LONDON (Alliance News) - MedicX Fund Ltd on Tuesday said it is "back on track" after generating returns for shareholders in the recently ended financial year following a recovery in its share price and as it made a minor lift to its dividend payout.
The investment firm focuses on primary healthcare properties in the UK and Ireland. MedicX shares were up 0.5% to 88.94 pence per share on Tuesday, trading 4.0% higher than at the start of 2016.
"Since my statement last year, I am pleased to report that total shareholder return has recovered following the dip in the share price that occurred over the company's previous year end," said Chairman David Staples.
"The share price recovered from 77.5 pence at September 30, 2015, and was 88.75 pence at September 30, 2016, underlying the total shareholder return for the year of 22.5%, putting the fund back on track with its long-term returns," he added.
In the previous financial year, MedicX generated negative total shareholder return of 0.4%.
Earnings per share in the recent year fell 28% to 7.1 pence from 9.9p a year earlier, but the net asset value per share at the end of September was up 3.0% to 71.7p from 69.6p 12 months earlier.
The valuation of the property portfolio stood at GBP612.3 million at the end of the year compared to GBP553.5 million at the start. Rent income was up 7.0% year-on-year to GBP35.1 million from GBP32.8 million.
On an adjusted basis that excludes exceptional items, EPS for the year rose 2.7% to 3.8p from 3.7p while the NAV per share ended the year at 73.2p from 70.8p a year earlier. The NAV total return for the year on an adjusted basis was 11.8% versus 17.2%.
Pretax profit for the year amounted to GBP28.2 million compared to the GBP39.1 million profit last year, declining due to higher finance costs and other expenses, including a GBP1.6 million performance fee to its investment adviser that was not paid a year ago.
The dividend for the year was declared at 5.95p, for a 6.7% dividend yield, compared to the previous annual payout of 5.9p, or 7.6% dividend yield. Dividend cover rose to 64.0% from 63.3% and, on an adjusted basis, rose to 68.5% from 68.0%.
"As the fund continues to grow its rental income, deploy capital and complete properties under construction, and when taken with the cap on the investment adviser base fee, it is expected that dividend cover and underlying dividend cover will improve further and will align themselves over the medium term," said MedicX.
MedicX said it has a strong pipeline of around GBP108.0 million worth of acquisition opportunities.
"As explained in my introduction, we maintained our investment discipline in a tough market and consequently the pace of property acquisitions slowed somewhat compare to recent years. At September 30, 2016, the group had committed investment of GBP580.6 million across 152 properties of which six are under construction," said Staples.
Net debt at the end of September stood at GBP315.3 million, equating to 50.8% adjusted gearing, versus a year earlier when net debt was GBP281.4 million, for an adjusted gearing of 50.2%.
"There is no doubt that markets have shown and will continue for some time to show considerable volatility given such things as the Brexit issue, how policies in the US will change, worries over upcoming elections in certain Eurozone countries, and the slowdown of the Chinese economy," said Staples.
"The fact that the company's share price has continued to remain strong despite this environment is testament to the relative safety many investors see in primary healthcare property and the yields it can provide," he added.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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