REG - Empiric Student Prop - BUSINESS AND TRADING UPDATE

Empiric Student PropertyAnnouncement

24/05/2023 07:00

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RNS Number : 4100A  Empiric Student Property PLC  24 May 2023

Empiric Student Property plc

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

 

BUSINESS AND TRADING UPDATE

 

Strong operational metrics and resilience of PBSA sector continue to underpin
outlook

 

Empiric Student Property plc (ticker: ESP), the owner and operator of premium,
studio-led, student accommodation across the UK, is pleased to provide a
business and trading update as at 23 May 2023.

 

Highlights

 

·      Revenue occupancy for academic year 2023/24 now at 86% and
continuing to track significantly ahead of prior year

·    Like for like growth in average weekly rents for academic year
2023/24 improving and now expected to exceed 7%

·     As previously announced, the sale of Emily Davis House,
Southampton which was exchanged for sale in December 2022 for £13.9m, is now
unconditional and will complete on 31 May 2023

·    Contracts exchanged for the disposal of a further two non-core
properties generating £18.1m, which is above book value

 

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

"The booking cycle for academic year 2023/24 continues to track significantly
ahead of 2022/23, which was itself a record year for the Company. We remain
confident in achieving occupancy rates above 97 per cent and pleasingly,
delivering rental growth in excess of 7 per cent like for like, ahead of
earlier guidance.

 

The business is in great shape, our net promoter scores continue to improve
and we've made good progress on our non-core disposal programme. We are
optimistic that 2023 will be another strong year for the Company."

 

Academic year 2023/24

We are extremely pleased with the strong sales performance for the forthcoming
2023/24 academic year, with 86 per cent of our 2023/24 income contractually
secured. This is largely the result of our best ever rebooker campaign, where
an increasing number of students are deciding to remain with us, reflecting
the strong demand for our premium accommodation combined with improving levels
of customer satisfaction provided through our Hello Student platform. We
continue to expect the portfolio to be effectively full, with occupancy above
97 per cent by the start of the new academic year in September.

 

Our dynamic pricing platform continues to drive revenue growth across the
portfolio. We now expect like for like rental growth to exceed 7 per cent, up
from 6 per cent as announced in March.

 

Disposals

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

 

Contracts have recently been exchanged for the disposal of a further two
non-core properties generating £18.1m, £0.2 million above their 31 December
2022 book values. The sales cumulatively represent 233 operational beds and
reduce by one, the cities in which the Company has an operational presence.
Both contracts are unconditional and anticipated to complete by 30 June 2023.

 

Since March 2021, including the above, the Company has generated £91.9
million from the disposal of non-core assets. A number of other non-core
assets sales are at various stages of negotiation, including under offer. As
reported previously, we are confident that our disposal programme will be
materially completed this year.

 

We continue to actively consider a number of high-quality, well located
investment opportunities that are complementary to our core strategy.

 

Debt & liquidity

 

As at 31 March 2023, property LTV was 31.0 per cent (based on 31 December 2022
valuations) with a weighted average cost of debt of 4.2 per cent, and a
weighted average term to maturity of 4.6 years. Cash and available facilities
totalled £75.9 million

 

Although there are no residual 2023 refinancing requirements, we are active in
discussion with existing and new lenders in respect of medium-term
requirements. Lender appetite for the sector remains encouraging.

 

Dividends

Alongside our full year results in March 2023, we set out our expectation of
meeting a minimum full year dividend of 3.25 pence per share for 2023. Today
we have declared our first quarter dividend of 0.8125 pence per share, in line
with this target.

 

ENDS

 

 

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

 Empiric Student Property plc                                 (via FTI Consulting below)
 Duncan Garrood (Chief Executive Officer)
 Donald Grant (Chief Financial & Sustainability Officer)

 Jefferies International Limited                              020 7029 8000
 Tom Yeadon
 Andrew Morris

 Peel Hunt LLP                                                020 7418 8900
 Capel Irwin

 Carl Gough

 FTI Consulting                                               020 3727 1000

 Dido Laurimore                                               empiric@fticonsulting.com (mailto:empiric@fticonsulting.com)

 Eve Kirmatzis

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 located in high-demand
university towns and cities across the UK. 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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