After several years of growing its asset base, Empiric Student Property (ESP) is focusing on boosting rental income from its existing portfolio of student halls. Chief executive Tim Atlee said the group was in a “transformation and consolidation phase”, bringing facilities management for the remaining 57 operating properties back in-house during the first half of the year.
That helped reduce the average cost per bed by 11 per cent and boosted the gross margin to 68.5 per cent, from 62.3 per cent, putting it on track to meet its full-year target of upwards of 67 per cent. Revenue was boosted by efforts to improve occupancy - which stood at 97 per cent for the 2018/19 academic year - by investing in the sales team and the increasing use of short-term lets. Bookings stood at 85 per cent for the 2019/20 academic year.
The student landlord is still developing some assets, with the pipeline standing at 687 beds to be delivered over the next three academic years. That is in addition to 240 beds that are due to come out of operation in September and be redeveloped at Emily Davies Student Residence in Southampton.
Analysts at Numis forecast adjusted net asset value (NAV) of 107p a share at the December 2019 year-end, up from 106p in 2018.
| EMPIRIC STUDENT PROPERTY (ESP) | ||||
| ORD PRICE: | 92.6p | MARKET VALUE: | £558m | |
| TOUCH: | 92.6-92.8p | 12-MONTH HIGH: | 100p | LOW: 89p |
| DIVIDEND YIELD: | 5.4% | DEVELOPMENT PROPERTIES: | £58m | |
| DISCOUNT TO NAV: | 14% | NET DEBT: | 53% | |
| INVESTMENT PROPERTIES: | £944m | |||
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 106 | 21.7 | 3.6 | 2.5 |
| 2019 | 108 | 28.8 | 4.8 | 2.5 |
| % change | +2 | +33 | +33 | |
| Ex-div: | 5 Sep | |||
| Payment: | 20 Sep | |||
| Ex-dividend and payment dates refer to second quarterly dividend of 1.25p a share | ||||
