Empiric Student Property (ESP) spent much of the six months to June consolidating a number of acquisitions and developments, but the target of adding up to 3,000 student beds each year remains firmly on the agenda. Higher debt pushed up net finance costs but this was more than outweighed by a rise in net rental income.
Demand for purpose-built student accommodation remains as strong as ever, and is set to grow even faster by 2020 as a result of a significant population bulge comprising children reaching university age. To meet this demand, Empiric has raised £110m through a share placing and a further £10m through an unsecured loan, and has already spent £51.2m on four acquisitions. Nearly 7,000 beds were operational at period-end. A further five acquisitions are in the pipeline, with an expected cost of £64m, and this is expected to lift gross annualised rental income from £53.8m as at June 2017 to as a much as £75m by June 2018.
The implications of Brexit remain unclear; just under 7 per cent of students in the UK come from the EU, but three-quarters of these are postgraduates who spend less than 12 months in the UK and should not be affected by immigration limits.
Analysts at broker Numis are forecasting adjusted net asset value at the new December year-end of 111p, from 105p a year earlier.
| EMPIRIC STUDENT PROPERTY (ESP) | ||||
| ORD PRICE: | 111.25p | MARKET VALUE: | £670m | |
| TOUCH: | 110.75-111.25p | 12-MONTH HIGH: | 119p | LOW: 104p |
| DIVIDEND YIELD: | 5.5% | DEVELOPMENT PROPERTIES: | £80m | |
| PREMIUM TO NAV: | 5% | |||
| INVESTMENT PROPERTIES: | £738m | NET DEBT: | 53% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p*) |
| 2016 | 105 | 14.1 | 3.1 | 2.99 |
| 2017 | 106 | 14.5 | 2.9 | 3.05 |
| % change | - | +3 | -8 | +2 |
| Ex-div: | - | |||
| Payment: | - | |||
| *Dividends paid quarterly. Second-quarter dividend of 1.525p paid on 1 Aug | ||||
