REG - Empiric Student Prop - PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DEC 2024
13/03/2025 07:15
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RNS Number : 4630A Empiric Student Property PLC 13 March 2025
Empiric Student Property plc
("Empiric" or the "Company" or, together with its subsidiaries, the "Group")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024
Another strong operational result with delivery of growth agenda our strategic
focus
Empiric Student Property plc (ticker: ESP), the owner and operator of premium,
studio-led student accommodation across the UK, is pleased to report its
preliminary results for the year ended 31 December 2024.
Duncan Garrood, Chief Executive Officer of Empiric Student Property plc, said:
"The business has delivered another year of great progress against its
strategic objectives, most pleasingly in respect to our growth agenda. Having
successfully concluded the Company's first equity raise since 2017, our focus
remains squarely on its deployment and delivery.
2024 saw us add three fantastic new sites to the portfolio growing our
existing clusters in Bristol, Glasgow and Manchester. We also unlocked value
from existing sites with planning consent achieved at Victoria Point in
Manchester, and have continued to make good progress on our programme of
refurbishment, driving enhanced rental growth."
Financial highlights
31 December 2023 31 December 2024 Change
Income statement
Revenue (£m) 80.5 84.2 +4.6%
Like for like rental growth (blended FY %) 7.0 9.3 +2.3% pts
EPRA earnings (£m) 24.1 25.9 +7.5%
EPRA earnings per share (p) 4.0 4.2 +5.0%
Gross margin (%) 69 70 +1% pt
Dividends paid/declared per share (p) 3.5 3.7 +5.7%
Balance sheet
EPRA NTA per share (p) 120.7 119.6 -0.9%
Portfolio valuation (£) 1,097.9 1,135.0 +1.6% LfL(1)
Cash and undrawn committed facilities (£m) 82.5 75.4 -8.6%
EPRA Loan to value (%) 30.6 27.2 -3.4% pts
(1) Calculated on a like for like basis. Increasing to 4.2% when adjusted
for the removal of Multiple Dwellings Relief.
Strong operational performance delivers 9.3% like for like rental growth in the year
• Like for like rental growth of 10.5% and 7.0% achieved for academic
years 2023/24 and 2024/25, respectively
• Gross margin improved by 1% point to 70% (2023: 69%)
• EPRA EPS increased 5.0% to 4.2p (2023: 4.0p)
• Portfolio valuation of £1,135 million, up 1.6% like for like,
inclusive of the removal of Multiple Dwellings Relief
• Net initial yield unchanged at 5.5%
• EPRA NTA per share of 119.6p, marginally down as a result of equity
raise (2023: 120.7p)
• Dividends paid and payable for the year of 3.7p, 5.7% ahead of prior
year and above target
Record re-booker rate and occupancy within target range
• Record re-booker rate of 23% for academic year 2024/25 (2023/24:
22%)
• 97% occupancy achieved for academic year 2024/25 (2023/24: 99%)
• 98% occupancy for financial year 2024 (2023: 99%)
Growing the portfolio and creating value
• Successful equity raise generated £56.1 million for deployment into
accretive investment and postgraduate refurbishment opportunities, £19.8
million deployed before the year end, with a further £20.0 million on track
for investment during 2025
• Three acquisitions completed in top-tier cities, growing existing
prime clusters in Bristol, Glasgow and Manchester offering asset management
opportunities to unlock further value
• Planning consent achieved for comprehensive redevelopment and
expansion of Victoria Point, Manchester, increasing the current provision of
beds by 310. On site works likely to begin in late 2026
• Full refurbishment of Brunswick Apartments, Southampton, delivered
173 newly refurbished rooms and amenities, securing strong rental growth for
academic year 2024/25 and returns in excess of target
• Continued consolidation of operational presence with four further
non-core city exits achieved
Robust balance sheet
• EPRA loan to value at 27.2% (2023: 30.6%)
• Refinancing extends weighted average debt term to 4.7 years, with
refinancing risk removed until 2028
• Weighted average cost of debt at 4.5% (2023: 4.3%), with all drawn
debt subject to interest rate protection
• Cash and undrawn committed facilities of £75.4 million
Delivering outstanding customer service
• Continued improvement in Global Student Living Index Net Promoter
Score from 30.5 to 32, which compares favourably to PBSA average of 19
• Customer satisfaction rate remains high at 86%
• Hello Student awarded Best Student Wellbeing at Global Student
Living Awards 2024
Responsible business
• Further £13.3 million invested in fire safety works in 2024, with
73% of the portfolio now EWS1 certified
• Investment in green initiatives delivers 3% saving in energy
consumption per bed
• Over 60% of portfolio rated EPC B or better, exceeding interim
targets established in Net Zero strategy
Outlook for academic year 2025/26 sales cycle
• Occupancy of 48% currently secured, with booking behaviour
normalising
• Like-for-like rental growth of 5% anticipated
• Target occupancy remains >97%
Results presentation at 09.00 (GMT) today
To access the live webcast, please register here:
https://brrmedia.news/ESP_FY24 (https://brrmedia.news/ESP_FY24)
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
Henry Nicholls
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 serving key UK
universities. Investing in both operating and development assets in a multi
building cluster operational model, 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 under the Equity Shares 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. The Company is classified as a commercial company listed under
the UK Listing Rules and as such is not an alternative investment fund ("AIF")
for the purposes of the Alternative Investment Fund Managers Directive
("AIFMD") and is not required to provide investors with a Key information
Document ("KID") in accordance with the Packaged Retail and Insurance-based
Investment Products ("PRIIPs") regulations.
Disclaimer
This release includes statements that are forward looking in nature.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of Empiric Student Property plc to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Any information contained in this release on the
price at which shares or other securities in Empiric Student Property plc have
been bought or sold in the past, or on the yield on such shares or other
securities, should not be relied upon as a guide to future performance.
Chief Executive Officer's Review
The business has delivered another strong financial and operational
performance during 2024. In validation of our strategy, student demand for
high-quality accommodation aligned to the UK's best universities has remained
strong. Rental growth captured for the academic year 2024/25 lettings cycle
exceeded our initial expectations and delivered growth of seven per cent on a
like for like basis.
Reflecting the continued strong demand for our product, occupancy of 97 per
cent was achieved across the portfolio for the 2024/25 academic year.
Occupancy was slightly below the exceptional levels achieved in the previous
two academic years of 99 per cent, but in line with our target.
Leeds and Sheffield, where eight per cent of our beds are located, experienced
a decline in occupancy this year. A trend witnessed across the wider purpose
built student accommodation ("PBSA") market. In Leeds this was partly as a
result of an increase in the number of new Buy to Let properties coming onto
the market in the middle of the lettings cycle, which were widely reported as
being let to students. We do not expect this to continue as the letting
windows settles into a full year cycle and investors focus on longer stay
occupants at higher rates. Furthermore, the prospective changes within the
Renters Rights Bill could make letting to students considerably less
attractive for non-PBSA operators, including HMOs. In Sheffield, the
University of Sheffield experienced a fall in international student numbers
this year, however universities have experienced success in taking a more
active approach to international student recruitment and this should continue
to drive student numbers toward the country's top-tier universities. Our
expectation is that this disruption should not impact the longer-term
attractiveness of these two cities given their Universities are both ranked
in the 2025 Times Top 30 universities in the UK.
Despite widespread publicity about international student numbers, created in
part by the previous government's amendment to student visa rules, strategic
review of the graduate route and negative rhetoric around student immigration,
our market share of international students has increased in the current
sitting academic year. Demographically, international students now represent
69 per cent of all bookings (up from 51 per cent in academic year 2023/24),
with Chinese students remaining our largest international market at 40 per
cent, up from 32 per cent in the prior year.
The 2024/25 sales campaign delivered another record re-booker performance,
with 23 per cent of our rooms sold to students who were already staying with
us. Adjusting for those students who were not eligible to rebook, for example
where their course concluded in academic year 2023/24, we achieved an eligible
re-booker rate of 53 per cent. This is a great achievement and tangible
endorsement of customer satisfaction and the value inherent in our service
proposition.
Underpinned by strong rental growth and stable yields, our portfolio valuation
grew a further 1.6 per cent like for like, 4.2 per cent when the abolition of
Multiple Dwellings Relief is disregarded. The balance sheet remains in good
shape with prudent gearing of 27.2 per cent which sits comfortably within our
long term target, providing a degree of headroom. All near-term refinancing
risk has been removed.
Our October 2024 equity raise was well received and I thank our long standing
shareholders for their continued support and also welcome new shareholders to
the register. We raised gross proceeds of £56.1 million at a four per
discount to the closing share price the day prior to launch, which are being
used to pursue an independent growth strategy of acquisition and
refurbishment, negating the need for a prospective joint venture as was
initially considered.
We have been pleased to grow our dividend again this year, delivering
progression of six per cent year on year for shareholders.
Resilient market fundamentals
The PBSA market continues to demonstrate resilience in the face of wider
macroeconomic headwinds, underpinned by sustained student demand for
prestigious UK universities and modern accommodation. Investor appetite is
fuelled by the undersupply of high-quality operational beds, long-term
predicted growth in demand and constrained delivery of new supply with
reducing supply of the traditional alterative HMO accommodation.
Overall the demand and supply imbalance in PBSA continues unabated, however
this is highly nuanced in some markets, which have greater supply,
demonstrating a level of price sensitivity. Participation rates in the UK's
higher education sector remains historically high with over 2.4 million
full-time students. The UK remains an attractive, high quality, and relatively
affordable destination of choice for international students compared to other
markets, with students of Chinese origin continuing to dominate the UK's
international student market.
The growth in student numbers, which accelerated post pandemic has since
normalised, aligning with longer term trends. The continued growth in domestic
18-year-olds and a forecast recovery in international students is expected to
ensure this continues to remain robust. The recent three per cent increase in
the tuition fee cap to £9,535 is not expected to impact application numbers
from UK domestic students.
A clear flight to quality continues with higher tariff, typically the Russell
Group's research-led, universities experiencing year on year growth in
applications to the detriment of medium and lower tariff universities. This
validates our strategy of focusing our portfolio on these cities, which
deliver growth and investment.
It is anticipated that the sector will continue to have a significant
shortfall in supply, with only 11,270 new beds delivered in 2024. Viability
remains a key challenge for developers, with higher build costs, increased
development periods, enhanced building safety requirements, sustainability
demands, increased financing costs and a challenging planning environment
continuing to discourage development.
Supply will therefore be increasingly focused on the best performing markets
which are fuelled by continued favourable student demand where higher rents
improve development viability. The shortage of housing options for students is
also being compounded by the continued loss of HMOs, exacerbated by the recent
Autumn Budget and proposals within the Renters Rights Bill which currently
continues its way through Parliament.
Portfolio growth and active property management
It has been an active and successful year from a portfolio management
perspective. Eight residual non-core properties were disposed of during 2024,
generating £45.2 million and reducing the number of cities in which we
operate by four. These sales represented 433 operational beds and have
improved our portfolio's alignment to prime and super prime locations to 97
per cent.
Since March 2021, including the above, the Company has generated £146.4
million from the disposal of non-core assets, 0.2 per cent below book value in
aggregate, which considering the challenging market conditions during this
period, is a strong endorsement of our portfolio valuation.
In February 2024, we acquired a small development opportunity in Bristol for
£5.6 million. This former office building is located adjacent to our existing
College Green building. A planning application was submitted to facilitate a
change in use to student accommodation and the delivery of over 50 new PBSA
beds into this strong operational cluster. Preparatory works have also begun
at two sites in Southampton and Bath which are earmarked for conversion to the
Company's postgraduate product.
A planning application was submitted in May 2024 to facilitate an extension
and full refurbishment of our existing operational site at Victoria Point in
Manchester. In December, Manchester City Council granted detailed planning
permission fully in line with our application, which once fully implemented
will add 310 new beds into this acutely undersupplied city.
In July 2024, the Company acquired a 94-bed operational asset in the heart of
Glasgow's west end for £9.7 million. The property is well located, near our
Willowbank hub site in the city, and acquired almost entirely pre-let for the
2024/25 academic year, delivering an effective net initial yield of over 7.5
per cent. The property benefits from refurbishment potential, which together
with the benefits of clustering is expected to unlock an enhanced rental tone
and deliver improved operating margins for the city.
In December 2024, following our equity raise, we acquired a 136-bed all studio
scheme in Manchester for £19.75 million. Again, the property is well located
close to Manchester University and opposite our existing Victoria Point hub
site in the city, delivering the same value enhancing opportunities that can
be delivered in Glasgow. The operational asset is expected to deliver a 7.0
per cent net initial yield from September 2025.
A second acquisition, linked to the equity raise deployment plan, is under
offer with advanced negotiations anticipated to conclude shortly. We will
provide a further update once concluded.
One of our larger properties, Brunswick Apartments, Southampton, which had
been closed for the duration of the 2023/24 academic year, reopened to
students in September 2024. This 173 bed property received a full room and
amenity refurbishment, alongside fire safety and Net Zero related works and
has delivered strong rental growth, double digit IRR performance and received
excellent customer feedback.
Delivering high-quality, consistent customer service
Our key performance indicator for the delivery of this strategic priority is
Global Student Living's Net Promoter Score ("NPS").
In both surveys conducted during 2024, our operating brand, Hello Student,
achieved an improved NPS relative to 2023. We end the year with an NPS score
of +32 (2023: +30.5), significantly outperforming the benchmark All Private
Halls score of +19.
Of all respondents, 86 per cent rated their level of satisfaction as either
good or very good with 78 per cent of our customers responding that their
accommodation had a positive impact on their overall well-being. This
important aspect of our service proposition was recognised at this year's
Global Student Living awards, when Hello Student was awarded the accolade for
Best Student Wellbeing.
The delivery of superior service requires a high performing and engaged team
and we therefore monitor employee engagement as a key non-financial
performance indicator. In 2024, the Company celebrated its tenth anniversary
since establishment and to mark the occasion, the executive team hosted a
series of team engagement days around the country celebrating this milestone
but also setting out its vision for the future and providing all employees
with the opportunity to engage with the executives on a one-to-one basis. Our
engagement scores benchmark well amongst some of the top performing UK
companies.
We have invested in a new end to end ERP system and launched a new customer
facing website during 2024, which has improved the booking experience, making
it even easier for customers to secure their room with us.
Safety
We are responsible for ensuring that everyone who is living, working in or
visiting our buildings is kept safe. We ensure that our buildings comply with
not only all relevant regulations but strive to align to best practice within
the industry.
Having allocated £46 million toward a five year programme of initiatives
which began in 2021, we have continued to progress works on a risk-based
basis. In 2024 we invested a further £13.2 million towards attainment of the
latest EWS1 certification standard, an investment which is fully reflected in
property valuations. By 31 December 2024, 73 per cent of the portfolio had
achieved this certification standard.
Our buildings continue to be inspected on a regular basis to ensure that we
identify and eliminate hazards. To assess the buildings, we have engaged with
specialist consultants to undertake thorough assessments of general safety,
hazards, prevention of fire risks and water systems.
The business conducted its first externally supported crisis management test
in 2024, simulating a serious wellbeing concern alongside a fire in a vacant
building. Good feedback was received from our primary authority fire service
on our partnership and approach to incident management.
Creating a sustainable business
The business remains committed to achieving Net Zero by 2033. As part of this
journey, our plan, including interim targets for the next two years, was put
to an advisory shareholder vote at the 2024 Annual General Meeting, helping
foster transparency and engagement with shareholders on this important topic.
Although the resolution was passed, the result was somewhat disappointing,
with 25 per cent of responding shareholders voting against. In order to better
understand the result, and inform future decision making, we sought engagement
with shareholders. From those shareholders that provided feedback, it appeared
in part that they required a clearer articulation between the cost and return
that could be expected for each of target. This will be addressed when next
put to shareholders in 2026.
The key performance indicators we monitor are EPC risk management and energy
consumption per bed. Great progress has been made in the management of EPC
risk this year, with 64 per cent of our sites rated EPC B or better, a target
achieved more than a year earlier as envisaged in our Net Zero strategic plan.
Our like for like energy consumption per bed has fallen by three per cent to
4,351 kwh per bed, reflective of our investment in energy efficiency
initiatives.
Strategy & outlook
As we look forward into 2025, we remain encouraged by the outlook for student
numbers for the 2025/26 academic year and beyond, from both a domestic and
international perspective. Growth in the number of UK 18 year olds is set to
continue through to 2030, and internationally, we have seen a considerably
more welcoming rhetoric from the new education minister and greater focus by
universities on international student recruitment.
