Results for Year Ended 31 December 2022

RNS Number : 1283T

Empiric Student Property PLC

16 March 2023

Empiric Student Property plc

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

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2022

Business transformation delivering operational and valuation outperformance

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 2022.

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

"2022 has been another year of razor-sharp focus on our strategic priorities, with significant progress made across all key metrics. The steps we have taken over the last five years to transform the operations of the business, improve our brand and focus on clusters of high quality accommodation are delivering tangible results, evidenced by the record revenue occupancy, significant growth in earnings and improved operating margin that the business achieved in the year."

"The business is now well positioned for growth and we continue to recycle the proceeds of non-core sales into our pipeline of developments and refurbishments. We operate in a resilient sector, and we continue to see high levels of demand for our product for the 2023/24 academic year which underpins our confidence in the outlook for the business and our commitment to our customer-first philosophy."

Financial highlights

	31 December 2021	31 December 2022	Change
Income statement
EPRA earnings (£m)	9.9	20.6	+108.1%
EPRA earnings per share (p)	1.6	3.4	+112.5%
Gross margin (%)	58.8	67.1	+8.3% pts
Dividend per share (p)	2.5	2.75	+10.0%

Balance sheet
Total accounting return (%)	4.6	10.5	+5.9% pts
EPRA NTA per share (p)	106.7	115.4	+8.2%
Portfolio valuation (£m)	1,021.3	1,078.9
Cash and undrawn committed facilities (£m)	81.0	95.8 ¹
Property loan-to-value (%)	33.1	31.1	-2.0% pts

¹ Including £20.0 million secured post year end

Significant earnings growth underpins strong financial performance

·	Revenue increased 30% to £73.0m (2021: £56.0m)
·	EPRA EPS increased 113% to 3.4p (2021: 1.6p)
·	Portfolio valuation £1,078.9 million up 7.3% like-for-like (2.4% net of capex), demonstrating sectors resilience.
·	Net initial yield of 5.2% (2021: 5.3%)
·	EPRA NTA per share increased 8.2% to 115.4p (2021: 106.7p)
·	Total dividend paid and payable for the year of 2.75p, ahead of commitment
·	Total accounting return of 10.5% (2021: 4.6%)

Operational performance driven by record revenue occupancy

·	Like-for-like rental growth of 5.2% for academic year 2022/23, supported by dynamic pricing
·	99% revenue occupancy achieved for academic year 2022/23, a record for the business
·	90% revenue occupancy for financial year 2022 (2021: 71%)
·	Operational transformation completed, with all activities directly managed and controlled
·	Clustering strategy driving improved operating margins

Actively managing the property portfolio

·	Non-core disposal programme generates £53.1m from the sale of seven properties in line with book value with proceeds redeployed into the core portfolio investment programme
·	Completed the sale of a further property post year end, generating £2.6m
·	Acquisition of Market Quarter Studios in Bristol for £19.0m adding 92 beds to our Bristol cluster

Progressing developments and refurbishments

·	Developed or refurbished 263 beds for the 2022/23 academic year, including a state-of-the-art development at St Mary's in Bristol
·	Successful launch of Post-Grad accommodation pilot in Edinburgh, providing a platform for further growth
·	Over 250 refurbished beds expected to be delivered for the 2023/24 academic year

Robust balance sheet

·	Property loan to value at 31.1%, in line with long-term target of 35%
·	Weighted average cost of debt 4.0% (2021: 3.0%), 89% with interest rate protection
·	Cash and undrawn committed facilities of £95.8m

Delivering consistent customer service

·	Completed roll out of our student app across all locations to improve service offer and customer engagement
·	Hello Student awarded Best Student Well-being (UK and Ireland) at Global Student Living Awards 2022
·	Continued improvement in Global Student Living Index Net Promoter Score from 22 to 27, which compares favourably against purpose built student accommodation average of 14 and 9 for university halls

Responsible business

·	Net Zero strategy launched, targeting net zero by 2033 with £10.0 million earmarked for investment in green initiatives over the next two years
·	Further £7.0m invested in fire safety works in 2022, with £14.5m ring-fenced for investment in 2023

