflecting UK Net Initial Yield of 4.86%
(31 March 2018: 4.99%). GBP14.9 million like for like valuation
increase since 31 March 2018, together with net additions of
GBP63.3 million;
-- Increase in annualised rent roll of 7.9% to GBP43.9 million
(31 March 2018: GBP40.7 million);
-- EPRA NAV per share increased by 1.5% to 80.8p per share (31 March 2018: 79.6 p per share);
-- 3.4% total return on EPRA NAV for the quarter ended 30 June
2018 (8.0% for the six months ended 31 March 2018); and
-- Accretive off-market acquisition of portfolio of 12 medical
centres for a headline price of GBP63.8 million and net
consideration of GBP27.3 million.
Summary of Net Asset Values
30 June 31 March
2018(1) 2018(1)
------------------------------ --------- --------- ------
NAV (GBP'000) 356,366 340,189 +4.8%
NAV per share (pence) 80.5 79.3 +1.5%
EPRA NAV (GBP'000) 357,657 341,476 +4.7%
EPRA NAV per share (pence) 80.8 79.6 +1.5%
EPRA NNNAV (GBP'000) 318,843 297,774 +7.1%
EPRA NNNAV per share (pence) 72.0 69.4 +3.8%
------------------------------ --------- --------- ------
(1) Unaudited
Investment activity
During the quarter ended 30 June 2018, MedicX completed GBP67.0
million of acquisitions, adding 13 properties to its portfolio.
On 19 April 2018, MedicX contracted to acquire, by way of
forward funding, a new c.900 m(2) primary healthcare medical centre
in Peterborough where all leases will be for a term of 20 years
from practical completion.
On 8 June 2018, MedicX completed an off-market corporate
acquisition of a portfolio of 12 operational and fully let primary
care medical centres for a price of GBP63.8 million and net
consideration of GBP27.3 million including GBP3 million settled
through the issuance of 3.75 million Ordinary Shares to the
vendor.
The acquired portfolio has an annual rent roll of GBP2.95
million with a weighted average unexpired lease term of 14 years,
and an average lot size of GBP5.3 million. The portfolio, excluding
revaluation, adds annualised earnings of c.GBP1.4 million to MedicX
performance.
At 30 June 2018, MedicX had three properties under construction
with a combined completed value of c.GBP18.7 million at Vale of
Neath and Peterborough (as above) in the UK and in Rialto, a suburb
of Dublin in Ireland. Construction on these three schemes is due to
complete in early 2019.
Quarterly Valuation
The quarterly valuation of the UK portfolio as at 30 June 2018
was undertaken by Jones Lang LaSalle LLP and the quarterly
valuation of the Republic of Ireland portfolio as at 30 June 2018
was undertaken by Cushman & Wakefield. The aggregate total
portfolio value at 30 June 2018 was GBP797.9 million (31 March
2018: GBP719.7 million).
Overall the portfolio value increased 10.9% to GBP797.9 million.
The movement was made up of a like for like 2% increase of GBP14.9
million since 31 March 2018, together with net additions of GBP63.3
million.
The valuation reflected a Net Initial Yield of 4.86% for the UK
portfolio (31 March 2018: 4.99%) and a True Equivalent Yield of
6.6% (31 March 2018: 6.6%) in the Republic of Ireland.
Rent Reviews
For the year to date since 1 October 2017, 60 leases and rents
of GBP8.2 million have been reviewed and the equivalent of a
blended 1.34% per annum increase was achieved (year to 30 September
2017: 1.02%). Of these reviews, an uplift of 0.69% per annum was
achieved through open market reviews and uplifts of 2.12% and 2.75%
per annum were agreed for RPI and fixed reviews respectively.
In July 2018, MedicX received the outcome of an independent
expert determination of an outstanding rent review for one of its
major assets in Clapham, London. The determination was that the
contractual rent due from the applicable rent review date of March
2015 should increase by 35% (equating to a compounded 10.54% per
annum increase over the applicable 3 year rent review pattern).
Dividends and returns
On 29 June 2018, MedicX paid its quarterly dividend of 1.51p per
Ordinary Share in respect of the period 1 January 2018 to 31 March
2018 which comprised 50% (0.755p) Property Income Distribution and
50% ordinary dividend (0.755p).
For the quarter ended 30 June 2018 a total return on EPRA NAV of
3.4% was achieved (8.0% for the six months ended 31 March 2018).