We are therefore confident of achieving another successful year from an
occupancy perspective and believe our strategy of refurbishment and our focus
on continually improving levels of customer satisfaction will deliver like for
like rental growth in excess of inflation.
Our strategic focus will remain on driving operational efficiencies through
growth. First and foremost, the continued deployment of proceeds from our
October 2024 equity raise, the continued roll out of our Postgrad by Hello
Student brand, completing our undergraduate refurbishment programme, but also
as opportunities arise, selectively recycling capital to further strengthen
our alignment to top-tier universities.
The year ahead will, however, not be without its challenges. The sustained
rebasing of energy costs looks set to continue for the foreseeable future and
this will be coupled with the impact of the autumn budget and annual review of
the national Real Living Wage, both of which are set to drive compensation
related costs significantly higher from April. This has precipitated a review
of our operating model and will likely result in some amount of restructuring.
Our decision not to pursue a joint venture also enables us to reduce resources
pre-recruited in its anticipation.
Despite the challenges faced this past year, we are delighted to be in a
position to declare a dividend in excess of our initial 3.5 pence target for
2024. Today we have announced our final quarterly dividend for 2024 of 1.075
pence per share taking the total dividend paid and payable in respect of 2024
to 3.7 pence per share, an increase of six per cent on 2023. With the Board
remaining committed to a progressive dividend policy, we will therefore
initially target a minimum dividend of 3.7 pence per share for the 2025
financial year.
Duncan Garrood
Chief Executive Officer
12 March 2025
Operating review
The business has continued to demonstrate a degree of resilience in the face
of increasingly challenging wider market conditions, achieving good rates of
occupancy whilst delivering strong like for like rental growth, comfortably
above the rate of inflation.
Demand continues to exceed supply in most of the key cities in which we
operate. New supply of high quality, well located accommodation remains
limited and continues to be outpaced by increasing demand, exacerbated by the
continued decline in private landlords particularly HMO operators and
Buy-to-Let investors while the cohort of UK 18 year olds continues to
increase. The prospective changes within the Renters Rights Bill have the
potential to amplify this issue, making letting to students considerably less
attractive for non-PBSA operators.
Another strong re-booker performance was achieved for the current sitting
2024/25 academic year, with 23 per cent of our rooms sold to students who were
already living with us, providing a tangible endorsement of our product and of
the service we provide.
Portfolio overview
A summary of the Group's portfolio is set out below, segmented in line with
our valuer's view of quality. Almost 97 per cent of the portfolio is now
invested in Prime or Super Prime locations.
Since 31 December 2023, the portfolio has grown in value by 1.6 per cent,
like-for-like. This includes the impact of the removal of Multiple Dwellings
Relief in March, which had it remained in place, would have resulted in like
for like growth of 4.2 per cent. With the portfolio's net initial yield
unchanged at 5.5 per cent, this is the result of income growth achieved for
the 2024/25 academic year. The reversionary yield was also held at 5.7 per
cent, providing confidence that as the letting cycle advances for the new
2025/26 academic year, a further valuation rise could be expected if
investment yields remain as stable as we have seen over the past 18 months.
Valuer's quality segmentation Properties Operational beds Market value (£m) Market value (%)
Super prime regional 23 2,443 538.7 47.5
Prime regional 45 4,579 558.1 49.2
Super Prime and Prime Regional 68 7,022 1,096.8 96.7
Secondary 7 663 38.2 3.3
Total 75 7,685 1,135.0 100.0
Strategic segmentation Market value (£m) NIY (%)
Operational portfolio 1,114.0 5.5
Commercial portfolio 16.5 8.0
Development portfolio 4.5
Total 1,135.0
Deployment of proceeds following equity raise
In October 2024, the Company raised £54.3 million, net of costs, in order to
pursue an independent growth strategy of acquisition and refurbishment,
negating the need for a prospective joint venture as had been initially
considered.
Proceeds were earmarked for deployment into two well aligned acquisition
opportunities in top-tier university cities and to accelerate the roll out of
the Group's Postgraduate exclusive product.
In December 2024, the first of two acquisitions, Tatton House in Manchester,
was acquired for £19.75 million. This 136 bed, all-studio scheme is well
located, being less than ten minutes' walk to the Manchester University campus
and directly opposite our existing Victoria Point Hub. This location allows us
to instantly unlock operational efficiencies and during the letting cycle for
academic year 2025/26, by offering the full amenity provision of our wider
cluster to prospective residents of Tatton House, which currently has no
on-site amenity. This operational PBSA asset is expected to deliver a seven
per cent net initial yield from September 2025.
A second acquisition is under offer and currently expected to conclude in
early April 2025, in line with our deployment assumptions.
Preparatory works have begun at three existing sites earmarked for conversion
to the Group's Postgraduate product, with over £10 million on track for
investment during 2025. Furthermore, our academic year 2025/26 sales programme
has been amended with planning and design underway to facilitate the
refurbishment of a further four Postgraduate exclusive sites during 2026. We
continue to expect these Postgraduate refurbishments to deliver unlevered IRRs
in excess of 12 per cent.
Portfolio management
With overall investment market activity up 13 per cent on 2023, there has been
greater opportunity to progress the tail of our non-core disposals, with eight
relatively small properties sold during the year for £45.2 million
representing 433 beds. Importantly, the sales represented four further
non-core city exits, improving the portfolio's alignment to both Prime and
Super Prime locations and top-tier universities, complimenting the improvement
in the portfolio's overall gross margin to 70 per cent.
Three acquisitions were completed during the year. All three were well
aligned, located in top-tier cities which cluster well with our existing
sites. All three acquisitions present further opportunities to add value
through future development or refurbishment.
In February 2024, we acquired College House in Bristol. Adjacent to our
College Green site, this former office building was acquired for £5.6
million. The property is arranged over five floors with a small retail parade
at street level, occupied by tenants who are complementary to our customer
base having re-let or regeared all three units. The property will be
transformed into a new 57-bed student accommodation scheme, which will cater
to post-grad students. This all studio scheme will incorporate a library and
co-working space in the basement while offering access to other amenities
including gyms and private dining rooms within our Bristol cluster. The
property is expected to open to students in early 2026. Once complete, we
anticipate this development will comfortably exceed our target five year IRR
of 12 per cent.
A second acquisition, Claremont House in Glasgow was acquired in July for
£9.7 million. Located in the heart of Glasgow's supply constrained West End,
and in close proximity to the university and our existing hub site of
Willowbank. The property which clusters extremely well with our other sites in
the city, was acquired fully let for the current sitting academic year and has
delivered a net initial yield of over 7.5 per cent since September. The
property benefits from an ability to unlock further rental growth from future
refurbishment.
In December 2024 we acquired Tatton House in Manchester for £19.75 million,
in line with the deployment plan outlined in the Company's October 2024 equity
raise, outlined above. This operational asset delivers many of the same value
enhancing opportunities that can be delivered at Claremont House and is
expected to deliver a 7.0 per cent net initial yield from September 2025.
A planning application was submitted in May 2024 to facilitate an extension
and full refurbishment of our existing operational site at Victoria Point in
Manchester. In December, Manchester City Council granted detailed planning
permission, which once implemented will add 310 new beds while allowing a
masterplan refurbishment of all existing rooms including reconfiguration to
create more studio units. The city continues to suffer an acute under supply
of PBSA beds and has consistently performed well for us from an occupancy and
rental growth perspective given the site's location and open green space. An
implementation and funding plan will now be established with a view to
starting work on site in late 2026.
Refurbishment & development
Our annual refurbishment programme continues to target the delivery of 200 to
300 beds annually, with an IRR return hurdle of between 9-11 per cent.
The 2024 refurbishment programme was focused on one of our larger properties,
Brunswick Apartments in Southampton.
This 173 bed scheme was closed for the duration of the 2023/24 academic year
to facilitate fire safety works which allowed for a full building
refurbishment and reconfiguration. The works involved refurbishment of all
rooms and the creation of a new amenity provision. Although total bed count
was unchanged, a greater studio focus was achieved, including adding some new
large one bed apartments alongside full building decarbonisation work.
The Company's decision to close the property was made following consideration
of the impact on our customers and site teams of a more staggered multi-year
works programme. It was concluded that closure would allow all works to be
carried out concurrently, thereby accelerating the programme of fire safety
and decarbonisation work alongside the refurbishment programme, ultimately
delivering the property's potential considerably earlier and improving longer
term customer satisfaction.
Upon reopening in September 2024, the scheme delivered an increase in average
weekly rents of over 50 per cent when compared to its pre-refurbishment year
of operation. Notwithstanding an element of market rental growth which is now
captured, this performance has surpassed expectations delivering a yield on
cost above 6.5 per cent and an IRR in excess of 12 per cent, inclusive of the
impact of the removal of Multiple Dwelling Relief during 2024.
The 2025 refurbishment plan is expected to deliver approximately 200
refurbishment rooms for the start of the 2025/26 academic year. Three of the
four sites undergoing refurbishment will reopen as postgraduate exclusive
accommodation from September 2025.
Commercial portfolio
The commercial estate continues to grow in quality, now comprising 34 units
across a diverse mix of uses, including retailers, restaurants, bars, and
telecoms infrastructure. A series of new agreements have strengthened the
portfolio, including a 25-year lease in central Nottingham to a large UK-based
hospitality group which opened its premium Manhattan bar concept.
Additionally, a reversionary lease agreement was made with a national Japanese
inspired restaurant operator in Selly Oak, Birmingham. Terms included a new
10-year lease and significant rental uplift, securing a popular offering and
breakout space for our customers.
We have also progressed strategic asset management initiatives to unlock
further value. One example is the replacement of a non-strategic tenant in
Nottingham with a national restaurant operator, which has agreed to take the
space on a 15-year term-certain lease while maintaining similar rent terms of
the former tenant. Another initiative involves a national supermarket chain,
where we are set to re-gear several of their convenience store leases to
increase length of tenure, enhancing long-term income stability whilst being
complementary to our student customers and the wider community.
Looking ahead, the focus within the commercial estate will be on re-gearing
leases with strong tenants, filling all vacant units, and exploring
opportunities to repurpose underutilised spaces to generate additional
revenue.
Capital expenditure programme
Progress against our five year programme of refurbishment, fire safety works
and green initiatives is set out below.
In respect to our programme of fire safety works, all properties have been
surveyed with 73 per cent of the portfolio now EWS1 certified. In arriving at
the portfolio's market value, the valuer applies a pound for pound deduction
for the forecasted cost of the remaining works as well as, if applicable, a
revenue disruption cost. Like many other real estate investors, we have
submitted compensation claims against companies involved in the assets'
construction. Given the size and repurposed nature of a large number of our
properties, the likelihood of success is less certain, but a modest
contribution has been assumed against the costs of remediation.
Undergraduate Fire safety works Green initiatives
refurbishment (£m) (£m)
(£m)
Five year Plan (2021 - 2025) 36.0 46.0 12.0
Invested to date 32.5 30.5 4.1
Forecast 2025 investment 3.5 10.1 4.2
In addition to the above, ongoing capital life cycling works continue to
require around £4.0 million per annum.
2025 is the final year of the original Capital Expenditure works programme.
Although the quantum of future capital expenditure is anticipated to be
significantly lower than that set out in this original programme, there will
be a need to revisit the forecasted spend for 2026 and beyond. Certain newly
acquired properties have been purchased with the benefit of refurbishment
potential which, given the attractive rental growth anticipated, refurbishment
remains firmly within the Group's strategic plan of capital works.
Financial Review
In October 2024, the Group successfully completed its first equity raise since
2017, raising £56.1 million, (£54.3 million net of costs) following the
placement of 60.4 million new ordinary shares representing ten per cent of the
Company's issued share capital prior to the placing announcement. Proceeds are
earmarked to accelerate growth through deployment into two new acquisition
opportunities and to fund refurbishment works required to roll out the Group's
Postgraduate product across 16 identified assets. The latter had previously
been the subject of a potential joint venture, the plans for which were
terminated given market conditions at the time provided the Company with the
opportunity to take an independent path. Abortive costs were £0.5 million.
A £124.9 million seven year refinancing was completed during the first half
of 2024, consolidating four smaller facilities which were scheduled to mature
in 2024 and 2025 and removing refinancing risk for the near term. The weighted
average cost of debt now stands at 4.5 per cent, an increase of 20 bps from 31
December 2023 and in line with guidance provided. Following the equity
placement, EPRA LTV has fallen to 27.2 per cent.
Blending like for like rental growth across the 2023/24 and 2024/25 academic
years of 10.5 per cent and 7.0 per cent respectively, the financial year of
2024 has delivered growth of 9.3 per cent. Occupancy remained strong
throughout with 99 per cent for 2023/24 and 97 per cent for 2024/25.
2024 2023
Income statement £m £m
Revenue 84.2 80.5
Property expenses (25.6) (25.2)
Gross profit 58.6 55.3
Gross margin 70% 69%
Administrative expenses (15.4) (14.0)
Operating profit 43.2 41.3
Revaluation 15.4 30.1
Losses on disposals (4.2) (0.6)
Derivative mark to market loss (1.3) (0.2)
Net finance costs (18.7) (17.2)
IFRS Profit 34.4 53.4
EBITDA 43.9 42.1
Weighted average ordinary shares (m) 616.2 603.4
IFRS EPS (pence) 5.6 8.8
EPRA EPS (pence) 4.2 4.0
Net debt to EBITDA (times) 6.8 7.6
Growth in revenue coupled with the exit of four further non-core cities has
increased the Group's overall gross margin to 70 per cent from 69 per cent in
the prior year, despite ongoing cost challenges, in particular with respect to
utility costs. Following the 2024 expiry of an historic fixed cost
arrangement, we have once again largely fixed utility costs for 2025 to
mitigate future volatility.
Administrative expenses were £15.4 million, including a £0.5 million charge
relating to abortive joint venture arrangement costs. Once removed, underlying
costs of £14.9 million were in line with expectation, increasing 6.4 per cent
on the prior year.
Notwithstanding the abolition of Multiple Dwellings Relief, the portfolio
valuation increased by £15.4 million, 1.6 per cent on a like-for-like basis.
This is primarily income led, with no overall change in the portfolio's yield
of 5.5 per cent. The valuer has taken a more cautious approach to future
income growth this year, providing the potential to outperform the current
reversionary potential of 5.7 per cent.
Eight non-core assets were disposed of during 2024, generating £45.2 million
at an overall loss of £4.2 million. Funds are earmarked for redeployment into
the Group's core capital expenditure programme. Since launching the Company's
programme of non-core asset disposals, £146.4 million has been generated at
an overall discount of 0.2 per cent to book values.
Net finance costs of £18.6 million include a charge of £0.9 million related
to accelerated debt issue cost amortisation following refinancing activity
completed in the first half of the year. On an underlying basis, net finance
costs of £17.7 million were 2.9 per cent higher than the prior year,
reflecting the higher weighted average cost of debt. All drawn debt is
currently either fixed or subject to interest rate protection.
EPRA earnings per share has increased by five per cent to 4.2 pence per share,
comfortably covering dividends paid and proposed for 2024 of 3.7 pence per
share.
2024 2023
Balance sheet £m £m
Property (market value) 1,135.0 1,097.9
Bank borrowings drawn (374.3) (360.3)
Cash on hand 75.4 40.5
Net debt (298.9) (319.8)
Other net liabilities (43.8) (43.9)
Net assets 801.3 734.2
Diluted number of shares 669.6 608.0
EPRA NTA per share (pence) 119.6 120.7
EPRA LTV 27.2% 30.6%
EPRA net tangible assets per share has reduced by 0.9 per cent to 119.6 pence.
The reduction in NTA per share is primarily due to the dilutive impact of the
placement of 60.4 million new ordinary shares at a 93 pence per share.
Although initially dilutive, it is anticipated that the deployment of placing
proceeds will result in NTA per share accretion beyond 2025.