Positive outlook for academic year 2023/24 supported by resilience of the PBSA sector

·	Strong bookings launch, with revenue occupancy of 65% currently secured, ten weeks ahead of prior year
·	Like-for-like rental growth in excess of 6% now anticipated
·	Targeting revenue occupancy >97%

Results presentation at 09.00 (GMT) today

To access the live webcast, please register in advance here:

https://stream.brrmedia.co.uk/broadcast/63b7f236d908a85f58e0d796

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 empiric@fticonsulting.com

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 is 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.

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

2022 has been another year of razor-sharp focus on our strategic priorities, with significant progress made across all key metrics. The steps we have taken over the last five years to transform the operations of the business, improve our brand and focus on clusters of high quality accommodation are delivering tangible results, evidenced by the record revenue occupancy, significant growth in earnings and improved operating margin that the business achieved in the year.

We have delivered a strong performance in 2022, with key metrics above pre-pandemic levels. The year saw us achieve a record level of occupancy at 99 per cent for academic year 2022/23, alongside strong like-for-like rental growth of 5.2 per cent. We recorded good growth in the portfolio valuation, up 2.4 per cent on a like-for-like basis, particularly in the first half of the year following the removal of a COVID related adjustment of £6.2 million and a combination of yield compression and rental growth. The 31 December 2022 valuations have remained materially in line with the half year, with strong rental growth offsetting marginal outward yield shift in the second half of the year. The balance sheet remains strong with property loan-to-value modest at 31.1 per cent, comfortably in line with our long-term target of 35 per cent. Including dividends paid during the year of 2.5 pence, we have delivered a total accounting return of 10.5 per cent for the year.

Operationally the business has had an active year. We have now completed the transformation of our operating platform, with all operations now internally managed, creating value through greater control, transparency, data management and agility. We continued to strengthen the Hello Student brand, launching our student app; embedded our new revenue management and dynamic pricing platform; and made significant steps towards becoming a more sustainable business. We also welcomed a number of new people into our leadership team during the year.

Driving performance through data analytics

The transformation of our operational capabilities has provided us access to richer and more timely information. We are able to react to trends and changing demands at pace and target our customer mix with much greater flexibility.

For academic year 2022/23, as a result of targeted marketing during the period of the pandemic, half of our customers were from the UK, an increase of one third from pre-pandemic levels. Although our Chinese customer base remains strong, this now represents just under 30 per cent of our students. We continue to target markets where we are underweight relative to the opportunity available, for example Indian students, where we have recently experienced strong growth.

Our revenue pricing model coupled with our direct-let model, allows us to maximise revenue relative to demand dynamics on a city by city basis but also down to site specific room types. Not only did we achieve record occupancy for the academic year 2022/23, but overall like-for-like rental growth of 5.2 per cent was comfortably ahead of base uplift pricing of 1.9 per cent.

We have used historical booking and amendment data to review and simplify our room categorisation, more than halving the categories, making the customer choice very much simpler to navigate.

Actively managing the property portfolio

In early 2021 we set out a plan to dispose of a modest portfolio of non-core assets. At the time those assets identified for disposal represented approximately 10 per cent of the portfolio, a little over £100 million by value.

Properties included in the disposal programme were typically either not of a size or configuration which could easily be converted to our brand standard, outside the catchment area of a top quality university or a single standing building in a city where the opportunity to implement our clustering strategy is challenged.

By 31 December 2022, we had disposed of or contracted to dispose of assets generating £71.3 million, of which £53.1 million was generated from the disposal of seven properties during 2022. Despite recent market disruption, we successfully disposed of two properties above book value in the final quarter of 2022, demonstrating the continued attractiveness and resilience of the purpose built student accommodation sector. More recently, discussions have advanced and a further £50 million remains under offer or in advanced discussions.

Proceeds from disposals have, to date, largely been deployed into our core portfolio investment programme. Opportunities are evaluated before proceeds are redeployed, including debt prepayment or reinvestment in new developments or acquisitions to grow our core Hello Student portfolio.