This return comprised of the dividend of 1.51p and an increase in
EPRA NAV of 1.2p per share compared to the opening EPRA NAV of
79.6p per share.
Funding
During the three months ended 30 June 2018, the Fund drew down a
further EUR3.65 million from its EUR34.0 million development
facility with Bank of Ireland. As at 30 June 2018, a total of
EUR27.0 million of the facility had been utilised, with the
remainder available to complete the property under construction at
Rialto. On 6 June 2018, the Fund drew down GBP23 million on its
Revolving Credit Facility ('RCF') to fund acquisitions.
As at 30 June 2018, adjusted gearing was 52.5% (31 March 2018:
49.5%) and the weighted unexpired term of all drawn debt including
the RCF was 11.0 years with an average fixed rate of 4.25% (31
March 2018 12.1 years; 4.27%).
MedicX is currently at an advanced stage of agreeing more
flexible sources of borrowings with a number of parties.
During the quarter ended 30 June 2018 the Company issued 13.45
million Ordinary Shares of no par value at an average price of
80.83 pence per share. 3.75 million of these shares were issued out
of treasury at a price of 80.0 pence per share to the vendor as
part consideration for the acquisition described above. The
remaining 9.7 million shares were issued from the Company's block
listing.
On 29 June 2018 the Company sold in lieu of cash dividends,
368,440 Ordinary Shares from treasury pursuant to the Scrip
Dividend Scheme, based on a scrip calculation price of 80.24 pence
per share.
The total number of Ordinary Shares of the Company in issue as
at 30 June 2018 was 442,799,016 (excluding treasury shares) with
each share holding one voting right. The Company also holds
2,903,383 Ordinary Shares in treasury and has 5,071,668 Ordinary
Shares of no par value remaining under its block listing
facility.
There have been no share issues since the quarter end.
Outlook
The Fund has continued to execute its strategy of selectively
buying high quality, larger, locally strategic and sustainable
properties. The Board believes this focus and its discipline of not
overpaying for its acquisitions will deliver sustainable long term
returns for shareholders.
In light of the strong pipeline of investment opportunities,
with a value of c.GBP110 million, the Board remains of the view
that the Fund is well positioned for growth.
-End-
For further information please contact:
Octopus Healthcare Adviser Ltd +44 (0) 345 0404 5555
Octopus Healthcare +44 (0) 20 3142 4820
Mike Adams, Chief Executive Officer
Canaccord Genuity Limited +44 (0) 20 7523 8000
Robbie Robertson/Andrew Zychowski/Helen Goldsmith
Liberum +44 (0) 20 3100 2000
Richard Crawley/Jamie Richards
Buchanan +44 (0) 20 7466 5000
Charles Ryland/Henry Wilson
Information on MedicX Fund Limited
MedicX Fund Limited ("MXF", "MedicX Fund", the "Fund" or the
"Company", or together with its subsidiaries, the "Group") is the
specialist primary care infrastructure investor in modern,
purpose-built primary healthcare properties in the United Kingdom
and Ireland, listed on the London Stock Exchange, with a portfolio
comprising 166 properties.
The Investment Adviser to the Company is Octopus Healthcare
Adviser Ltd, which is part of the Octopus Healthcare group. Octopus
Healthcare invests in and develops properties as well as creating
partnerships to deliver innovative healthcare buildings to improve
the health, wealth and wellbeing of the UK. It currently manages
over GBP1.4 billion of healthcare investments across a number of
platforms, with a focus on five core areas: GP surgeries, care
homes, special education schools, retirement housing and private
hospitals. Octopus Healthcare is part of the Octopus group, a
fast-growing UK fund management business with leading positions in
several specialist sectors including healthcare property, energy,
property finance and smaller company investing. Octopus manages
GBP8.0 billion of funds for more than 50,000 retail and
institutional investors as well as supplying energy to more than
220,000 customers.
Octopus Healthcare Adviser Ltd is authorised and regulated by
the Financial Conduct Authority.
The Company's website address is www.medicxfund.com. Neither the
contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other
website), nor the contents of any website accessible from
hyperlinks within this announcement, are incorporated into, or form
part of, this announcement.
The Company's Legal Entity Identifier is
2138008POF35FTNFCB25.
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London Stock Exchange. RNS is approved by the Financial Conduct
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END
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