Evolution of net asset value £m
31 December 2023 734.2
EPRA earnings 25.9
Revaluation 15.4
Capital raise (net of costs) 54.3
Dividends paid (22.0)
Loss on disposals (4.2)
Other (2.3)
31 December 2024 801.3
2024 2023 Gain(1) Change
Portfolio valuation £m £m £m %
Like for like property portfolio 1,063.9 1,031.7 16.2 1.6
Acquisitions 36.2 - (2.2)
Disposals - 49.5 (1.6)
Other non-like for like (development) 34.9 16.7 3.0
Portfolio valuation 1,135.0 1,097.9 15.4
(1) Net of capital expenditure and headlease amortisation
On a like for like basis the portfolio increased in value by 1.6 per cent
during the year. This includes the impact of the abolition of Multiple
Dwellings Relief which has materially increased purchaser cost assumptions
inherent in the valuations of our English and Welsh properties. For
comparability, the like for like valuation gain would have been 4.2 per cent
had Multiple Dwellings Relief continued to be in place at 31 December 2024.
Cities with particularly strong demand such as Bristol, Edinburgh, Glasgow and
Manchester performed well. The latter includes our site at Victoria Point on
which planning permission has been granted to add 310 new beds to the scheme.
The weakest performance was from those cities experiencing lower demand, such
as Sheffield and Leeds which have tempered the overall like for like valuation
increase.
Three acquisitions were concluded during the year in Bristol, Glasgow and
Manchester. The latter being the first of two acquisitions funded from the
proceeds of the October 2024 equity raise. Acquisitions have favoured
operational assets in top-tier university cities where the Group has an
existing operational presence and can therefore benefit from the efficiencies
realised through clustering.
Eight assets were disposed of during the year, achieving an exit from four
non-core cities; Stoke, Reading, Oxford and London. The latter two being
non-core by virtue of scale.
Our Brunswick Apartments scheme in Southampton underwent a significant
refurbishment during 2024 and was closed to students for the duration of the
2023/24 academic year. A net valuation uplift of £3.0 million has been
recorded post refurbishment. Given the quantum invested and associated
disruption to income, this property is classified in the table above as 'other
non-like for like'.
Debt
In March 2024, we refinanced four small near term debt facilities into one
consolidated seven year £124.9 million facility. Following refinancing, the
Group's weighted term to maturity has been extended to 4.7 years from 3.9
years at December 2023. The weighted average cost of debt is currently 4.5
per cent, with all drawn debt subject to interest rate protection. The next
debt maturity is not now scheduled until April 2028.
Compliance with all covenants was maintained throughout the year. With a
weighted average LTV covenant of 63 per cent and a weighted average ICR
covenant of 1.9 times, good headroom continues to remain.
2024 2023
Cashflow £m £m
Operating cash flow 43.0 43.7
Property disposals 42.6 42.6
Property acquisitions and capital expenditure (74.9) (34.0)
Finance income 0.8 0.2
Net cash flows from investing activities (31.5) 8.8
Capital raise (net of costs) 54.3 -
Dividends paid (22.5) (20.2)
Net borrowings drawn/(repaid) 14.1 (31.0)
Finance costs (22.5) (16.6)
Financing cash flows 23.4 (67.8)
Net cash flow 34.9 (15.3)
The disposal of eight small non-core assets during 2024 generated proceeds net
of disposal costs of £44.0 million. Proceeds have largely been reinvested in
the Group's core capital expenditure programme of undergraduate refurbishments
and ongoing fire safety works. Capital expenditure, together with the
acquisition of three new properties during 2024 has resulted in the deployment
of £73.1 million.
The Group's October 2024 equity raise generated £54.3 million, net of costs.
These proceeds were earmarked for acquisitions and to fund refurbishment
related capital expenditure, facilitating the transformation of 16 properties
to the Group's postgraduate specification, with associated cash deployment to
fall during 2025. Proceeds earmarked for acquisition related activity were
partly deployed toward the December 2024 acquisition of Tatton House in
Manchester, which was acquired for £19.75 million, before costs.
Cash applied toward dividend payments in the year totalled £22.5 million,
including £0.5 million of withholding tax due on the final dividend payment
in 2023, settled in January 2024.
Cash applied to the settlement of finance costs has increased compared to
2023. The Group held higher overall drawn debt at a marginally higher cost,
with the weighted cost of debt increasing from 4.3 per cent at 31 December
2023 to 4.5 per cent this year, increasing finance costs by approximately
£2.5 million. Finance cost payments also include £3.9 million paid toward
arrangement fees and hedging costs associated with the Group's £124.9 million
refinancing which was completed earlier in the year.
Going concern
The Board places particular focus on the appropriateness of adopting the going
concern assumption when preparing the Company's and the Group's financial
statements.
In light of the Group's liquidity position, its modest level of capital
commitment of £2.8 million, weighted average unexpired debt term and overall
level of gearing, the Directors have concluded that, in reasonably possible
adverse scenarios, there remains adequate resources and mitigants available to
continue to operate until at least 31 December 2026, being a period of not
less than 12 months from the date of approval of these financial statements.
The Directors therefore concluded that it remains appropriate to adopt the
going concern basis of preparation when compiling the Annual Report and
Accounts for the year ended 31 December 2024.
Attention is drawn to Note 1.4 to the financial statements for further details
surrounding the conclusion reached.
Dividends
A final interim dividend of 1.075 pence per share has been declared for the
final quarter of 2024, bringing total dividends paid and payable in respect of
2024 to 3.7 pence. This represents a six per cent increase on the total
dividend paid in respect of 2023 and a 88 per cent pay-out on EPRA EPS.
With all recent dividends having been paid entirely as Property Income
Distributions, there is sufficient headroom to pay this final dividend of the
year as an ordinary company dividend. Payment will be made on 11 April 2025 to
shareholders on the register at 28 March 2025.
Donald Grant
Chief Financial & Sustainability Officer
12 March 2025
EPRA and other alternative performance measures
Our performance in line with industry standard measures
The following is a summary of the EPRA performance measures included in the
Group's results. As defined by the EPRA Best Practice Recommendations, these
are a set of standard disclosures for the property industry designed to drive
consistency in reporting.
EPRA Measure Definition of measure Note/ reference 2024 2023
Earnings (£m) The Company's underlying earnings from operational activities 8 25.9 24.1
Net tangible assets ("NTA") The underlying value of the Company assuming it buys and sells assets 9 119.6 120.7
Net disposal value ("NDV") The value of the Company assuming assets are sold, and the liabilities are 9 122.8 124.2
settled, not held to maturity
Net reinstatement value ("NRV") The value of the assets on a long-term basis, assets and liabilities are not 9 129.6 126.8
expected to crystallise under normal circumstances
Net initial yield Rental income less operating costs divided by the market value of the Below 4.9% 5.0%
property, increased with purchasers costs
Cost ratio (incl. direct vacancy costs) Administrative & operating costs including costs of direct vacancy divided Below 49% 49%
by gross rental income.
Cost ratio (excl. direct vacancy costs) Administrative & operating costs excluding costs of direct vacancy divided Below 48% 48%
by gross rental income
Like-for-like rental income (in respect of academic year) Compares the growth in rental income that has been in operation and not under Financial review 7.0% 10.5%
development, throughout both the current and comparative year
Like-for-like capital Compares the growth in capital values of the Group's portfolio which was Financial review 1.6% 3.0%
controlled by the Group and both balance sheet dates, net of capital
expenditure and excluding development properties
Loan to value Ratio of net debt, including net payables, to the sum of the net assets, Below 27.2% 30.6%
including net receivables, of the Group, expressed as a percentage
Vacancy rate Estimated Market Rental Value ("ERV") of vacant space divided by ERV of the Below 3.4% 0.7%
whole portfolio
Other alternative performance measures
An alternative performance measure ("APM") is a financial measure of
historical or future financial performance, financial position or cash flows
of an entity which is not a financial measure defined or specified in
International Financial Reporting Standards ("IFRS").
APMs are presented to provide useful information to readers and have been, or
are still, consistent with industry standards. The table below sets out the
additional non-EPRA derived APMs included within the Annual Report and
Accounts.
Measure Definition of measure Note/ reference 2024 2023
Total Return Growth in EPRA NTA plus dividends paid as a percentage of opening EPRA NTA 31 2.0% 7.6%
Net debt (£m) Borrowings less cash and cash equivalents Financial Review 299.0 319.8
Dividend cover EPRA earnings relative to dividends declared for the year 31 114% 114%
Dividend pay-out ratio Dividends declared relative to EPRA earnings 31 88% 88%
Group
EPRA Net Initial Yield and topped-up NIY Year Ended Year Ended
31 December 2024 31 December 2023
£m £m
Investment property 1,135.0 1,097.9
Less: development (5.7) (3.0)
Completed property portfolio 1,129.3 1,094.9
Allowance for purchases cost 67.3 37.1
Grossed up completed property portfolio valuation 1,196.6 1,132.0
Annualised cash passing rental income 84.1 81.7
Property outgoings (25.6) (25.2)
Annualised net rents 58.5 56.5
Add: notional rent expiration of rent-free periods or other lease incentives 0.1 0.1
Topped-up net annualised rent 58.6 56.6
EPRA NIY 4.9% 5.0%
EPRA "topped-up" NIY 4.9% 5.0%
EPRA Cost ratios
Operating expense line per IFRS income statement 25.6 25.2
Administration costs 15.4 14.0
Ground rent costs - -
EPRA Costs (including direct vacancy costs) 41.0 39.2
Direct vacancy costs (0.2) (0.4)
EPRA Costs (excluding direct vacancy costs) 40.8 38.8
Gross Rental Income less ground rents - per IFRS 84.2 80.5
Less: service fee and service charge costs components of Gross Rental - -
Gross Rental Income 84.2 80.5
EPRA Cost Ratio (including direct vacancy costs) 49% 49%
EPRA Cost Ratio (excluding direct vacancy costs) 48% 48%
EPRA Loan to Value ("LTV")
Bank borrowings drawn 374.3 360.3
Net payables 11.4 16.8
Less cash held at the year end (75.4) (40.5)
Net borrowings 310.3 336.6
Investment property at fair value 1,118.6 1,072.5
Property held for sale 10.7 22.4
Property under development 5.7 3.0
Intangible assets 5.5 3.1
Property value 1,140.5 1,101.0
EPRA LTV 27.2% 30.6%
EPRA capital expenditure analysis
2024 2023
Acquisitions 37.2 -
Development 0.9 0.3
Investment properties
Incremental lettable space - -
No incremental lettable space 31.9 32.2
Total capex 70.0 32.5
Conversion from accrual to cash basis 2.1 (0.1)
Total capex on cash basis 72.1 32.4
EPRA vacancy rate
2024 2023
Estimated rental value of vacant space (£m) 3.0 0.7
Estimated rental value of whole portfolio (£m) 87.9 86.2
EPRA vacancy rate (%) 3.4% 0.8%
Statement of Directors' responsibilities
The statement of Directors' responsibilities has been prepared in relation to
the Group's Annual Report 2024. Certain parts of the Annual Report are not
included in this announcement.
We confirm to the best of our knowledge:
• the Group financial statements, which have been prepared in
accordance with IFRS, give a true and fair view of the assets, liabilities,
financial position and profit of the Group; and
• the strategic report includes a fair review of the development and
performance of the business and the position of the Group.
Signed on behalf of the Board on 12 March 2025 by:
Donald Grant
Director
Consolidated Statement of Comprehensive Income
Note Year ended Year ended
31 December 31 December
2024 2023
£m £m
Continuing operations
Revenue 2 84.2 80.5
Property expenses 3 (25.6) (25.2)
Gross profit 58.6 55.3
Administrative expenses 4 (15.4) (14.0)
Loss on disposal of investment property (4.2) (0.6)
Change in fair value of investment property 11,16 15.4 30.1
Operating profit 54.4 70.8
Finance costs 5 (19.5) (17.4)
Finance income 5 0.8 0.2
Derivative fair value movement (1.3) (0.2)
Profit before income tax 34.4 53.4
Corporation tax 7 - -
Profit for the year and total comprehensive income 34.4 53.4
Earnings per share expressed in pence per share 8
Basic 5.6 8.8
Diluted 5.5 8.8
Consolidated Statement of Financial Position
Note At At
31 December
31 December
2024
2023
£m
£m
ASSETS
Non-current assets
Investment property - Operational Assets 11 1,118.9 1,072.7
Investment property - Development Assets 11 6.0 3.0
Property, plant and equipment 13 0.8 0.8
Intangible assets 12 5.5 3.1
Right of use asset 1.0 1.2
Total non-current assets 1,132.2 1,080.8
Current assets
Trade and other receivables 14 7.9 6.5
Assets classified as held for sale 15 10.7 22.4
Cash and cash equivalents 16 75.4 40.5
Derivative fair value 0.5 0.1
Total current assets 94.5 69.5
Total assets 1,226.7 1,150.3
LIABILITIES
Current liabilities
Trade and other payables 17 19.2 23.4
Borrowings 18 - 56.5
Lease liability 0.2 0.1
Deferred income 17 34.8 34.9
Total current liabilities 54.2 114.9
Non-current liabilities
Borrowings 18 370.4 300.2
Lease liability 0.8 1.0
Total non-current liabilities 371.2 301.2
Total liabilities 425.4 416.1
Total net assets 801.3 734.2
Equity
Called up share capital 19 6.6 6.0
Share premium 20 54.1 0.3
Capital reduction reserve 21 402.1 424.1
Retained earnings 338.5 303.8
Total equity 801.3 734.2
Total equity and liabilities 1,226.7 1,150.3
Net Asset Value per share basic (pence) 9 120.7 121.7
Net Asset Value per share diluted (pence) 9 119.7 120.8
EPRA NTA per share (pence) 9 119.6 120.7
These financial statements were approved by the Board of Directors on 12 March
2024 and signed on its behalf by:
Donald Grant
Director
Company Statement of Financial Position
Note At At
31 December 31 December
2024 2023
£m £m
Fixed assets
Investments in subsidiaries 30 222.6 222.6
Property, plant and equipment 13 0.8 0.7
Intangible assets 12 5.5 3.1
Right of use asset 1.0 1.2
Total fixed assets 229.9 227.6
Current assets
Amounts due from Group undertakings 14 819.4 391.4
Trade and other receivables 14 0.7 0.7
Cash and cash equivalents 16 24.7 2.4
Total current assets 844.8 394.5
Current creditors
Amounts due to Group undertakings 17 454.8 111.0
Trade and other payables 17 2.1 3.4
Lease liability 0.2 0.1
Total current creditors 457.1 114.5
Total assets less current liabilities 617.6 507.6
Net current assets 387.7 280.0
Non-current creditors
Lease liability 0.8 1.0
Total non-current creditors 0.8 1.0
Total net assets 616.8 506.6
Capital and reserves
Called up share capital 19 6.6 6.0
Share premium 20 54.1 0.3
Capital reduction reserve 21 402.1 424.1
Retained earnings 154.0 76.2
Total capital and reserves 616.8 506.6
The Company made a profit for the year of £77.5 million (2023: loss of £13.1
million).