In February we announced our first acquisition since 2018, the 92 bed Market Quarter Studios scheme in Bristol which we acquired for £19.0 million. This acquisition, together with the opening of St Mary's, Bristol has more than doubled the number of beds we provide in the city to 404 beds, with four well located, high quality sites within a ten minute walk of each other and the University campus. This provides a great example of our clustering strategy in action, where we have been able to maintain our boutique proposition whilst improving our margin in the city from 69 per cent to 76 per cent.

Progressing developments and refurbishments

In September, in time for the start of the 2022/23 academic year, we opened St Mary's, Bristol. This former Victorian hospital has been thoughtfully converted into a 153 bed scheme a stone's throw from the University of Bristol. The property provides first class accommodation together with a suite of student well-being initiatives and strong sustainability credentials, with a BREEAM Excellent accreditation expected. The property has delivered an IRR in excess of 20 per cent.

In November, our first bespoke Post-Grad project was completed at Southbridge, Edinburgh. An extensive refurbishment of the property delivered this 59 bed scheme adjacent to the University of Edinburgh. Largely pre-let upon completion, we welcomed our first Post-Grad customers in late November.

Following extensive customer research our Post-Grad product aims to address the specific requirements of the more mature Post-Grad student, providing amenity-lite accommodation with fully self-contained apartments, which are typically 20 per cent larger on average than our Under-Grad apartments and command a rental premium of 20 per cent to our undergraduate offer in the City. We believe there is a significant opportunity for a tailor made proposition for post-graduates under our new brand "Post-Grad by Hello Student", since this segment makes up nearly 25 per cent of all UK University students.

Strong market fundamentals continue

Student applications continued to grow into the 2022/23 academic year, and UCAS and HESA data illustrates that demand for UK higher education remains robust with both undergraduate and post-graduate applications forecast to continue growing.

For academic year 2022/23, undergraduate applications from UK domestic students grew 1.3 per cent, while applications from non-EU students grew 13.5 per cent. UCAS predict overall undergraduate applications will increase by nearly 30 per cent over the next five years. The number of post-graduates has climbed to 820,000 for academic year 2022/23, an increase of 10.4 per cent from 2021/22, the highest annual increase experienced in the past five years.

The agency StuRents predicts the UK could have a shortfall of 450,000 student beds by 2025, exacerbated by a potential contraction in the HMO market which would drive more students towards the PBSA sector. Customer demand for purpose built student accommodation has never been so strong.

Supporting our customers and delivering consistent service

Core to our values is a customer-first philosophy. Every area of our business is encouraged, and motivated, to live these values. We are aware with rising rents that our customers expect an increasingly high quality experience and value for their money. Their experience is therefore paramount to the development of our strategic priorities.

Prior to the start of the 2022/23 academic year, we launched our new student app. The app has provided a platform for greater and more timely customer engagement and a means to further improve our service offer. Amongst other functions, the app provides students the ability to report issues and monitor progress toward resolution, receive site related information in a timely manner, be notified when parcels are available for collection and arrange social events. The app has been a resounding success with great feedback received. We currently have over 7,000 active users and numbers continue to grow.

The most substantive evidence of customer service and the benchmark we use within our business is the Global Student Living Index's Net Promoter Score ("NPS"). We are proud to report that our NPS score improved again this year, from 22 to 27. To put this in context, the latest NPS score for all private purpose built student accommodation was 14, whilst the score for university halls was 9.

Behind the data, the most important factors for students when selecting accommodation were proximity to their place of study, feeling safe and secure and the size, condition and quality of their accommodation. These are all aspects at the very heart of our studio based brand proposition. The mental health and well-being of our customers remains a priority. Of our customers responding to the survey, 71 per cent said our accommodation had a positive impact on their well-being, with 73 per cent responding to say they felt our accommodation teams cared about their well-being. This is an extremely encouraging result following the investment we have made in training our people to identify potential issues and assist students to source the professional support they may require, particularly at times of stress such as during examinations.

