Mindful of the fact that international students typically make up more than half its tenants, Empiric Student Property (ESP) is attempting to attract a greater domestic crowd, less hamstrung by travel commitments. The landlord has upped its marketing to UK students and their parents, as well as to a more diversified range of international students, and adopted a more flexible approach to tenancy start dates and single-semester lets for the upcoming academic year. "The level of competition with such uncertainty has increased," said chief operating officer Lynne Fennah.
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Around a tenth of contracted revenue for the 2019/2020 academic year was lost, reflecting rent forgone for students that wished to return home in the wake of the pandemic. Reservations for the upcoming academic year stand at 65 per cent, behind a rate of 85 per cent at the same point last year. The potential for a further reduction in rental income was reflected in a sharp devaluation in the assets, which caused the group to swing to a pre-tax loss.
However, the group is pushing ahead with two of the three development projects yet to be completed, both of which are due for delivery in 2021. However, it is planning to review the 181-bed project in Canterbury in October, when it hopes to have greater certainty around its income.
Numis forecasts adjusted net assets of 106p a share at the end of December, rising to 107p the same time next year.
| EMPIRIC STUDENT PROPERTY (ESP) | ||||
| ORD PRICE: | 65p | MARKET VALUE: | £ 392m | |
| TOUCH: | 63.9-65.5p | 12-MONTH HIGH: | 104p | LOW: 50p |
| DIVIDEND YIELD: | 5.8% | TRADING PROP: | £25.4m | |
| DISCOUNT TO NAV: | 39% | |||
| INVESTMENT PROP: | £985m | NET DEBT: | 55% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 108 | 28.8 | 4.8 | 2.50 |
| 2020 | 107 | -14.4 | -2.4 | 1.25 |
| % change | -1 | - | - | -50 |
| Ex-div: | * | |||
| Payment: | * | |||
| *First quarter dividend paid on 20 March | ||||