These financial statements were approved by the Board of Directors on 12 March
2024 and signed on its behalf by:
Donald Grant
Director
Consolidated Statement of Changes in Equity
Year ended 31 December 2024 Called up Share premium Capital reduction reserve Retained Total
share capital £m £m earnings equity
£m £m £m
Balance at 1 January 2024 6.0 0.3 424.1 303.8 734.2
Profit for the year - - - 34.4 34.4
Total comprehensive income for the year - - - 34.4 34.4
Share-based payments - 0.1 - 0.3 0.4
Issue of shares net of fund raising costs 0.6 53.7 - - 54.3
Dividends - - (22.0) - (22.0)
Amounts recognised directly in equity 0.6 53.8 (22.0) 0.3 32.7
Balance at 31 December 2024 6.6 54.1 402.1 338.5 801.3
Balance at 1 January 2023 6.0 0.3 444.7 249.8 700.8
Profit for the year - - - 53.4 53.4
Total comprehensive income for the year - - - 53.4 53.4
Share-based payments - - - 0.7 0.7
Reserves transfer - - 0.1 (0.1) -
Dividends - - (20.7) - (20.7)
Amounts recognised directly in equity - - (20.6) 0.6 (20.0)
Balance at 31 December 2023 6.0 0.3 424.1 303.8 734.2
Company Statement of Changes in Equity
Year ended 31 December 2024 Called up Share premium Capital Retained Total
Share £m reduction earnings equity
capital
reserve £m £m
£m
£m
Balance at 1 January 2024 6.0 0.3 424.1 76.2 506.6
Profit for the year - - - 77.5 77.5
Total comprehensive income for the year - - - 77.5 77.5
Share-based payments - 0.1 - 0.3 0.4
Issue of shares net of fund raising costs 0.6 53.7 - - 54.3
Dividends - - (22.0) - (22.0)
Amounts recognised directly in equity 0.6 53.8 (22.0) 0.3 32.7
Balance at 31 December 2024 6.6 54.1 402.1 154.0 616.8
Balance at 1 January 2023 6.0 0.3 444.7 88.7 539.7
Loss for the year - - - (13.1) (13.1)
Total comprehensive income for the year - - - (13.1) (13.1)
Share-based payments - - - 0.7 0.7
Reserves transfer - - 0.1 (0.1) -
Dividends - - (20.7) - (20.7)
Amounts recognised directly in equity - - (20.6) 0.6 (20.0)
Balance at 31 December 2023 6.0 0.3 424.1 76.2 506.6
Consolidated Statement of Cash Flows
Note Year ended Year ended
31 December 31 December
2024 2023
£m £m
Cash flows from operating activities
Profit before income tax 34.4 53.4
Share-based payments expense 0.4 0.9
Depreciation and amortisation 0.6 0.8
Finance costs 19.5 17.4
Finance income (0.8) (0.2)
Loss on disposal of investment property 4.2 0.6
Change in fair value of investment property (15.4) (30.1)
Change in fair value of derivative 1.3 0.2
44.2 43.0
(Increase)/decrease in trade and other receivables (1.5) 0.3
Decrease in trade and other payables (1.0) (2.0)
Increase in deferred rental income 1.3 2.4
(1.2) 0.7
Net cash flows generated from operations 43.0 43.7
Cash flows from investing activities
Purchases of tangible fixed assets (0.1) -
Purchases of intangible assets (2.7) (1.6)
Purchase and development of investment property (72.1) (32.4)
Proceeds on disposal of asset held for sale, net of selling costs 11.5 13.6
Proceeds on disposal of investment property, net of selling costs 31.1 29.0
Finance income 0.8 0.2
Net cash flows (deployed to)/from investing activities (31.5) 8.8
Cash flows from financing activities
Dividends paid (22.5) (20.2)
Proceeds from equity raise, net of costs 54.3 -
Bank borrowings drawn 28 164.9 -
Bank borrowings repaid 28 (150.8) (30.9)
Loan arrangement fee paid 28 (2.2) (0.1)
Lease liability paid 28 (0.2) (0.3)
Derivative premium paid (1.7) (0.3)
Interest rate cap termination receipt 0.1 -
Finance costs (18.5) (16.0)
Net cash flows generated from/(used in) financing activities 23.4 (67.8)
Increase/(decrease) in cash and cash equivalents 34.9 (15.3)
Cash and cash equivalents at beginning of year 16 40.5 55.8
Cash and cash equivalents at end of year 16 75.4 40.5
Notes to the Financial Statements
1. ACCOUNTING POLICIES
1.1 Period of Account
The consolidated financial statements of the Group are in respect of the
reporting period from 1 January 2024 to 31 December 2024.
The consolidated financial statements comprise the results of Empiric Student
Property plc (the "Company") and its subsidiaries and were approved by the
Board for issue on 12 March 2025. The Company is a public limited company
incorporated and domiciled in England and Wales. The Company's ordinary shares
are admitted to the official list of the UK Listing Authority, a division of
the Financial Conduct Authority, and traded on the London Stock Exchange. The
registered address of the Company is disclosed in the Company information.
1.2 Basis of Preparation
The consolidated financial statements of the Group for the year to 31 December
2024 comprise the results of Empiric Student Property plc (the "Company") and
its subsidiaries (together, the "Group"). The Group and Parent Company
financial statements have been prepared on a going concern basis. The Group
financial statements have been prepared in accordance with UK adopted
international accounting standards. The Parent Company financial statements
have been prepared in accordance with FRS 101, Financial Reporting Standards
Reduced Disclosure Framework.
The Group's financial statements have been prepared on a historical cost
basis, except for investment property and derivative financial instruments
which have been measured at fair value. The consolidated financial statements
are presented in Pounds Sterling which is also the Company and the Group's
functional currency.
The Company has applied the exemption allowed under section 408(1b) of the
Companies Act 2006 and has therefore not presented its own Statement of
Comprehensive Income in these financial statements. The Group profit for the
year includes a profit after taxation of £77.5 million (2023: loss of £13.1
million) for the Company, which is reflected in the financial statements of
the Company.
The financial information contained within this release does not constitute
the Group's statutory accounts for the year ended 31 December 2024 or the year
ended 31 December 2023 but is derived from those accounts. The Group's
statutory accounts for the year ended 31 December 2023 have been delivered to
the Registrar of Companies. The Group's statutory accounts for the year ended
31 December 2024 will be delivered to the Registrar of Companies in due
course. The Auditor has reported on both the December 2024 and December 2023
accounts; the reports were unqualified, did not include a reference to any
matters to which the Auditor drew attention by way of emphasis without
qualifying their report and did not contain any statement under Section 498 of
the Companies Act 2006.
1.3 Disclosure Exemptions Adopted
In preparing the financial statements of the Parent Company, advantage has
been taken of all disclosure exemptions conferred by FRS 101. The Parent
Company financial statements do not include:
• certain comparative information as otherwise required by
international accounting standards;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted; and
• disclosure of related party transactions with other wholly owned
members of the Group headed by Empiric Student Property plc.
In addition, and in accordance with FRS 101, further disclosure exemptions
have been adopted because equivalent disclosures are included in the
consolidated financial statements of Empiric Student Property plc. The Parent
Company financial statements do not include certain disclosures in respect of:
• Financial instruments (other than certain disclosures required as a
result of recording financial instruments at fair value); and
• Fair value measurement (other than certain disclosures required as a
result of recording financial instruments at fair value).
1.4 Going Concern
At 31 December 2024, the Group's cash position was £75.4 million and its
capital commitments were £2.8 million.
Occupancy is a key driver of profitability and cash flows, and at 12 March
2025 occupancy, based on forward reservations for the upcoming 2025/26
academic year, was 48 per cent compared to 61 per cent for the 2024/25
academic year at 13 March 2024.
As part of the Group's going concern and viability modelling, certain
scenarios are considered to model the impact on liquidity. All of the Group's
covenants are currently compliant and we envisage compliance to continue to be
achieved in a reasonably severe downside scenarios. The Group's portfolio
could currently withstand a 16 per cent decline in property valuations before
a breach in any loan to value covenant is triggered. The Group's average
interest cover ratio across all facilities is 1.9 times, whereas gross profit
is currently in excess of 3.0 times total finance costs, providing a good
degree of comfort. Following refinancing completed during 2024, exposure to
interest rate volatility has been significantly mitigated.
Bank borrowings would be renegotiated in advance of any potential covenant
breaches, insofar as factors are within the control of the Group. Facility
agreements typically contain cure provisions providing for prepayment, cash
deposits or security enhancement as may be required to mitigate any potential
breach. The Group's borrowings are spread across a range of lenders and
maturities so as to minimise any potential concentration of risk.
The Directors have considered the Group's principal risks and severe but
plausible downside scenarios in assessing the Group's and Company's going
concern for the period to 31 December 2026. The Directors have considered, in
particular:
• a material reduction in revenue, both in terms of occupancy and
growth rate;
• inflation rates of 5 per cent, significantly above the Bank of
England target rate of 2 per cent;
• utilities costs increase by 1.5 times that of current market
expectation (where price fixing arrangements are not in place);
• floating interest rates increase by 1.0 per cent over current
forecasts;
• an immediate valuation shock of minus 10 per cent in property
valuations;
• individually, the level at which banking covenants would come under
pressure;
In addition, the Directors have considered potential mitigants to the downside
scenario which include, but are not limited to, utilising existing liquidity
reserves, further asset disposals, pledging as security ungeared properties,
suspending non committed capital expenditure and temporary suspension of the
dividend.
Having made enquiries, the Directors have reasonable expectation that the
Group and Company have adequate resources to continue in operational existence
for the period to 31 December 2026. In addition, having reassessed the Group
and Company's principal risks, the Directors considered it appropriate to
adopt the going concern basis of accounting in preparing these financial
statements.
1.5 Significant Accounting Estimates and Judgements
The preparation of the Group's financial statements requires management to
make estimates and judgements that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent
liabilities, at the reporting date. However, uncertainty about these estimates
and judgements could result in outcomes that require a material adjustment to
the carrying amount of the asset or liability affected in future periods.
Estimates
In the process of applying the Group's accounting policies, management has
made the following estimates, which have the most significant effect on the
amounts recognised in the consolidated financial statements:
(a) Fair Valuation of Investment Property
The market value of investment property is determined, by an independent
external real estate valuation expert, to be the estimated amount for which a
property should exchange on the date of the valuation in an arm's length
transaction. Properties have been valued on an individual basis. The valuation
experts use recognised valuation techniques and the principles of IFRS 13.
The valuations have been prepared in accordance with the RICS Valuation -
Global Standards (incorporating the International Valuation Standards) and the
UK national supplement (the "Red Book"). Factors reflected include current
market conditions, net underlying operational income, periodic rentals, lease
lengths and location, as well as estimated costs to be incurred as part of the
Group's EWS programme. The significant methods and assumptions used by valuers
in estimating the fair value of investment property are set out in Note 11.
For properties under development, the fair value is calculated by estimating
the fair value of the completed property using the income capitalisation
technique less estimated costs to completion and an appropriate developer's
margin.
(b) Expected Credit Loss
Impairment provisions for trade receivables are recognised based on the
simplified approach within IFRS 9 using the lifetime expected credit losses.
During this process the probability of the non-payment of the trade receivable
is assessed. This probability is then multiplied by the amount of the expected
loss arising from default to determine the lifetime expected credit loss for
the trade receivables. For trade receivables, which are reported net of
impairment provisions, such provisions are recorded in a separate provision
account with the loss being recognised within cost of sales in the Statement
of Comprehensive Income.
Judgements
In the process of applying the Group's accounting policies, management has
made the following judgements, which have the most significant effect on the
amounts recognised in the consolidated financial statements:
(a) Operating Lease Contracts - the Group as Lessor
The Group has investment properties which have various categories of leases in
place with tenants. The judgements by lease type are detailed below:
• Student leases: As these leases all have a term of less than one
year, the Group retains all the significant risks and rewards of ownership of
these properties and so accounts for the leases as operating leases.
• Commercial leases: The Group has determined, based on an evaluation
of the terms and conditions of the arrangements, particularly the lease terms,
insurance requirements and minimum lease payments, that it retains all the
significant risks and rewards of ownership of these properties and so accounts
for the leases as operating leases.
1.6 Summary of Material Accounting Policies
Basis of Consolidation
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries as at 31 December 2024. Subsidiaries are those
investee entities where control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, it has:
(a) power over the investee (i.e. existing rights that give it the current
ability to direct the relevant activities of the investee);
(b) exposure, or rights, to variable returns from its involvement with the
investee; and
(c) the ability to use its power over the investee to affect its returns.
The Group reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of
the subsidiary.
The financial statements of the subsidiaries are prepared for the same
reporting period as the Parent Company, using consistent accounting policies.
All intra-Group balances, transactions and unrealised gains and losses
resulting from intra-Group transactions are eliminated in full.
Financial Assets
The Group classifies its financial assets into one of the categories discussed
below, depending on the purpose for which the asset was acquired.
Fair Value Through Profit or Loss
These are carried in the Statement of Financial Position at fair value with
changes in fair value recognised in the Statement of Comprehensive Income.
This includes the Group's derivative financial instruments.
Amortised Cost
These assets are primarily from the provision of goods and services to
customers (e.g. trade receivables). They are initially recognised at fair
value plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
Impairment provisions for trade receivables are recognised based on the
simplified approach within IFRS 9 using the lifetime expected credit losses.
During this process the probability of the non-payment of the trade receivable
is assessed. This probability is then multiplied by the amount of the expected
loss arising from default to determine the lifetime expected credit loss for
the trade receivables. For trade receivables, which are reported net of
impairment provisions, such provisions are recorded in a separate provision
account with the loss being recognised within cost of sales in the Statement
of Comprehensive Income. On confirmation that the trade receivable will not be
collectable, the gross carrying value of the asset is written off against the
associated provision.
Impairment provisions for intercompany receivables are recognised based on a
forward-looking expected credit loss model. The methodology used to determine
the amount of the provision is based on whether there has been a significant
increase in credit risk since initial recognition of the financial asset. For
those where the credit risk has not increased significantly since initial
recognition of the financial asset, 12-month expected credit losses against
gross interest income are recognised. For those where the credit risk has
increased significantly, lifetime expected credit losses along with the gross
interest income are recognised. For those that are determined to be credit
impaired, lifetime expected credit losses along with interest income on a net
basis are recognised.
From time to time, the Group elects to renegotiate the terms of trade
receivables due from customers with which it has previously had a good trading
history. Such renegotiations will lead to changes in the timing of payments
rather than changes to the amounts owed and, in consequence, the new expected
cash flows are discounted at the original effective interest rate and any
resulting difference to the carrying value is recognised in the Statement of
Comprehensive Income (operating profit).
The Group's financial assets measured at amortised cost comprise trade and
other receivables and cash and cash equivalents in the Statement of Financial
Position.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, short-term deposits and other
short-term highly liquid investments with maturities of three months or less.
Financial Liabilities
The Group classifies all of its financial liabilities as other financial
liabilities which include the following items:
• Bank borrowings, which are initially recognised at fair value net of
any transaction costs directly attributable to the issue of the instrument.
Such interest-bearing liabilities are subsequently measured at amortised cost
using the effective interest rate method, which ensures that any interest
expense over the period to repayment is at a constant rate on the balance of
the liability carried in the Consolidated Statement of Financial Position. For
the purposes of each financial liability, interest expense includes initial
transaction costs and any premium payable on redemption, as well as any
interest or coupon payable while the liability is outstanding.
• Trade payables and other short-term monetary liabilities, which are
initially recognised at fair value and subsequently carried at amortised cost
using the effective interest method.
Intangible Assets
An intangible asset is recognised when it can be separately identified, will
provide future economic benefits, and its cost can be reliably measured.
Further consideration is given to each intangible asset as to whether it is
internally generated or externally acquired.
Intangible assets are initially recognised at cost and then subsequently
recognised at cost less accumulated depreciation and impairment losses.
Amortisation is charged to the Consolidated Statement of Comprehensive Income
within administrative expenses on a straight-line basis over a period of ten
years. Intangible assets that are undergoing development are not amortised
until such a time that they are ready for use.
Investment Property
Investment property comprises property that is held to generate rental income
or for capital appreciation. This includes property under development rather
than for sale in the ordinary course of business.
Investment property is measured initially at cost including transaction costs
and is included in the financial statements on unconditional exchange.
Transaction costs include transfer taxes, professional fees and initial
leasing commissions to bring the property to the condition necessary for it to
be capable of operating.
Once purchased, investment property is stated at fair value. Gains or losses
arising from changes in fair value are included in the Consolidated Statement
of Comprehensive Income in the period in which they arise.
A property ceases to be recognised as investment property and is transferred
at its fair value to property held for sale when it meets the criteria of IFRS
5. Under IFRS 5 the asset must be available for immediate sale in its present
condition subject only to the terms that are usual and customary for sales of
such assets and its sale must be highly probable.
Investment property is derecognised when it has been disposed of, or
permanently withdrawn from use, and no future economic benefit is expected
from its disposal. The investment property is derecognised upon unconditional
exchange. The difference between the net disposal proceeds and the carrying
amount of the asset would result in either a gain or loss at the retirement or
disposal of investment property. Any gains or losses are recognised as a net
gain or loss on disposal of investment property in the Consolidated Statement
of Comprehensive Income in the period of retirement or disposal.
Property, Plant and Equipment
All property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure which is directly
attributable to the acquisition of the asset.
Depreciation has been charged to the Consolidated Statement of Comprehensive
Income within administrative expenses on the following basis:
• Fixtures and fittings: straight-line basis over seven years;
and
• Computer equipment: straight-line basis over three years.
Rental Income
The Group is the lessor in respect of operating leases. Rental income arising
from operating leases on investment property is accounted for on a
straight-line basis over the lease term and is included in gross rental income
in the Consolidated Statement of Comprehensive Income due to its operating
nature.