Developing our people

At the heart of any service business is the people that design, support and deliver great customer experience. It remains a priority to invest in and motivate talent. Through rewarding, training and developing our people we ensure our brand remains at the leading edge of customer service and experience.

At a time when hiring talent is very competitive, there is particularly strong rationale for focussing on employee retention and development. During the year we improved our retention rate to almost 80 per cent, whilst internal promotions accounted for nearly 40 per cent of all non-entry level vacancies. We invested in a number of our 'rising stars' this year, with 25 of our middle managers having been sponsored to complete an accredited leadership programme.

We are proud members of the Real Living Wage Foundation, meaning our lowest paid employees are paid above the minimum wage and received salary increases in line with inflation. During a time of increased cost-of-living pressures we were pleased to support our employees, with average compensation increases exceeding eight per cent. Employer pension contributions were also standardised this year, with all eligible employees now entitled to receive 7.5 per cent.

Having invested in a programme of well-being and engagement initiatives, we're pleased to report that our colleague engagement score of 84 per cent continues to compare favourably to the national average of 70 per cent.

Portfolio safety

Safety will always remain of paramount importance to our business. We have a responsibility to ensure that everyone who is living, working in or visiting our buildings is kept safe. This is also a key consideration for our customers. We ensure that our buildings comply with all relevant regulations and also with industry best practice. A summary of progress and key achievements this year is set out below.

Fire safety

There was considerable focus on fire safety again this year. Having allocated £37 million toward fire safety initiatives in 2021, we continued to progress our five-year programme of works, prioritised according to risk. In 2022 we invested a further £7.0 million, primarily on internal fire stopping while ensuring the appropriate solutions were investigated and permission sought, allowing works to start in the first half of 2023 on the external works.

Our buildings continue to be inspected on a regular basis to ensure that we identify and eliminate hazards. To assess the buildings, we engaged specialist consultants to undertake thorough assessments of general safety, hazards, fire risks and prevention and water systems and treatment against legionella.

During the year we employed a new fire risk assessor, established a clear and comprehensive fire risk management system and conducted fire marshal training, fire drills and student fire safety awareness campaigns across our entire business and all its sites.

Health and Safety

Key achievements in 2022 included a full review of the health and safety policy and introduction of new blueprint standards that are more user friendly and manageable. We implemented a new contractor management standard and launched SafetyNet to help us manage accident, incident and fire risk assessments. With a dedicated Health, Safety & Fire Manager in place, we have a busy period ahead with a clear focus on training and audit.

Becoming a more sustainable business

In August we published our full Net Zero strategy and set out seven key performance indicators to allow us to track our progress towards our 2033 commitment. The journey is set out in three clear phases with the first focussed on engagement and training.

I'm pleased to report that the Board has allocated significant capital to green initiatives in 2023 and 2024 which should allow us to accelerate the programme and deliver tangible benefits to all stakeholders sooner. A detailed pathway to decarbonisation is being established this year with the aim of reducing energy consumption and managing future EPC risk. Further details are set out in the ESG report which will accompany the annual report when published.

Strategy and outlook

We remain confident in the outlook for our business and the wider purpose built student accommodation sector. Our focus is on continuing to drive operational efficiencies through acquiring or developing new sites in cities that are close to well-located existing sites and top performing universities. Our clustering strategy is delivering benefits through scale, whilst enabling us to maintain the more boutique, personalised experience associated with the Hello Student proposition.

Having already secured 65 per cent revenue occupancy for the 2023/24 academic year, a level reached some ten weeks earlier than in the prior year, we are confident of achieving another successful year from an occupancy perspective. In October 2022 we issued guidance that we anticipated achieving like-for-like rental growth in excess of five per cent for academic year 2023/24, however our direct-let model and dynamic pricing capability provides management with confidence that like-for-like growth of at least six per cent can now be achieved.

Given this strong performance, the Board is increasingly confident in its progressive dividend strategy and will target a minimum dividend payment of 3.25 pence per share for the 2023 financial year, having paid and declared dividends totalling 2.75 pence per share for the 2022 financial year.

