BUSINESS AND TRADING UPDATE

Empiric Student Property PLC

24 May 2023

 

Empiric Student Property plc

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

BUSINESS AND TRADING UPDATE

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

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

Highlights

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

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

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

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

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

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

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

Academic year 2023/24

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

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

Disposals

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

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

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

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

Debt & liquidity

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

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

Dividends

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

ENDS

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

Empiric Student Property plc (via FTI Consulting below) Duncan Garrood (Chief Executive Officer) Donald Grant (Chief Financial & Sustainability Officer) Jefferies International Limited 020 7029 8000 Tom Yeadon Andrew Morris Peel Hunt LLP 020 7418 8900 Capel Irwin Carl Gough FTI Consulting Dido Laurimore Eve Kirmatzis 020 3727 1000 [e-mail]

The Company's LEI is 213800FPF38IBPRFPU87.

Further information on Empiric can be found on the Company's website at www.empiric.co.uk.

Notes:

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

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

 

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