Tenant lease incentives are recognised as a reduction of rental revenue on a
straight-line basis over the term of the lease. The lease term is the
non-cancellable period of the lease together with any further term for which
the tenant has the option to continue the lease, where, at the inception of
the lease, the Directors are reasonably certain that the tenant will exercise
that option.
Amounts received from tenants to terminate leases or to compensate for
dilapidations are recognised in the Consolidated Statement of Comprehensive
Income when the right to receive them arises.
Where a student requests a rent refund and they meet the necessary criteria,
including leaving the property, the Group recognise no further income in
relation to that tenancy.
Segmental Information
The Directors are of the opinion that the Group is engaged in a single segment
business, being the investment in student and associated commercial lettings,
within the United Kingdom.
Share-based Payments
Where share options are awarded to employees or Directors, the fair value of
the options at the date of grant is charged to the Consolidated Statement of
Comprehensive Income over the vesting period. Non-market vesting conditions
are taken into account by adjusting the number of equity instruments expected
to vest at each reporting date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of options that
eventually vest. Non-vesting conditions and market vesting conditions are
factored into the fair value of the options granted. So long as all other
vesting conditions are satisfied, a charge is made irrespective of whether the
market vesting conditions are satisfied.
Share Capital
Ordinary shares are classified as equity. External costs directly attributable
to the issuance of shares are recognised as a deduction from equity.
Taxation
As the Group is a UK REIT, profits arising in respect of the property rental
business are not subject to UK corporation tax.
Taxation in respect of profits and losses outside of the property rental
business comprise current and deferred taxes. Taxation is recognised in the
Consolidated Statement of Comprehensive Income except to the extent that it
relates to items recognised as a direct movement in equity, in which case it
is also recognised as a direct movement in equity.
Current tax is the total of the expected corporation tax payable in respect of
any non-REIT taxable income for the year and any adjustment in respect of
previous periods, based on tax rates applicable to the periods.
Deferred tax is calculated in respect of temporary differences between the
carrying amount of assets and liabilities for financial reporting purposes and
their tax bases, based on tax rates enacted or substantively enacted at the
balance sheet date.
Deferred tax liabilities are recognised in full except to the extent that they
relate to the initial recognition of assets and liabilities not acquired in a
business combination. Deferred tax assets are only recognised to the extent
that it is considered probable that the Group will obtain a tax benefit when
the underlying temporary differences unwind.
1.7 Impact of New Accounting Standards and Changes in Accounting Policies
At the date of authorisation of these financial statements, the following
accounting standards had been issued but are not yet effective:
• IFRS 9 and IFRS 7 Classification and Measurement of Financial
Instruments
• IFRS 18 Presentation and Disclosure in Financial Statements
• IFRS 19 Subsidiaries without Public Accountability: Disclosures
The above standards or interpretations not yet effective are not expected to
have a material impact on the consolidated financial statements of the Group.
2. REVENUE
Group
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Student rental income 82.6 79.0
Commercial rental income 1.6 1.5
Total revenue 84.2 80.5
3. PROPERTY EXPENSES
Group
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Direct site costs (income generating properties) 5.8 5.0
Technology services 0.6 0.7
Site office and utilities 14.3 14.3
Cleaning and service contracts 3.2 3.3
Repairs and maintenance 1.7 1.9
Total property expenses 25.6 25.2
4. ADMINISTRATIVE EXPENSES
Group
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Salaries and Directors' remuneration 8.9 8.8
Legal and professional fees 1.6 1.4
Other administrative costs 1.9 1.3
Depreciation and amortisation 0.6 0.8
IT expenses 1.3 1.0
Internal audit fees(1) 0.1 -
Abortive acquisition costs 0.5 0.1
Administrative expenses excluding external audit fees 14.9 13.3
Fees payable for the audit of the Group's annual results 0.4 0.3
Fees payable for the audit of the Group's interim results 0.1 0.1
Fees payable for the audit of the Group's subsidiaries - 0.2
Total external audit fees(1) 0.5 0.6
Total administrative expenses 15.4 14.0
(1 ) Audit and related fees for the year ended 31 December 2023 includes
£0.1 million arising in respect of the audit for the year ended 31 December
2022. In both years, external audit services were carried out by BDO and
internal audit services were carried out by Grant Thornton.
5. NET FINANCE COSTS
Group
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Finance costs
Interest expense on bank borrowings 17.8 16.2
Amortisation of loan transaction costs 1.7 1.2
19.5 17.4
Finance income
Interest received on bank deposits 0.8 0.2
Net finance costs 18.7 17.2
6. EMPLOYEES AND DIRECTORS
Group Company
Year ended Year ended Year ended Year ended
31 December 31 December 31 December 31 December
2024 2023 2024 2023
£m £m £m £m
Wages and salaries 13.7 12.3 6.0 5.2
Pension costs 0.9 0.7 0.4 0.5
Cash bonus 0.5 1.3 0.3 0.9
Share-based payments 0.4 0.9 0.4 0.9
National insurance 1.4 1.4 0.7 0.6
16.9 16.6 7.8 8.1
Less: Hello Student employee costs included within property expenses (7.5) (7.7) - -
Less: capitalised salaries (0.5) - (0.5) -
Amounts included in administrative expenses 8.9 8.9 7.3 8.1
The average monthly number of employees:
Management - Company 5 5 5 5
Administration - Company 70 60 70 60
Operations - Hello Student Management Limited 299 293 - -
374 358 75 65
Group
Directors' remuneration Year ended Year ended
31 December 2024 31 December 2023
£m £m
Salaries and fees 1.0 1.0
Pension costs 0.1 0.1
Bonus 0.1 0.5
Share-based payments 0.3 0.6
1.5 2.2
A summary of the Directors' emoluments, including the disclosures required by
the Companies Act 2006 is set out in the Directors' Remuneration Report.
7. CORPORATION TAX
The Group became a REIT on 1 July 2014 and as a result does not pay UK
corporation tax on its profits and gains from its qualifying property rental
business in the UK provided it meets certain conditions. Non-qualifying
profits and gains of the Group continue to be subject to corporation tax as
normal.
In order to achieve and retain REIT status, several conditions have to be met
on entry to the regime and on an ongoing basis, including:
• at the start of each accounting period, the assets of the property
rental business (plus any cash and certain readily realisable investments)
must be at least 75% of the total value of the Group's assets;
• at least 75% of the Group's total profits must arise from the
tax-exempt property rental business; and
• at least 90% of the tax exempt profit of the property rental
business (excluding gains) of the accounting period must be distributed.
In addition, the full UK corporation tax exemption in respect of the profits
of the property rental business will not be available if the profit financing
cost ratio in respect of the property rental business is less than 1.25.
The Directors intend that the Group should continue as a REIT for the
foreseeable future, with the result that deferred tax is not required to be
recognised in respect of temporary differences relating to the property rental
business.
Group
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Current tax
Income tax charge for the year - -
Adjustment in respect of prior year - -
Total current income tax charge in the income statement - -
Deferred tax
Total deferred income tax charge in the income statement - -
Total current income tax charge in the income statement - -
The tax assessed for the year is lower than the standard rate of corporation
tax in the year
Profit for the year 34.4 53.4
Profit before tax multiplied by the rate of corporation tax in the UK of 25% 8.6 12.5
(2023: 23.5%)
Exempt property rental profits in the year (8.2) (9.1)
Exempt property revaluations in the year (3.9) (7.1)
Effects of:
Non-allowable expenses 0.2 0.1
Unutilised current year tax losses 3.3 3.6
Total current income tax charge in the income statement - -
No deferred tax asset has been recognised in respect of gross tax losses of
£60.6 million (2023: £48.8 million), accelerated capital allowances of £4.2
million (2023: £3.8 million) and share based payments of £2.5 million (2023:
£2.1 million) on the basis that the business is not expected to generate
taxable profits in future periods against which these amounts can be applied.
Therefore, a deferred tax asset of £16.2 million (2023: £13.1 million) has
not been recognised in respect of such timing differences.
8. EARNINGS PER SHARE
The number of shares used in the calculation of basic earnings per share is
based on the time weighted average number of shares throughout the year.
Basic EPS is calculated by dividing the earnings attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding
during the year.
Diluted EPS is calculated using the weighted average number of shares adjusted
to assume the conversion of all dilutive potential ordinary shares.
EPRA EPS, reported on the basis recommended for real estate companies by EPRA,
is a key measure of the Group's operating results, and used by the Board to
assess the Group's dividend payments.
The Group has early adopted EPRA's Best Practice Recommendations issued in
September 2024 for accounting periods beginning on or after 01 October 2024.
The impact of adoption has led to a refinement of the EPRA Earnings Per Share
(EPS) metric, introduced to ensure EPRA's earnings metric remains robust,
accurate and aligned to both its original definition and applied consistently
across the sector.
The primary amendment made allows Companies to make adjustments for items
considered to be non-operating, unusual or exceptional within the calculation
of EPRA EPS, thereby reducing the need for Company adjusted earnings metrics.
During the year two exceptional non-recurring charges totalling £1.4 million
were made, which have been adjusted for in arriving at EPRA Earnings and EPRA
EPS, as set out below. There were no equivalent charges in the comparative
period and therefore no change to EPRA Earnings or EPRA EPS as a result of
adoption.
The calculation of each earnings measure is set out below:
Calculation of basic EPS Calculation of diluted EPS Calculation of EPRA basic EPS Calculation of EPRA diluted EPS
£m £m £m £m
Year to 31 December 2024
Earnings per IFRS statement of comprehensive income 34.4 34.4 34.4 34.4
Adjustments to remove:
Changes in fair value of investment property - - (15.4) (15.4)
Loss on disposal of investment property - - 4.2 4.2
Loss on derivative financial instruments - - 1.3 1.3
Accelerated debt issue cost amortisation on refinancing - non-recurring - - 0.9 0.9
Abortive costs in relation to prospective Joint Venture - non-recurring - - 0.5 0.5
Earnings 34.4 34.4 25.9 25.9
Weighted average number of shares (m) 616.2 616.2 616.2 616.2
Adjustment for employee share options (m) - 5.6 - 5.6
Total number shares (m) 616.2 621.8 616.2 621.8
Earnings per share (pence) 5.6 5.5 4.2 4.2
Calculation of basic EPS Calculation of diluted EPS Calculation of EPRA basic EPS Calculation of EPRA diluted EPS
£m £m £m £m
Year to 31 December 2023
Earnings per IFRS statement of comprehensive income 53.4 53.4 53.4 53.4
Adjustments to remove:
Loss on disposal of investment property - - 0.6 0.6
Changes in fair value of investment property - - (30.1) (30.1)
Loss on derivative financial instruments 0.2 0.2
Earnings 53.4 53.4 24.1 24.1
Weighted average number of shares (m) 603.4 603.4 603.4 603.4
Adjustment for employee share options (m) - 4.6 - 4.6
Total number shares (m) 603.4 608.0 603.4 608.0
Earnings per share (pence) 8.8 8.8 4.0 4.0
9. NET ASSET VALUE PER SHARE
The principles of the three EPRA measures are set out below:
EPRA Net Reinstatement Value ("NRV"): Assumes that entities never sell assets
and aims to represent the value required to reinstate entity assets.
EPRA Net Tangible Assets ("NTA"): Assumes that entities buy and sell assets,
which crystalises unavoidable deferred tax.
EPRA Net Disposal Value ("NDV"): Represents the shareholders' value under a
disposal scenario, where deferred tax, financial instruments and certain other
adjustments are calculated to the full extent of their liability, net of any
resulting tax. As the Group is a REIT, no adjustment is made for deferred tax.
The Group considers EPRA NTA to be the most relevant measure and this is used
as the Group's primary NAV measure.
A reconciliation of the three EPRA NAV metrics from IFRS NAV is shown in the
table below.
NAV EPRA NAV measures
Year ended 31 December 2024 IFRS EPRA EPRA EPRA
£m NTA NRV NDV
£m £m £m
Net assets per Statement 801.3 801.3 801.3 801.3
of Financial Position
Adjustments
Fair value of fixed rate debt - - - 20.7
Derivative fair value - (0.5) (0.5) -
Purchaser's costs(1) - - 67.3 -
Net assets used in per share calculation 801.3 800.8 868.1 822.0
Number of shares in issue
Issued share capital (m) 664.0 664.0 664.0 664.0
Issued share capital plus employee options (m) 669.6 669.6 669.6 669.6
Net Asset Value per share
Basic Net Asset Value per share (pence) 120.7
Diluted Net Asset Value per share (pence) 119.7 119.6 129.6 122.8
NAV EPRA NAV measures
Year ended 31 December 2023 IFRS EPRA EPRA EPRA
£m NTA NRV NDV(1)
£m £m £m
Net assets per Statement of Financial Position 734.2 734.2 734.2 734.2
Adjustments
Fair value of fixed rate debt - - - 20.9
Derivative fair value - (0.1) (0.1) -
Purchaser's costs(2) - - 37.1 -
Net assets used in per share calculation 734.2 734.1 771.2 755.1
Number of shares in issue
Issued share capital (m) 603.4 603.4 603.4 603.4
Issued share capital plus employee options (m) 608.0 608.0 608.0 608.0
Net Asset Value per share
Basic Net Asset Value per share (pence) 121.7
Diluted Net Asset Value per share (pence) 120.8 120.7 126.8 124.2
(1 ) Restated to reflect full application of the equity method.
(2 ) EPRA NTA and EPRA NDV reflect IFRS values which are net of
purchaser's costs. Any purchaser's costs deducted from the market value are
added back when calculating EPRA NRV.
10. DIVIDENDS PAID
Group and Company
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Interim dividend of 0.875 pence per ordinary share in respect of the quarter 5.3
ended 31 December 2022
Interim dividend of 0.8125 pence per ordinary share in respect of the quarter 4.9
ended 31 March 2023
Interim dividend of 0.8125 pence per ordinary share in respect of the quarter 4.9
ended 30 June 2023
Interim dividend of 0.9375 pence per ordinary share in respect of the quarter 5.6
ended 30 September 2023
Interim dividend of 0.9375 pence per ordinary share in respect of the quarter 5.7
ended 31 December 2023
Interim dividend of 0.875 pence per ordinary share in respect of the quarter 5.3
ended 31 March 2024
Interim dividend of 0.875 pence per ordinary share in respect of the quarter 5.3
ended 30 June 2024
Interim dividend of 0.875 pence per ordinary share in respect of the quarter 5.7
ended 30 September 2024
22.0 20.7
As at 31 December 2024, no withholding tax was recorded in trade payables
(2023: £0.5 million). On 12 March 2025 the Company declared a dividend of
1.075 pence per share to be paid on 11 April 2025.
11. INVESTMENT PROPERTY
Group
Year ended 31 December 2024 Investment Investment Total operational assets Property under development Total
property property £m £m investment
freehold long leasehold property
£m £m £m
As at 1 January 2024 940.0 132.7 1,072.7 3.0 1,075.7
Capital expenditure 25.4 6.1 31.5 1.3 32.8
Property acquisitions 31.3 - 31.3 5.9 37.2
Sale of investment property (32.7) - (32.7) (3.0) (35.7)
Transfer to held for sale asset (2.7) - (2.7) - (2.7)
Change in fair value during the year* 12.3 6.5 18.8 (1.2) 17.6
As at 31 December 2024 973.6 145.3 1,118.9 6.0 1,124.9
* The change in fair value of investment property during the year for the
Group was £15.4 million. Of this, a fair value gain of £17.6 million has
been recorded in Investment Property, and a £2.2 million loss has been
recorded in held for sale assets.
Group
Year ended 31 December 2023 Investment Investment Total operational assets Property under development Total
property property £m £m investment
freehold long leasehold property
£m £m £m
As at 1 January 2023 920.4 142.0 1,062.4 3.3 1,065.7
Capital expenditure 29.7 2.8 32.5 - 32.5
Sale of investment property (12.0) (18.2) (30.2) - (30.2)
Transfer to held for sale asset (22.4) - (22.4) - (22.4)
Change in fair value during the year 24.3 6.1 30.4 (0.3) 30.1
As at 31 December 2023 940.0 132.7 1,072.7 3.0 1,075.7
All rental income as well as all direct operating expenses, including repairs
and maintenance, recorded in the Statement of Comprehensive Income were
derived from those assets held under Investment Property and Held For Sale
Assets. No direct operating expenses, including repairs and maintenance, arose
from Investment Property or Held For Sale Assets that did not generate rental
income.