Although significant progress continues to be made, recent investment market turbulence has delayed our disposal programme aspirations and, it now looks increasingly likely that we will continue to hold a number of non-core assets beyond the original 18-month timeline set out in 2021. As demonstrated in the financial review on page 11, this will have an impact on gross margin into 2023, as non-core properties are typically less efficient and located in single asset cities where the benefits of clustering cannot be realised. Nevertheless, we expect the programme to be materially complete by the end of 2023.

The business is now well positioned for growth and we continue to recycle the proceeds of non-core asset sales into our pipeline of developments and refurbishments. We operate in a resilient sector, and we continue to see high levels of demand for our product for the 2023/24 academic year which underpins our confidence in the outlook for the business and our commitment to our customer-first philosophy.

DUNCAN GARROOD

Chief Executive Officer

16 March 2023

Operating review

Our focus on clustering premium quality properties in prime, undersupplied cities within close proximity to top-tier universities continues to deliver strong results. Our brand proposition, studio-led focus and personalised service offer continues to excel comparators.

Overview

We have continued to experience strong post-pandemic demand for our properties, with the academic year 2022/23 seeing record occupancy of 99 per cent. The Company's direct-let strategy, which allows us to capture rental growth and inflation in a more timely manner than a nomination led strategy, delivered like-for-like rental growth of 5.2 per cent.

The broadened appeal of our brand proposition is reflected in strong feedback from our customers, allowing Hello Student to surpass all key benchmarks. A high level of customer satisfaction resulted in a re-booker rate of 18.5 per cent for academic year 2022/23, with an expectation this will exceed 20 per cent for academic year 2023/24.

Demand has continued to grow from both domestic and international students, with university applications increasing 2.1 per cent in 2022. Domestic student numbers have been fuelled by a demographic increase in 18 year olds coupled with a perception of a weakening economy and employment market, whilst post-graduate numbers increased 10 per cent between 2021 and 2022. The growth in demand for the PBSA sector may be further exacerbated by a contraction in the HMO market.

Our marketing and sales strategy has continued to target domestic students as well as international markets where our brand is underweight, for example India and Nigeria which have seen some of the strongest growth in international student numbers. Demographically, for academic year 2022/23, 50 per cent of our students were UK nationals, 29 per cent Chinese with 21 per cent other international.

Dynamic pricing has enabled demand and data led pricing decisions to be made in a manner which considers price sensitivity not only in cities but also down to exact room types. For academic year 2022/23 our average inflationary increase was 2.1 per cent, but with 3.1 per cent additional benefit captured by dynamic pricing, we were able to deliver like-for-like revenue growth in excess of 5 per cent. Although affordability remains a key concern in pricing decisions, dynamic pricing has been particularly important during the high inflationary period recently experienced.

Portfolio overview

The 2022 financial year saw continued focus on repositioning the portfolio. Notwithstanding challenging investment market conditions, particularly in the second half of the year, we disposed of or contracted to dispose of seven properties for £53.1 million. A further non-core property was sold post year end generating £2.6 million.

Proceeds from disposal have largely been directed toward an extensive refurbishment and capital programme targeting fire safety compliance alongside the elimination of Segment B and the conversion of Segment C properties, as outlined below.

A portfolio segmentation review was carried out in early 2021 with each property assigned a strategic segment reflecting the Group's investment style, as follows:

· Segment A : Properties that are well located, appropriately configured and on-brand

· Segment B: Properties that fundamentally meet our key criteria but require extensive refurbishment to become on-brand

· Segment C: Well-located properties which are configured in a manner that lend themselves better to a conversion to our new brand Post-Grad by Hello Student, this is typically based on room mix, size and amenity

· Segment D: These properties are typically not of a size or configuration that lend themselves to become a core Segment A or Segment C scheme, are typically located in a single asset city whereby the benefits of clustering can't easily be realised and/or are not aligned to a top-tier university.

