REG - Empiric Student Prop - Business and Trading Update

Empiric Student PropertyAnnouncement

23/05/2022 07:00

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RNS Number : 3494M  Empiric Student Property PLC  23 May 2022

23 May 2022

Empiric Student Property plc

("Empiric" or the "Company" or, together with its subsidiaries, the "Group")

BUSINESS AND TRADING UPDATE

Empiric Student Property plc (ticker: ESP), the owner and operator of premium
student accommodation serving key UK universities, announces a trading update
for the period from 1 January to 20 May 2022 ahead of its Annual General
Meeting ("AGM") at 10.00am today.

 

Duncan Garrood, Chief Executive Officer of Empiric Student Property plc, said:

"We are now two thirds of the way through our booking cycle for the academic
year 2022/23, and to date we have achieved revenue occupancy of 68%, which is
6% points better than the last pre-covid academic year (2019/20) when bookings
were 62% at this stage. We remain confident of achieving our guidance for
revenue occupancy for the forthcoming academic year of 85% to 95%, with a
target of delivering at the upper end of that range, assuming no further
market disruption.

 

Our strategy of further enhancing the quality of our portfolio and business
remains well on track and we are making good progress across all areas. We are
increasingly encouraged by the continued return to normal levels of activity
in our markets and by the outlook for our business. The Board continues to
target a dividend of at least 2.5 pence per share for the financial year 2022,
all else remaining equal, and to pay fully covered and progressive dividends
going forward."

 

Improving rents and bookings

Our revenue management and dynamic pricing platform is helping to maximise our
rents and bookings, and, thereby in turn, drive revenue for the academic year
2022/23 ("AY22/23"). So far, this has helped us improve rental prices in fast
selling locations, and there are learnings too, which we expect will continue
to improve rents and booking numbers further going forward.

 

With bookings at 68% to date, it is currently too early to give firm like for
like rental guidance. However, current trends indicate a return to
pre-pandemic levels of rental growth.

 

Enhancing our portfolio to drive shareholder value

We continue to actively manage our property portfolio to recycle capital and
drive operational performance and returns for our shareholders.

·      In the first quarter of 2022, we sold five sites for £26.5
million. Since the disposal programme began, we have sold nine sites for
£44.6 million, above book value.

·      We are progressing well with our two-year programme of non-core
property disposals, with £80 million remaining. We expect to complete further
sales transactions in the second half of the year, at or above book value in
aggregate. As reported previously, increased due diligence is extending the
sales process, but we are confident that disposals will be completed in line
with our plans.

·      The cash generated allowed us to recycle capital and acquire the
high-quality 92-bed asset, Market Quarter in Bristol city centre, for £19
million in February 2022, reflecting 4.75% net initial yield. Within weeks of
acquiring the property, it was 100% booked for AY22/23 with an 18% increase in
rent.

·      We have a good pipeline of potential high-quality investments
that can be activated once the proceeds from further disposals are received.

·      Our two developments under construction in St Mary's in Bristol
and South Bridge in Edinburgh, are making good progress and remain on time and
within budget. St Mary's is already 100% booked for AY22/23.

 

Further enhancing our brand and customer experience

We are also making good progress in further enhancing our brand and customer
experience, which will not only give us stronger differentiation in the market
but also help to reduce customer acquisition costs.  Customer service will be
further improved through the launch of our customer app, on which we have made
great progress. We will move to pilot phase at four sites next month.

 

Investing in our people

We are continuing to invest in our people, securing and supporting the best
talent for our future profitable growth. 25 of our key managers have recently
enrolled in an accredited leadership development scheme. We have significantly
stepped up our wellbeing and mental health support services and invested in
enhanced internal communications.

 

Board changes have been detailed in a separate announcement today, which
included that our Chief Financial & Sustainability Officer, Lynne Fennah,
has decided to step down. She will remain in her position until May 2023 to
ensure an orderly transition. Whilst the time for thanking Lynne and wishing
her all the very best is yet to come, today I would like to recognise Lynne's
significant contribution to the turnround and transformation of the business.

 

Half year results

We will report our half year results for the six months ending 30 June 2022 on
Thursday, 11 August 2022, with further details to be announced in due course.

 

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

 Empiric Student Property plc                                 (via Maitland/amo below)
 Duncan Garrood (Chief Executive Officer)
 Lynne Fennah (Chief Financial & Sustainability Officer)

 Jefferies International Limited                              020 7029 8000
 Tom Yeadon

 Andrew Morris

 RBC Europe Limited (trading as RBC Capital Markets)          020 7653 4000
 Marcus Jackson

 Elliot Thomas

 Maitland/amo (Communications Adviser)                        07747 113 930 / 0207 379 5151
 James Benjamin                                               empiric-maitland@maitland.co.uk (mailto:empiric-maitland@maitland.co.uk)

 Alistair de Kare-Silver

 

The Company's LEI is 213800FPF38IBPRFPU87.

 

Further information on Empiric can be found on the Company's website at
www.empiric.co.uk (http://www.empiric.co.uk/) .

 

Notes:

Empiric Student Property plc is a leading provider and operator of modern,
predominantly direct-let, premium student accommodation serving key UK
universities. Investing in both operating and development assets, Empiric is a
fully integrated operational student property business focused on premium
studio-led accommodation managed through its Hello Student® operating
platform, that is attractive to affluent growing student segments.

 

The Company, an internally managed real estate investment trust ("REIT")
incorporated in England and Wales, listed on the premium listing segment of
the Official List of the Financial Conduct Authority and was admitted to
trading on the main market for listed securities of the London Stock Exchange
in June 2014.

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