£374.3 million (nominal value) of the Group's borrowings are secured by fixed
charges over certain investment properties held by subsidiaries, with a market
value of £1,021.7 million (31 December 2023: £1,074.9 million), and by
floating charges over the assets of certain subsidiaries. There are currently
no restrictions on the remittance of income from investment properties.
In accordance with IAS 40, the carrying value of investment property is their
fair value as determined by independent external valuers. This valuation has
been conducted by CBRE Limited, as external valuer, and has been prepared as
at 31 December 2024, in accordance with the Appraisal & Valuation
Standards of the RICS, on the basis of market value. Properties have been
valued on an individual basis. This value has been incorporated into the
financial statements.
The valuation of all property assets uses market evidence and includes
assumptions regarding income expectations and yields that investors would
expect to achieve on those assets over time. Many external economic and market
factors, such as interest rate expectations, bond yields, the availability and
cost of finance and the relative attraction of property against other asset
classes, could lead to a reappraisal of the assumptions used to arrive at
current valuations. In adverse conditions, this reappraisal can lead to a
reduction in property values and a loss in Net Asset Value.
The valuers of the Group's property portfolio have made enquiries to ascertain
sustainability factors which are likely to impact value and reflect their
understanding of how market participants include sustainability factors in
their pricing decisions in arriving at their opinion of market value. The
valuer considers the following sustainability considerations to have the
greatest potential to impact value:
• Energy performance;
• Green certification;
• Sources of fuel and renewable energy sources; and
• Physical risk/Climate related risk
The table below reconciles between the fair value of the investment property
per the Consolidated Statement of Financial Position and investment property
per the independent valuation performed in respect of each year end.
Group
As at As at
31 December 31 December
2024 2023
£m £m
Value per independent valuation report 1,135.0 1,097.9
Add: Head lease 0.6 0.2
Deduct: Assets classified as held for sale (10.7) (22.4)
Fair value per Consolidated Statement of Financial Position 1,124.9 1,075.7
Fair Value Hierarchy
The following table provides the fair value measurement hierarchy for
investment property:
Date of valuation 31 December 2024 Total Quoted Significant Significant
£m prices observable unobservable
inputs inputs inputs
markets (Level 2) (Level 3)
(Level 1) £m £m
£m
Assets measured at fair value:
Student property 1,118.5 - - 1,118.5
Commercial property 16.5 - - 16.5
As at 31 December 2024 1,135.0 1,135.0
Date of valuation 31 December 2023 Total Quoted prices Significant Significant
£m in active observable unobservable
markets inputs inputs
(Level 1) (Level 2) (Level 3)
£m £m £m
Assets measured at fair value:
Student property 1,082.1 - - 1,082.1
Commercial property 15.8 - - 15.8
As at 31 December 2023 1,097.9 - - 1,097.9
There have been no transfers between Level 1 and Level 2 during the year, nor
have there been any transfers between Level 2 and Level 3 during the year.
The valuations have been prepared on the basis of market value which is
defined in the RICS Valuation Standards, as:
"The estimated amount for which a property should exchange on the date of
valuation between a willing buyer and a willing seller in an arm's-length
transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion."
Market value as defined in the RICS Valuation Standards is the equivalent of
fair value under IFRS.
The following descriptions and definitions relate to valuation techniques and
key unobservable inputs made in determining fair values. The valuation
technique for student property uses a discounted cash flow with the following
inputs:
(a) Unobservable input: Rental income
The rent at which space could be let in the market conditions prevailing at
the date of valuation. Range £116 per week-£549 per week with a weighted
average weekly rent of £235 (31 December 2023: £96-£493 per week, weighted
average £184).
(b) Unobservable input: Rental growth
The estimated average increase in rent based on both market estimations and
contractual arrangements. Assumed rental growth of 3.5% used in valuations (31
December 2023: growth of 6.2%).
(c) Unobservable input: Net initial yield
The net initial yield is defined as the initial net income as a percentage of
the market value (or purchase price as appropriate) plus standard costs of
purchase.
Range: 4.8%-8.9%, with a weighted average of 5.5% (31 December 2023:
4.5%-8.9%, weighted average 5.5%).
(d) Unobservable input: Physical condition of the property
The Group indicated that it would spend £46.0 million on health and safety
works over a five year period through to 2026. CBREs assumption at 31 December
2024 is that £29.5 million for EWS and £1.5 million for internal fire
safety works reflected as a deduction within the valuation (31 December
2023: £33.0 million). This deduction is in respect of work on external wall
systems and fire stopping on buildings over 11 meters.
(e) Sensitivities of measurement of significant unobservable inputs
The Group's portfolio valuation is subject to judgement and is inherently
subjective by nature. As a result, the following sensitivity analysis has been
prepared by the valuer. For the purposes of the sensitivity analysis, the
Group considers its property portfolio to be one homogeneous group of
properties.
As at 31 December 2024 15% increase -3% change +3% change -0.25% +0.25%
in cost of EWS in rental in rental change change
works (£m) income (£m) income (£m) in yield (£m) in yield (£m)
(Decrease)/increase in the fair value of investment property (4.4) (45.8) 45.6 57.2 (52.1)
As at 31 December 2023 15% increase -3% change +3% change -0.25% +0.25%
in cost of EWS in rental in rental change change
works (£m) income (£m) income (£m in yield (£m) in yield (£m)
(Decrease)/increase in the fair value of investment property (4.9) (45.1) 45.0 55.5 (50.5)
(f) Commercial properties
The key assumptions for the commercial properties are net initial yield,
current rent and rental growth. A 3% movement in commercial rental income
would not materially impact the commercial property valuation of £16.5
million at the year end (2023: £15.8 million).
12. INTANGIBLE ASSETS
Group and Company
Year ended 31 December 2024 External software development
£m
Costs
As at 1 January 2024 4.6
Additions 2.7
As at 31 December 2024 7.3
Amortisation
As at 1 January 2024 (1.5)
Charge for the year (0.3)
As at 31 December 2024 (1.8)
Net book value
As at 31 December 2024 5.5
Group and Company
Year ended 31 December 2023 External software development
£m
Costs
As at 1 January 2023 3.0
Additions 1.6
As at 31 December 2023 4.6
Amortisation
As at 1 January 2023 (1.1)
Charge for the year (0.4)
As at 31 December 2023 (1.5)
Net book value
As at 31 December 2023 3.1
13. PROPERTY, PLANT AND EQUIPMENT
Group Company
Year ended 31 December 2024 Fixtures and Computer Total Fixtures and Computer equipment Total
fittings equipment £m fittings £m £m
£m £m £m
Costs
As at 1 January 2024 1.8 0.6 2.4 1.7 0.3 2.0
Additions - 0.1 0.1 - 0.1 0.1
As at 31 December 2024 1.8 0.7 2.5 1.7 0.4 2.1
Depreciation
As at 1 January 2024 (1.1) (0.5) (1.6) (1.0) (0.3) (1.3)
Charge for the year - (0.1) (0.1) - - -
As at 31 December 2024 (1.1) (0.6) (1.7) (1.0) (0.3) (1.3)
Net book value
As at 31 December 2024 0.7 0.1 0.8 0.7 0.1 0.8
Group Company
Year ended 31 December 2023 Fixtures and Computer Total Fixtures and Computer equipment Total
fittings equipment £m fittings £m £m
£m £m £m
Costs
As at 1 January 2023 1.7 0.6 2.3 1.7 0.3 2.0
Additions 0.1 - 0.1 - - -
As at 31 December 2023 1.8 0.6 2.4 1.7 0.3 2.0
Depreciation
As at 1 January 2023 (0.8) (0.4) (1.2) (0.8) (0.2) (1.0)
Charge for the year (0.3) (0.1) (0.4) (0.2) (0.1) (0.3)
As at 31 December 2023 (1.1) (0.5) (1.6) (1.0) (0.3) (1.3)
Net book value
As at 31 December 2023 0.7 0.1 0.8 0.7 - 0.7
14. TRADE AND OTHER RECEIVABLES
Group Company
31 December 31 December 31 December 31 December
2024 2023 2024 2023
£m £m £m £m
Trade receivables 2.9 1.4 - -
Other receivables 1.7 1.6 0.2 0.3
Prepayments 3.2 3.3 0.5 0.4
VAT recoverable 0.1 0.2 - -
7.9 6.5 0.7 0.7
Amounts due from Group undertakings - - 819.3 391.4
7.9 6.5 820.0 392.1
In the Company, amounts owed from Group undertakings are classified as due
within one year due to their legal agreements with the debtor, however, such
amounts might be recovered after more than one year should the debtors'
circumstance not permit repayment on demand.
The Group's trade receivables of £3.7 million at 31 December 2024 (2023:
£1.4 million) is shown net of the provision for impairment of trade
receivables of £1.9 million (2023: £2.1 million)
Movements on the Group provision for impairment of trade receivables were as
follows:
Group
31 December 31 December
2024 2023
£m £m
At 1 January 2.1 1.9
Increase/(decrease) in provision for receivables impairment (0.2) 0.2
At 31 December 1.9 2.1
The provision for impairment of trade receivables is assessed at each
reporting period. Where trade receivables have arisen in the year ended 31
December 2024, a provision for impairment is considered by applying the
historic rate at which trade receivables have been deemed to be irrecoverable,
and applying this to the revenue of that year. Where trade receivables have
arisen in a prior year, a provision for impairment equal to the value of those
trade receivables is recognised.
Provisions for impaired receivables have been included in property expenses in
the income statement. Amounts charged to the impairment provision are
generally written off when there is no expectation of recovery.
The maximum exposure to credit risk at the reporting date is the book value of
each class of receivable mentioned above and its cash and cash equivalents.
The Group does not hold any collateral as security, though in some instances
students provide guarantors.
Management believes that the concentration of credit risk with respect to
trade receivables is limited due to the Group's customer base being broad and
independent of each other, and because they are residing in the Group's
accommodation. As such we have regular communication with them.
At 31 December 2024, there were no material trade receivables overdue at the
year end which have not been fully provided for, and no aged analysis of trade
receivables has been included. The carrying value of trade and other
receivables classified at amortised cost approximates fair value. The Company
performed a review of the expected credit loss on the amounts due from Group
undertakings; there was no provision made during the year (2023: £nil). There
are no security obligations related to these amounts due from Group
undertakings.
15. HELD FOR SALE ASSETS
Group
31 December 31 December
2024 2023
£m £m
At 1 January 22.4 13.7
Capital expenditure 0.4 0.4
Sale of investment property (12.6) (14.1)
Transfer to held for sale assets 2.7 22.4
Change in fair value during year* (2.2) -
At 31 December 10.7 22.4
* The change in fair value of investment property during the year for the
Group was £15.4 million. Of this, a fair value gain of £17.6 million has
been recorded in Investment Property, and a £2.2 million loss has been
recorded in held for sale assets.
Management considers that two properties (2023: three properties) meet the
conditions relating to assets held for sale under IFRS 5: Non-current Assets
Held for Sale. The combined fair value in these financial statements is £10.7
million (2023: £22.4 million). One of the three assets, with book value of
£2.7 million, completed on its disposal on 29 January 2025 for consideration
of £2.8 million. The remaining two assets are being actively marketed,
management expects the sales to be completed in 2025.
All assets held for sale fall within 'Level 3' as defined by IFRS. There have
been no transfers within the fair value hierarchy during the year.
16. CASH AND CASH EQUIVALENTS
Group Company
31 December 31 December 31 December 31 December
2024 2023 2024 2023
£m £m £m £m
Unrestricted cash and cash equivalents 36.0 11.0 24.7 2.4
Restricted cash and cash equivalents (1) 39.4 29.5 - -
Cash and cash equivalents 75.4 40.5 24.7 2.4
(1)Restricted cash relates to certain bank accounts held by the Group where
funds are not immediately available at 31 December but may be utilised to
settle contractual obligations.
17. TRADE AND OTHER PAYABLES
Group Company
31 December 31 December 31 December 31 December
2024 2023 2024 2023
£m £m £m £m
Trade payables 0.8 1.3 0.1 0.3
Other payables 4.1 4.2 0.4 0.2
Accruals 14.3 17.9 1.6 2.9
19.2 23.4 2.1 3.4
Amounts owed to Group undertakings - - 454.8 111.0
19.2 23.4 456.9 114.4
The Directors consider that the carrying value of trade and other payables
approximates to their fair value.
Amounts owed to Group undertakings are interest free and repayable on demand.
At 31 December 2024, there was deferred rental income of £34.8 million (2023:
£34.9 million) which was rental income that had been charged that relates to
future periods.
18. BANK BORROWINGS
A summary of the drawn and undrawn bank borrowings in the year is shown below:
Group
Bank Bank Total Bank Bank Total
borrowings borrowings 31 December borrowings borrowings 31 December
drawn undrawn 2024 drawn undrawn 2023
31 December 31 December £m 31 December 31 December £m
2024 2024 2023 2023
£m £m £m £m
At 1 January 360.3 42.0 402.3 391.2 20.0 411.2
Bank borrowings repaid (150.9) - (150.9) (30.9) 24.6 (6.3)
Part cancellation of revolving credit facility - (2.0) (2.0) - (22.6) (22.6)
Unsecured facility refinanced - - - - 20.0 20.0
Bank borrowings drawn in the year 40.0 (40.0) - - - -
New facility drawn 124.9 - 124.9 - - -
At 31 December 374.3 - 374.3 360.3 42.0 402.3
At year end the Group had no undrawn borrowings (2023: two facilities with
undrawn borrowings totalling £42 million). The weighted average term to
maturity of the Group's debt as at the year end is 4.7 years (2023: 3.9
years).
Bank borrowings are secured by charges over individual investment properties
held by certain asset-holding subsidiaries. These assets have a fair value of
£1,021.7 million at 31 December 2024 (2023: £1,074.9 million). In some
cases, the lenders also hold charges over the shares of the subsidiaries and
the intermediary holding companies of those subsidiaries.
In March 2024, four small near term debt facilities were refinanced into one
consolidated seven year £124.9 million facility. As the refinancing
represented a substantial modification of terms, the near term facilities were
derecognised, with accelerated unamortised arrangement fees of £0.9 being
charged to finance costs upon derecognition. The new £124.9 million facility
is held at floating rate, subject to an interest rate cap with arrangement
fees amortising on a straight line basis over the term of the facility.
Any associated fees in arranging the bank borrowings unamortised as at the
year end are offset against amounts drawn on the facilities as shown in the
table below:
Group
Non-current 31 December 31 December
2024 2023
£m £m
Balance brought forward 302.6 391.2
Total bank borrowings drawn in the year 164.9 -
Bank borrowings becoming non-current in the year - -
Less: Bank borrowings becoming current in the year - (57.7)
Less: Bank borrowings repaid during the year (93.2) (30.9)
Bank borrowings drawn: due in more than one year 374.3 302.6
Less: Unamortised costs (3.9) (2.4)
Bank borrowings due in more than one year 370.4 300.2
Group
Current 31 December 31 December
2024 2023
£m £m
Balance brought forward 57.7 -
Total bank borrowings in the year - -
Less: Bank borrowings repaid and cancelled in the year (57.7) -
Bank borrowings becoming current in the year - 57.7
Bank borrowings drawn: due in less than one year - 57.7
Less: Unamortised costs - (1.2)
Bank borrowings due in less than one year - 56.5
Maturity of Bank Borrowings
Group
31 December 31 December
2024 2023
£m £m
Repayable in less than one year - 57.7
Repayable between one and two years - 45.4
Repayable between two and five years 206.1 206.1
Repayable in over five years 168.2 51.1
Bank borrowings 374.3 360.3
All of the Group's facilities have an interest charge payable quarterly. One
of the facilities has an interest charge that is based on a margin above
SONIA, however with an interest rate cap in place it has an effective fixed
rate of 6.8%. Other facilities interest charges are fixed at 4.0%, 3.5%, 3.2%
and 3.6%. The weighted average rate payable by the Group on its debt portfolio
as at the year end was 4.5% (2023: 4.3%).
The Group monitors its covenant position and headroom on a regular basis. At
31 December 2024, the Group was in full compliance with all of its borrowing
covenants, which are tested quarterly on 31 March. 30 June, 30 September and
31 December, annually. Interest coverage ratio covenants, across both historic
and prospective, range from 150% to 225%. Loan to value covenants range from
a minimum of 50% to a minimum 75%. Attention is also drawn to note 1.4 for
conclusions reached in respect of Going Concern.