Strategic segmentation	Segment A (£m)	Segment B (£m)	Segment C (£m)	Segment D (£m)	Total market value (£m)	NIY (%)
Operational portfolio	724.2	122.0	139.8	70.5	1,056.5	5.2
Commercial portfolio	7.4	5.6	3.7	2.5	19.2	7.8
Development portfolio	-	-	-	3.2	3.2
Total	731.6	127.6	143.5	76.2	1,078.9
%	67.8	11.8	13.3	7.1 ¹	100.0

¹ Adjusting for sales exchanged pending completion or exchanged and completed post year end, Segment D now represents 5.6 per cent of the portfolio

Valuers quality segmentation	Properties		Operational beds	Market value (£m)	Market value (%)
Super prime regional		26	2,590	478.2	44.3
Prime regional		48	4,651	512.0	47.5
London		2	151	29.0	2.7
		76	7,392	1,019.2	94.5
Secondary		10	1,141	59.7	5.5
Total		86	8,533	1,078.9	100.0

Adjusting for acquisitions, disposals and properties undergoing development, the like-for-like portfolio increased in value by 2.4 per cent during 2022. This is almost entirely attributable to underlying income growth assumptions which average 6 per cent. The completion of our two main developments, St Mary's, Bristol, and Southbridge, Edinburgh collectively delivered £18.4 million in valuation gain, net of capital expenditure.

Capital expenditure programme

Our programme of refurbishment, fire safety works and green initiatives continues at pace. We have allocated £8.0 million from our original refurbishment plan in favour of an acceleration of green initiatives targeting a reduction in energy consumption and managing future EPC risk. Given recent volatility in energy costs, our targeted return hurdle of 9% to 11% IRR remains appropriate.

In respect to our programme of fire safety works, all properties have now been surveyed with 61 per cent of the portfolio is now certified.

	Refurbishment (£m)	Fire safety works (£m)	Green initiatives (£m)
Five year Plan (2021 - 2025)	44.1	37.0	4.0
Reallocation	(8.0)	-	8.0
Revised plan	36.1	37.0	12.0
Invested to date	4.7	10.3	0.5
Forecast 2023 investment	6.0	14.5	5.0

In addition to the above, ongoing capital life cycling works require around £4.0 million per annum.

Commercial portfolio

We have continued to actively manage the 42-unit commercial estate that generally sits below our operational portfolio, with a number of value creating projects completed. Notable deals include a five year lease with a café operator on a long-term vacant unit in Cardiff. A five-year lease renewal was secured in Bristol and two further five year renewals were completed in Lancaster.

A number of asset management initiatives are planned for 2023 to drive value and enhance the student offering. We have agreed terms with a convenience store operator to take a lease, subject to planning, on a parade of shops in Manchester. Planning has also been submitted for the conversion of another vacant unit in Newcastle for further student accommodation, adding bedspaces and improving student amenities. In Bristol, terms have been agreed for the part letting of one vacant unit where we have an opportunity to also create a new gym amenity in the remaining space, leaving only one vacant unit in the portfolio where there are advanced discussions ongoing.

Acquisitions and developments

In February 2022 we acquired the 92 bed Market Quarter scheme in Bristol. The property was pre-let on acquisition and has been extremely well received by our customers. The property was fully occupied for the academic year 2022/23 and is in high demand from re-bookers for the recently launched 2023/24 academic year. Since acquisition, the property has delivered an IRR in excess of 20 per cent.

Also in Bristol, our 153 bed St Mary's development opened to students at the start of the 2022/23 academic year. The property, a former Victorian hospital, has been lovingly developed in to best-in-class student accommodation which is well located only a few minutes' walk from the University of Bristol. The development has delivered an IRR in excess of 20 per cent.

Together with the acquisition of Market Quarter, the Group more than doubled its bed offer in Bristol during 2022, allowing the benefits of clustering to be realised. Gross margin has improved from 69 per cent to 76 per cent, a seven percentage point increase, whilst enabling a better quality service offer for our Bristol based customers.

In late November 2022, our first post-graduate scheme at Southbridge, Edinburgh opened to students. The 59 bed property was developed to pilot a unique offer aimed exclusively at port-graduates, delivering a bespoke product aimed at a growing segment of the market. The property has delivered an yield on cost of 6.0 per cent and IRR above 12 per cent.

Refurbishment pipeline

Looking ahead to 2023, we have allocated £6.0 million from our five year refurbishment programme toward major refurbishment activity encompassing over 250 beds. Most significant of which is at our St. Mark's, Leeds property, Brook Studios in Birmingham and Summit House in Cardiff. Two of these schemes are currently within Segment B and are expected to be moved to our on-brand Segment A.

Works are typically completed over the summer, following a short selling or via rolling refurbishment programme throughout the year, with no more than 25-30 beds impacted at any one time.

For academic year 2023/24 we have taken the decision to close our 173 bed Brunswick House scheme in Southampton. This is to facilitate an extensive refurbishment of the scheme alongside fire safety works. As above, Brunswick House is currently a Segment B property, which we expect will reopen to students as a Segment A property for the start of academic year 2024/25.

We continue to target an IRR of 9-11 per cent on all refurbishment works.

Global Student Living Index

Our Hello Student brand delivered an improved net promoter score of +27 in the 2022 Global Student Living Index survey. This score, up from +22 at December 2021, compares very favourably with University Halls which scored +9 and Private Halls of +14.

Proximity to place of study, feeling safe and secure and the condition and quality of accommodation remain the most important factors for students selecting their accommodation. Overall a stronger retention intent has been received, with a significant increase in students saying they plan to stay in their accommodation.

Over 70 per cent of students responding said that their accommodation had a positive impact on their well-being and that our people care about their well-being. In 2022 Hello Student were proud winners of the Global Student Living Index's award for student well-being.

Financial review

I'm delighted to present my first financial review as successor to Lynne Fennah, who left the business in October 2022. I would like to thank her for a thorough handover, but also for her sound stewardship of the business during her tenure.

Overview of the year

The business achieved record revenue occupancy for academic year 2022/23, with 99 per cent now achieved following January letting activity. Capitalizing on strong post-pandemic demand, our brand and service proposition, coupled with the implementation of our demand-led pricing model delivered like-for-like growth in revenues of 5.2 per cent, and revenue for the financial year to 31 December 2022 of £73 million. This is a great result given the continued effects of the pandemic on academic year 2021/22, which impacted eight months of the 2022 financial year. Gross margin improved to 67 per cent, in line with guidance.

Rising interest rates and cost inflation created challenges, however, having fixed utility costs through to September 2024 we are able to mitigate this pressure on a significant cost line in our income statement.

One third of our debt structure was exposed to rising interest rates, which exposed the income statement to some volatility, particularly in the final quarter of the year. Finance costs totalled £15.0 million, roughly 15 per cent higher than we had originally anticipated. Although the Group's weighted average cost of debt has significantly increased, long-term rates have softened providing an opportunity to secure further interest rate protection post year end.

IFRS profit for the year was £67.7 million, including a £45.6 million valuation uplift, whilst EPRA earnings, our measure of recurring earnings, were £20.6 million, representing 3.4 pence per share.

Total accounting return, including both dividends paid in the year of 2.5 pence per share plus growth in EPRA Net Tangible Asset value being 8.7 pence, was 10.5 per cent.

Income statement

	Core portfolio	Non-core (bucket D)	2022	2021
	£m	£m	£m	£m
Revenue	66.3	6.7	73.0	56.0
Property expenses	(20.1)	(3.9)	(24.0)	(23.1)
Gross profit	46.2	2.8	49.0	32.9

Gross margin	70%	42%	67%	59%

Administrative expenses			(13.4)	(10.6)

Operating profit			35.6	22.3

Revaluation			45.6	17.6
Gains on disposals			1.5	1.7
Net finance costs			(15.0)	(12.4)

IFRS Profit			67.7	29.2

Weighted average ordinary shares (m)			603.3	603.2

IFRS EPS (pence)			11.2	4.8

EPRA EPS (pence)			3.4	1.6

Revenue has increased 2.7 per cent like-for-like for the financial year of 2022. Revenue occupancy for the current 2022/23 academic year is strong at 99 per cent, resulting in 90.5 per cent occupancy across the financial year.