Fair value of fixed rate borrowings
The Group considers that all bank loans fall within 'Level 3' as defined by
IFRS 13 'Fair value measurement'. The nominal value of floating rate
borrowings is considered to be a reasonable approximation of fair value.
However, the fair value of fixed rate borrowings at the reporting date has
been calculated by discounting cash flows under the relevant agreements at
indicative interest rates for similar debt instruments using indicative rates
provided by lenders or advisers, which are considered unobservable.
Group
31 December 31 December
2024 2023
£m £m (1)
Nominal value of fixed rate borrowings 257.2 270.9
Fair value adjustment (20.7) (20.9)
Fair value of fixed rate borrowings 236.5 250.0
(1 ) Restated to reflect full application of the equity method.
The Group has bank loans with a total carrying value of £374.3 million,
including the nominal value of fixed rate borrowings of £257.2 million. The
fair value equivalent at the reporting date of the fixed rate debt was £236.5
million (2023 restated: £250.0 million). The discount rate was arrived at
after considering the weighted average cost of capital, an unlevered property
discount rate, the market rate and the loan to value.
An increase in the discount rate by twenty basis points would result in a
decrease of the fair value of the fixed rate borrowings by £2.0 million (2023
restated: £2.0 million). A decrease in the discount rate by twenty basis
points would result in an increase of the fair value of the fixed rate
borrowings by £2.0 million (2023 restated: £2.0 million).
19. SHARE CAPITAL
Group and Company Group and Company
31 December 31 December 31 December 31 December
2024 2024 2023 2023
Number £m Number £m
Balance brought forward 603,437,683 6.0 603,351,880 6.0
Capital raise 60,350,664 0.6 - -
Exercise of share options 208,497 - 85,803 -
Balance carried forward 663,996,844 6.6 603,437,683 6.0
On 17 October 2024 60,350,664 shares were issued at an average price of 93.0
pence per share raising gross proceeds of £56.1 million.
During the year 208,497 shares were issued to satisfy the exercise of options
under the Long Term Incentive Plan and the Sharesave scheme offered to
employees of the Group (2023: 85,803 shares).
20. SHARE PREMIUM
The share premium relates to amounts subscribed for share capital in excess of
nominal value:
Group and Company
31 December 31 December
2024 2023
£m £m
Balance brought forward 0.3 0.3
Share premium relating to shares issued during the year 53.8 -
Balance carried forward 54.1 0.3
21. CAPITAL REDUCTION RESERVE
Group and Company
31 December 31 December
2024 2023
£m £m
Balance brought forward 424.1 444.7
Reserves transfer - 0.1
Less interim dividends declared and paid per Note 10 (22.0) (20.7)
Balance carried forward 402.1 424.1
The capital reduction reserve account is a distributable reserve.
22. LEASING AGREEMENTS
Future total minimum lease receivables under non-cancellable operating leases
on investment properties are as follows:
Group
31 December 31 December
2024 2023
£m £m
Less than one year 22.0 20.1
Between one and two years 1.2 1.2
Between two and three years 1.0 1.1
Between three and four years 0.8 0.9
Between four and five years 0.8 0.7
More than five years 7.1 5.9
Total 32.9 29.9
The above relates to assured shorthold tenancies (ASTs) and commercial leases
in place as at, and had commenced by, 31 December 2024.
23. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 December 2024 (31 December 2023:
£nil).
24. CAPITAL COMMITMENTS
The Group was contractually committed to expenditure of £2.8 million at 31
December 2024 (31 December 2023: £1.7 million) for the future development and
enhancement of investment property.
25. RELATED PARTY DISCLOSURES
Key Management Personnel
Key management personnel are considered to comprise the Board of Directors.
Please refer to Note 6 for details of the remuneration for the key management.
Share Capital
The below sets out the share capital transactions during the year with related
parties:
Date Related party Nature of related party Nature of transaction Number of shares
17-Oct-24 Mark Pain Chair of the Board Capital Raise Share Purchase 20,000
17-Oct-24 Duncan Garrood Chief Executive Officer Capital Raise Share Purchase 32,000
17-Oct-24 Donald Grant Chief Financial and Sustainability Officer Capital Raise Share Purchase 20,876
17-Oct-24 Alice Avis Senior Independent Non-Executive Director Capital Raise Share Purchase 6,000
14-Nov-24 Duncan Garrood Chief Executive Officer Sharesave Plan Share Purchase 25,316
The shares issued to Duncan Garrood as part of the Sharesave Plan derived a
gain of £4,532 when exercised.
Dividends
The below sets out the dividends transactions during the year with related
parties:
Date Related party Nature of related party Nature of transaction Dividends
Paid quarterly Mark Pain Chair of the Board Dividends received on shareholding £3,738
Paid quarterly Duncan Garrood Chief Executive Officer Dividends received on shareholding £3,819
Paid quarterly Donald Grant Chief Financial and Sustainability Officer Dividends received on shareholding £1,365
Paid quarterly Alice Avis Senior Independent Non-Executive Director Dividends received on shareholding £1,962
During the year £85,361 was paid to AXA PPP Healthcare Limited, a subsidiary
of AXA Insurance UK PLC, in relation to the employee healthcare plan. Mark
Pain, Chair of the Board, is Chair of the Board of AXA Insurance UK PLC. Of
this amount, £24,866 was included in trade and other payables at year end.
Share-based Payments
The below sets out the awards to related parties during the year under the
Empiric Student Property plc Long Term Incentive Plan and the Deferred Bonus
Scheme:
Date Related party Nature of related party Nature of transaction Number of shares
12-Apr-24 Duncan Garrood Chief Executive Officer LTIP Nil-cost Option Grant over Ordinary Shares 728,294
12-Apr-24 Duncan Garrood Chief Executive Officer Deferred Bonus Plan Option Grant over Ordinary Shares 136,476
12-Apr-24 Donald Grant Chief Financial and Sustainability Officer LTIP Nil-cost Option Grant over Ordinary Shares 515,135
12-Apr-24 Donald Grant Chief Financial and Sustainability Officer Deferred Bonus Plan Option Grant over Ordinary Shares 96,532
26. SUBSEQUENT EVENTS
On 28 January 2025 the Group commenced a collective consultation on proposals
aimed at implementing certain organisational changes. The proposal is expected
to complete by 31 March 2025 and dependant on the conclusions reached, could
result in up to £0.6 million of related restructuring costs being incurred.
On 29 January 2025, the Group completed on the disposal of Radway House, Bath
for consideration of £2.8 million.
27. SHARE-BASED PAYMENTS
The Company operates two equity-settled share-based remuneration schemes for
Executive Directors (deferred annual bonus and LTIP schemes) and certain
members of the Senior Leadership Team ("SLT") who participate in the LTIP
scheme. The details of the schemes are included in the Remuneration Committee
Report. The Group also operates a Save As You Earn (SAYE) scheme for
employees.
On 12 April 2024, the Company granted nil-cost options over a total of
1,243,429 (Duncan Garrood 728,294 and Donald Grant 515,135) ordinary shares
pursuant to the Empiric Student Property plc Long Term Incentive Plan for the
2024 financial year.
During the year, the Company granted nil-cost options over a total of 772,967
ordinary shares to members of the Senior Leadership Team pursuant to the
Empiric Student Property plc Long Term Incentive Plan for the 2024 financial
year.
During the year, the Company granted options over a total of 201,922 ordinary
shares in relation to the Save As You Earn scheme at an exercise price of
£0.77. The earliest date on which the options will become exercisable is 1
July 2027.
Of the nil-cost options, 72,396 were exercisable at 31 December 2024. The
weighted average remaining contractual life of these options was 0.2 years
(2023: 1.2 years).
During the year to 31 December 2024 the amount recognised in the Statement of
Comprehensive Income relating to option plans was £0.3 million (2023: £0.7
million).
The awards have the benefit of dividend equivalence. The Remuneration
Committee will determine on or before vesting whether the dividend equivalent
will be provided in the form of cash and/or shares.
31/12/2024 31/12/2023 31/12/2022 31/12/2021 31/12/2020 31/12/2019
Outstanding number brought forward 4,866,099 3,756,874 3,446,320 2,314,539 1,250,045 1,051,708
Granted during the period 2,451,326 1,886,191 2,430,279 1,725,577 1,064,494 604,134
Vested and exercised during the period (182,563) (80,116) (127,492) (35,779) - (129,253)
Lapsed during the period (1,523,881) (696,850) (1,992,233) (558,017) - (276,544)
Outstanding number carried forward 5,610,981 4,866,099 3,756,874 3,446,320 2,314,539 1,250,045
The fair value on date of grant for the nil-cost options under the LTIP Awards
and Annual Bonus Awards were priced using the Monte Carlo pricing model. The
weighted average share price for the options exercised in the period was 90.9
pence per share. For those share options outstanding at year end, the exercise
prices ranged from 75.5 pence per share to 78.9 pence per share, and the
weighted average of the remaining contractual life of those shares is 1.6
years.
The following information is relevant in the determination of the fair value
of the options granted in the year, for those related to market based vesting
conditions:
Deferred bonus shares LTIPs (market based conditions) LTIPs (Total Return conditions) SAYE Award
(a) Share price at grant date £0.91 £0.91 £0.91 £0.92
(b) Exercise price £nil £nil £nil £0.77
(c) Vesting period 3 years 3 years 3 years 3 years
(d) Expected volatility N/A 23.5% N/A 24.1%
(e) Risk-free rate N/A 4.3% N/A 4.2%
The volatility assumption is based on a statistical analysis of daily share
prices of comparator companies over the last three years.
The TSR performance conditions have been considered when assessing the fair
value of the options.
28. FINANCIAL RISK MANAGEMENT
Financial Instruments
The Group's principal financial assets and liabilities are those which arise
directly from its operations: trade and other receivables, trade and other
payables; and cash and cash equivalents. Set out below is a comparison by
class of the carrying amounts and fair value of the Group's financial
instruments that are shown in the financial statements:
Reconciliation of liabilities to cash flows from financing activities
31 December 31 December
2024 2023
£m £m
Bank borrowings and leasehold liability at start of the year 357.8 387.8
Cash flows from financing activities
Bank borrowings drawn 164.9 -
Bank borrowings repaid (150.8) (30.9)
Lease liability paid (0.2) (0.2)
Loan arrangement fees paid (2.2) (0.1)
Non-cash movements
Amortisation of loan arrangement fees 1.7 1.2
Amortisation of lease liability interest 0.1 -
Bank borrowings and leasehold liability at end of the year 371.3 357.8
Risk Management
The Company and Group is exposed to market risk (including interest rate
risk), credit risk and liquidity risk.
The Board of Directors oversees the management of these risks.
The Board of Directors reviews and agrees policies for managing each of these
risks which are summarised below.
(a) Market Risk
Market risk is the risk that the fair values of financial instruments will
fluctuate because of changes in market prices. The financial instruments held
by the Company and Group that are affected by market risk are principally the
Company and Group bank balances.
(b) Credit Risk
Credit risk is the risk of financial loss to the Company and Group if a
customer or counterparty to a financial instrument fails to meet its
contractual obligations. The Company and Group is exposed to credit risks from
both its leasing activities and financing activities, including deposits with
banks and financial institutions.
The Group has established a credit policy under which each new tenant is
assessed based on an extensive credit rating scorecard at the time of entering
into a lease agreement.
The Group's review includes external rating, when available, and in some cases
bank references.
The Group determines concentrations of credit risk by monthly monitoring the
creditworthiness rating of existing customers and through a monthly review of
the trade receivables' ageing analysis.
Credit risk also arises from cash and cash equivalents and deposits with banks
and financial institutions. For banks and financial institutions, only
independently rated parties with minimum rating "B" are accepted.
Further disclosures regarding trade and other receivables, which are neither
past due nor impaired, are provided in Note 14.
(i) Tenant Receivables
Tenant receivables, primarily tenant rentals, are presented in the
Consolidated Statement of Financial Position net of allowances for doubtful
receivables and are monitored on a case-by-case basis. Credit risk is
primarily managed by requiring tenants to pay rentals in advance and
performing tests around strength of covenant prior to acquisition.
(ii) Credit Risk Related to Financial Instruments and Cash Deposits
One of the principal credit risks of the Company and Group arises with the
banks and financial institutions. The Board of Directors believes that the
credit risk on short-term deposits and current account cash balances are
limited because the counterparties are banks, which are committed lenders to
the Company and Group, with high credit ratings assigned by international
credit rating agencies.
Credit ratings (Moody's) Long-term Outlook
Canada Life Aa3 Stable
Mass Mutual Aa3 Stable
Scottish Widows A2 Positive
Aareal Bank AG Baa1 Stable
(c) Liquidity Risk
Liquidity risk arises from the Company and Group management of working
capital, and going forward, the finance charges and principal repayments on
any borrowings, of which currently there are none. It is the risk that the
Company and Group will encounter difficulty in meeting their financial
obligations as they fall due as the majority of the Company and Group assets
are property investments and are therefore not readily realisable. The Company
and Group objective is to ensure they have sufficient available funds for
their operations and to fund their capital expenditure. This is achieved by
continuous monitoring of forecast and actual cash flows by management.
The monitoring of liquidity is also assisted by the quarterly review of
covenants which are ordinarily imposed by lenders, such as loan to value and
interest cover ratios. The loan to value ratio is typically expressed as the
outstanding loan principal as a percentage of a lender approved valuation of
the underlying properties secured under the facility. Interest cover ratio's
reflect the quantum or finance costs (either historic or forecast) as a
multiple of recurring earnings, normally a measure of gross profit. As part of
the Group's viability modelling, certain scenarios are considered to model the
impact on liquidity. All of the Group's covenants are currently compliant and
it is envisaged that compliance will continue to be achieved in a reasonably
severe downside scenario. The Group's portfolio could currently withstand a 16
per cent decline in property valuations before a breach in loan to value
covenants are triggered. The Group's average interest cover ratio across all
facilities is 1.9 times, whereas gross profit is currently in excess of 3.0
times total finance costs, providing a good degree of comfort.
Bank borrowings would be renegotiated in advance of any potential covenant
breaches, insofar as factors are within the control of the Group. Facility
agreements typically contain cure provisions providing for prepayment, cash
deposits or security enhancement as maybe required to mitigate any potential
breach. The Group's borrowings are spread across a range of lenders and
maturities so as to minimise any potential concentration of risk.
The following table sets out the contractual obligations (representing
undiscounted contractual cash flows) of financial liabilities:
Group
On demand Less than 3 3 to 12 1 to 5 Greater than 5 years Total
£m months months years £m £m
£m £m £m
At 31 December 2024
Bank borrowings and interest - 4.1 12.6 263.3 179.1 459.1
Trade and other payables - 19.2 - - - 19.2
- 23.3 12.6 263.3 179.1 478.3
Group
On demand Less than 3 3 to 12 1 to 5 Greater than 5 years Total
£m months months years £m £m
£m £m £m
At 31 December 2023
Bank borrowings and interest - 17.6 54.8 286.3 54.6 413.3
Trade and other payables - 23.4 - - - 23.4
- 41.0 54.8 286.3 54.6 436.7
29. CAPITAL MANAGEMENT
The primary objectives of the Group's capital management are to ensure that it
remains a going concern and continues to qualify for UK REIT status.
The Board of Directors monitors and reviews the Group's capital so as to
promote the long-term success of the business, facilitate expansion and to
maintain sustainable returns for shareholders.
Capital consists of ordinary shares, other capital reserves and retained
earnings.
30. INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries are accounted for at cost less any accumulated
impairment losses in the Company's Statement of Financial Position. The
carrying amounts of these investments are reviewed for impairment whenever
events or changes in circumstances indicate that their carrying amount may not
be recoverable, with any impairment being recognised in the statement of
comprehensive income. During the year, the Company assessed the carrying value
of its investments in subsidiaries and concluded that no impairment was
required.
Those entities listed below are considered subsidiaries of the Company at 31
December 2024, with the shares issued being ordinary shares. All subsidiaries
are registered at the following address: 1st Floor Hop Yard Studios, 72
Borough High Street, London, SE1 1XF.
In each case the country of incorporation is England and Wales.
Company
31 December 31 December
2024 2023
£m £m
As at 1 January 222.6 222.6
Additions in the year - -
Disposals - -
Balance at 31 December 222.6 222.6
During 2024, there were a number of subsidiaries which moved within the Group,
due to reorganisations relating to debt refinancing.
Company Status Ownership Principal activity
Brunswick Contracting Limited Active** 100% Property Contracting
Empiric (Alwyn Court) Limited Active** 100% Property Investment
Empiric (Baptists Chapel) Limited Active** 100% Property Investment
Empiric (Bath Canalside) Limited Active** 100% Property Investment
Empiric (Bath James House) Limited Active** 100% Property Investment
Empiric (Bath JSW) Limited Active** 100% Property Investment
Empiric (Bath Oolite Road) Limited Active** 100% Property Investment
Empiric (Bath Piccadilly Place) Limited Active** 100% Property Investment
Empiric (Birmingham Emporium) Limited Active** 100% Property Investment
Empiric (Birmingham) Limited Active** 100% Property Investment
Empiric (Bristol CH) Limited Active** 100% Property Investment
Empiric (Bristol St Mary's) Leasing Limited Active** 100% Property Leasing
Empiric (Bristol St Mary's) Limited Active** 100% Property Investment
Empiric (Bristol) Limited Active** 100% Property Investment
Empiric (Buccleuch Street) Limited Active** 100% Property Investment
Empiric (Canterbury Franciscans) Limited Active** 100% Property Investment
Empiric (Canterbury Pavilion Court) Limited Active** 100% Property Investment
Empiric (Cardiff Wndsr House) Leasing Limited Dormant 100% Property Leasing
Empiric (Cardiff Wndsr House) Limited Active** 100% Property Investment
Empiric (Centro Court) Limited Active** 100% Property Investment
Empiric (Claremont Newcastle) Limited Active** 100% Property Investment
Empiric (College Green) Limited Active** 100% Property Investment
Empiric (Developments) Limited Dormant* 100% Development Management
Empiric (Edge Apartments) Limited Active** 100% Property Investment
Empiric (Edinburgh KSR) Leasing Limited Active** 100% Property Leasing
Empiric (Edinburgh KSR) Limited Active** 100% Property Investment
Empiric (Edinburgh South Bridge) Limited Active** 100% Property Investment
Empiric (Exeter Bishop Blackall School) Limited Active** 100% Property Investment
Empiric (Exeter Bonhay Road) Limited Active** 100% Property Investment
Empiric (Exeter City Service) Limited Dormant* 100% Property Investment
Empiric (Exeter DCL) Limited Active** 100% Property Investment
Empiric (Exeter LL) Limited Active** 100% Property Investment
Empiric (Falmouth Maritime Studios) Limited Active** 100% Property Investment
Empiric (Falmouth Ocean Bowl) Leasing Limited Active** 100% Property Leasing
Empiric (Falmouth Ocean Bowl) Limited Active** 100% Property Investment
Empiric (Glasgow Ballet School) Limited Active** 100% Property Investment
Empiric (Glasgow Bath St) Limited Active** 100% Property Investment
Empiric (Glasgow George St) Leasing Limited Active** 100% Property Leasing
Empiric (Glasgow George St) Limited Active** 100% Property Investment
Empiric (Glasgow) Leasing Limited Active** 100% Property Leasing
Empiric (Glasgow) Limited Active** 100% Property Investment
Empiric (Hatfield CP) Limited Active** 100% Property Investment
Empiric (Huddersfield Oldgate House) Limited Active** 100% Property Investment
Empiric (Huddersfield Snow Island) Leasing Limited Dormant* 100% Property Leasing
Empiric (Lancaster Penny Street 1) Limited Active** 100% Property Investment
Empiric (Lancaster Penny Street 2) Limited Active** 100% Property Investment
Empiric (Lancaster Penny Street 3) Limited Active** 100% Property Investment
Empiric (Leeds Algernon) Limited Active** 100% Property Investment
Empiric (Leeds Pennine House) Limited Active** 100% Property Investment
Empiric (Leeds St Marks) Limited Active** 100% Property Investment
Empiric (Leicester 134 New Walk) Limited Active** 100% Property Investment
Empiric (Leicester 136-138 New Walk) Limited Active** 100% Property Investment
Empiric (Leicester 140-142 New Walk) Limited Active** 100% Property Investment
Empiric (Leicester 160 Upper New Walk) Limited Active** 100% Property Investment
Empiric (Leicester Bede Park) Limited Active** 100% Property Investment
Empiric (Leicester De Montfort Square) Limited Active** 100% Property Investment
Empiric (Leicester Hosiery Factory) Limited Active** 100% Property Investment
Empiric (Leicester Peacock Lane) Limited Active** 100% Property Investment
Empiric (Leicester Shoe & Boot Factory) Limited Active** 100% Property Investment
Empiric (Liverpool Art School/Maple House) Limited Active** 100% Property Investment
Empiric (Liverpool Grove Street) Limited Active** 100% Property Investment
Empiric (Liverpool Hahnemann Building) Limited Active** 100% Property Investment
Empiric (Liverpool Octagon/Hayward) Limited Active** 100% Property Investment
Empiric (London Camberwell) Limited Active** 100% Property Investment
Empiric (London Road) Limited Active** 100% Property Investment
Empiric (Manchester Ladybarn) Limited Active** 100% Property Investment
Empiric (Manchester TH) Limited Active** 100% Property Investment
Empiric (Manchester Victoria Point) Limited Active** 100% Property Investment
Empiric (Newcastle Metrovick) Limited Active** 100% Property Investment
Empiric (Northgate House) Limited Active** 100% Property Investment
Empiric (Nottingham 95 Talbot) Limited Active** 100% Property Investment
Empiric (Nottingham Frontage) Limited Active** 100% Property Investment
Empiric (Oxford Stonemason) Limited Active** 100% Property Investment
Empiric (Picturehouse Apartments) Limited Active** 100% Property Investment
Empiric (Portobello House) Limited Active** 100% Property Investment
Empiric (Portsmouth Elm Grove Library) Limited Active** 100% Property Investment
Empiric (Portsmouth Europa House) Leasing Limited Active** 100% Property Leasing
Empiric (Portsmouth Europa House) Limited Active** 100% Property Investment
Empiric (Portsmouth Kingsway House) Limited Active** 100% Property Investment
Empiric (Portsmouth Registry) Limited Active** 100% Property Investment
Empiric (Provincial House) Leasing Limited Active** 100% Property Leasing
Empiric (Provincial House) Limited Active** 100% Property Investment
Empiric (Reading Saxon Court) Leasing Limited Active** 100% Property Leasing
Empiric (Reading Saxon Court) Limited Active** 100% Property Investment
Empiric (Snow Island) Limited Active** 100% Property Investment
Empiric (Southampton Emily Davies) Limited Active** 100% Property Investment
Empiric (Southampton) Leasing Limited Active** 100% Property Leasing
Empiric (Southampton) Limited Active** 100% Property Investment
Empiric (St Andrews Ayton House) Leasing Limited Active** 100% Property Leasing
Empiric (St Andrews Ayton House) Limited Active** 100% Property Investment
Empiric (St Peter Street) Limited Active** 100% Property Investment
Empiric (Stoke Caledonia Mill) Limited Active** 100% Property Investment
Empiric (Summit House) Limited Active** 100% Property Investment
Empiric (Talbot Studios) Limited Active** 100% Property Investment
Empiric (Trippet Lane) Limited Active** 100% Property Investment
Empiric (Twickenham Grosvenor Hall) Limited Active** 100% Property Investment
Empiric (York Foss Studios 1) Limited Active** 100% Property Investment
Empiric (York Lawrence Street) Limited Active** 100% Property Investment
Empiric (York Percy's Lane) Limited Active** 100% Property Investment
Empiric Acquisitions Limited Dormant* 100% Immediate Holding Company
Empiric Investment Holdings (Eight) Limited Active** 100% Holding Company
Empiric Investment Holdings (Five) Limited Active** 100% Holding Company
Empiric Investment Holdings (Four) Limited Active** 100% Holding Company
Empiric Investment Holdings (Seven) Limited Active** 100% Holding Company
Empiric Investment Holdings (Six) Limited Active** 100% Holding Company
Empiric Investment Holdings (Two) Limited Active** 100% Holding Company
Empiric Investments (Eight) Limited Active 100% Immediate Holding Company
Empiric Investments (Five) Limited Active 100% Immediate Holding Company
Empiric Investments (Four) Limited Active 100% Immediate Holding Company
Empiric Investments (One) Limited Dormant 100% Immediate Holding Company
Empiric Investments (Seven) Limited Active** 100% Immediate Holding Company
Empiric Investments (Six) Limited Active** 100% Immediate Holding Company
Empiric Investments (Three) Limited Active** 100% Immediate Holding Company
Empiric Investments (Two) Limited Active 100% Immediate Holding Company
Empiric Student Property Trustees Limited Dormant 100% Trustee
Hello Student Management Limited Active 100% Property Management
Brunswick Contracting Limited Active** 100% Property Contracting
Empiric (Alwyn Court) Limited Active** 100% Property Investment
Empiric (Baptists Chapel) Limited Active** 100% Property Investment
Empiric (Bath Canalside) Limited Active** 100% Property Investment
Empiric (Bath James House) Limited Active** 100% Property Investment
Empiric (Bath JSW) Limited Active** 100% Property Investment
Empiric (Bath Oolite Road) Limited Active** 100% Property Investment
Empiric (Bath Piccadilly Place) Limited Active** 100% Property Investment
Empiric (Birmingham Emporium) Limited Active** 100% Property Investment
Empiric (Birmingham) Limited Active** 100% Property Investment
* Company in liquidation since September 2024
** These companies are claiming an exemption from audit under sections 479A
of the Companies Act 2006
31. ALTERNATIVE PERFORMANCE MEASURES
The below sets out our alternative performance measures.
Gross margin - Gross profit expressed as a percentage of rental income. A
business KPI to monitor how efficiently we are running our buildings.
Group
Gross Margin 31 December 31 December
2024 2023
£m £m
Revenue 84.2 80.5
Property Expenses (25.6) (25.2)
Gross profit 58.6 55.3
Gross Margin calculated as Gross profit/Revenue 70% 69%
Total accounting return - The growth of EPRA NTA per share plus dividends per
share measured as a percentage. A key business indicator used to monitor the
level of overall return the Group is generating.
Group
Total accounting return 31 December 31 December
2024 2023
(Pence) (Pence)
EPRA NTA per share at start of year 120.7 115.4
EPRA NTA per share at end of year 119.6 120.7
EPRA NTA growth/(reduction) per share in the period (1.1) 5.3
Dividend per share paid in year 3.6 3.4
Dividends plus growth in EPRA NTA 2.5 8.7
Total accounting return calculated as Dividends plus EPRA NTA Growth in year 2.0% 7.6%
per share/ NTA at start of year
EPRA Loan to Value - a measure of gearing, calculated as gross borrowings
without deducting unamortised financing costs, less cash and adjusted for net
receivables or payables and intangibles, divided by gross portfolio valuation.
This was 27.2 per cent for the year (2023: 30.6 per cent).
Dividend cover - a measure of EPRA earnings relative to dividends declared for
the year. This was 114 per cent for the year (2023: 114 per cent).
Dividend pay-out ratio - a measure of dividends relative to EPRA earnings.
This was 88 per cent for the year (2023: 88 per cent).
Five Year Historical Record
31 December 31 December 31 December 31 December 31 December
2024 2023 2022 2021 2020
£m £m £m £m £m
Revenue 84.2 80.5 73.0 56.0 59.4
Direct costs (25.6) (25.2) (24.0) (23.1) (22.7)
Gross profit 58.6 55.3 49.0 32.9 36.7
Gross margin 69.6% 68.7% 67.1% 58.8% 61.8%
Administrative expenses (15.4) (14.0) (13.4) (10.6) (9.8)
Gain/(loss) on disposals (4.2) (0.6) 1.5 1.7 -
Property revaluation 15.4 30.1 45.6 17.6 (37.6)
Operating profit 54.4 70.8 82.7 41.6 (10.7)
Net finance costs (18.7) (17.2) (15.0) (12.4) (13.3)
Derivative fair value movement (1.3) (0.2) - - -
Net profit/(loss) 34.4 53.4 67.7 29.2 (24.0)
EPRA EPS (pence) 4.2 4.0 3.4 1.7 2.3
Portfolio valuation* 1,135.0 1,098.1 1,079.4 995.9 1,005.1
Borrowings (370.4) (356.7) (386.5) (371.0) (385.3)
Other net assets/(liabilities) 36.7 (7.2) 7.9 22.7 13.5
Net assets 801.3 734.2 700.8 647.6 633.3
EPRA NTA 800.8 734.1 700.8 647.6 633.3
EPRA NTA per share 119.6 120.7 115.4 106.8 104.6
Shares in issue 663,996,844 603,437,683 603,351,880 603,203,052 603,160,940
Weighted average cost of debt 4.5% 4.3% 4.0% 3.0% 2.9%
Weighted average debt maturity 4.7 years 3.9 years 4.8 years 4.9 years 5.9 years
Property LTV 29.1% 31.1% 33.1% 35.4%
EPRA LTV 27.2% 30.6% 32.7%
* Includes properties classified as held for sale and under development
Glossary
Alternative Performance Measures ("APM") - Performance measures to supplement
IFRS to provide users of the Annual Report with a better understanding of the
underlying performance of the Group's property portfolio.
Colleague Engagement - Calculated using the results of our biannual colleague
engagement surveys.
Company - Empiric Student Property plc.
Dividend Cover - EPRA earnings divided by dividends declared for the year.
Dividend pay-out ratio - Dividends declared relative to EPRA earnings.
EPRA - European Public Real Estate Association.
EPRA basic EPS - EPRA Earnings divided by the weighted average number of
ordinary shares outstanding during the period (refer to Note 8).
EPRA diluted EPS - EPRA Earnings divided by the weighted average number of
shares during the period, taking into account all potentially issuable shares.
EPRA Earnings - the IFRS profit after taxation excluding investment and
development property revaluations, gains/losses on investing property
disposals and changes in the fair value of financial instruments.
EPRA Loan to Value - a measure of gearing, calculated as gross borrowings
without deducting unamortised financing costs, less cash and adjusted for net
receivables or payables and intangibles, divided by gross portfolio valuation.
EPRA Net Disposal Value ("NDV") - Represents the shareholders' value under a
disposal scenario, The value of the company assuming assets are sold, and the
liabilities are settled and not held to maturity.
EPRA Net Reinvestment Value ("NRV") - The value of the assets on a long-term
basis, assets and liabilities are not expected to crystallise under normal
circumstances.
EPRA Net Tangible Assets ("NTA") - Assumes the underlying value of the company
assuming it buys and sells assets.
Gross margin - Gross profit expressed as a percentage of revenue.
Group - Empiric Student Property plc and its subsidiaries.
Hello Student - Our customer-facing brand and operating platform.
HMO - Houses in multiple occupation.
IFRS - International Financial Reporting Standards.
IFRS EPS - IFRS earnings divided by the weighted average number of ordinary
shares outstanding during the period.
Like for like rental growth - Compares the growth in rental income for
operational assets, throughout both the current and comparative year, and
excludes acquisitions, disposals and developments.
Like for like valuation (gross) - Compares the growth in capital values of the
Group's standing portfolio from the prior year end to the current year end,
excluding acquisitions and disposals.
Like for like valuation (net) - Compares the growth in capital values of the
Group's standing portfolio from the prior year end to the current year end,
excluding acquisitions, disposals, capital expenditure and development
properties.
Net Asset Value or NAV - Net Asset Value is the net assets in the Statement of
Financial Position.
PBSA - Purpose Built Student Accommodation.
Postgrad - Postgraduate students who have successfully completed an
undergraduate course and are undertaking further studies at a more advanced
level.
RCF - Revolving credit facility.
REIT - Real estate investment trust.
Revenue Occupancy - Calculated as the percentage of our Gross Annualised
Revenue we have achieved for an academic year.
RICS - Royal Institution of Chartered Surveyors.
SONIA - Sterling Over Night Index Average is the effective reference for
overnight indexed swaps for unsecured transactions in the Sterling market. The
SONIA itself is a risk-free rate.
Total accounting return - The growth in EPRA NTA over the period plus
dividends paid for the period expressed as a percentage of opening EPRA NTA.
Weighted average cost of debt - Debt weighted by value multiplied by the
interest rate.
Weighted average debt maturity - The weighted average term of our debt
facilities at the balance sheet date.
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