The Group seeks to achieve a gross margin of greater than 70 per cent. For 2022 we achieved 67 per cent, in line with guidance and largely due to the poorer margins achieved on our non-core portfolio, as set out above. Pleasingly, gross margin on our core portfolio achieved 70 per cent in 2022. The delay in our disposal programme does, however, mean achieving greater than 70 per cent across the Group in 2023 will be challenging, as non-core assets are typically located in single asset cities where the benefits of clustering cannot be realized.

Administrative expenses were £13.4 million, representing 18.4 per cent of revenue. This has increased from £10.6 million in 2021. The Group has undergone a transformation of its operating capabilities, to position itself for growth and has invested in its people and processes in order to deliver this. However, most administrative cost lines are also exposed to inflationary pressures, which contributed to the increase. We expect the cost base as a percentage of revenue to decrease as the business targets growth.

Balance sheet

	2022	2021
	£m	£m
Property (market value)	1,078.9	1,021.3
Cash on hand	55.8	37.1
Bank borrowings drawn	(391.2)	(375.0)
Other net liabilities	(42.7)	(35.8)

Net assets	700.8	647.6

Diluted number of shares	607.2	606.6

EPRA NTA per share (pence)	115.4	106.7

Property LTV EPRA LTV	31.1% 32.7%	33.1% 34.3%

Strong valuation gains were recorded on development properties, most notably St Mary's, Bristol and Southbridge, Edinburgh, both of which have now completed and are operational for academic year 2022/23. The Group's net asset value increased 8.2 per cent in 2022 primarily due to an increase in the value of our properties of £45.6 million and retained current year EPRA earnings (net of dividend paid) as set out below.

Evolution of net asset value	£m
31 December 2021	647.6
EPRA earnings	20.6
Like-for-like revaluation	22.9
Non-like-for-like revaluation	22.7
Dividends	(15.2)
Other	2.2
31 December 2022	700.8

Portfolio valuation

	2022	2021	Gain/(loss)¹	Change
	£m	£m	£m	%
Like-for-like property portfolio	990.5	952.8	22.9	2.4
Acquisitions	25.9	-	6.4	24.7
Disposals	-	39.8	(2.1)	(5.3)
Developments	62.5	28.7	18.4	29.5

Portfolio valuation	1,078.9	1,021.3	45.6

¹ net of capital expenditure and head lease amortisation

In 2022, the like-for-like ("LfL") portfolio increased by £22.9 million or 2.4 per cent with non-LfL properties (most notably development properties) increasing £22.7 million. The portfolio net initial yield was 5.2 per cent, stable since June with a 10 basis point contraction on December 2021. The reversionary yield stands at 5.5 per cent. This was a strong valuation performance in a challenging year when many other sectors experienced considerable outward yield shift, particularly in the second half of 2022, demonstrating the sub-sector's resilience and strong demand led income underpin.

Market Quarter Studios, a strategically aligned high quality asset in Bristol, was acquired during the year for £19.3 million. Since acquisition its valuation has increased by £6.4 million (25.2 per cent, net of capex).

Six assets were disposed during the year. Disposal proceeds were £39.7 million, resulting in a profit of £1.5 million, after costs. Contracts were exchanged for a further property disposal, Emily Davies, Southampton, was exchanged pre year end with completion targeted for April 2023.

Capital expenditure for the year on both the LfL and development portfolio was £30.4 million.

Debt

Bank borrowings drawn at 31 December 2022 was £391.2 million, of which 71 per cent is at a fixed rate. Fixed rate debt carries a weighted average term to maturity of 5.7 years and a weighted average cost of 3.4 per cent. Floating rate debt of £114.0 million carries a weighted average cost of debt of 5.4 per cent and weighted average term to maturity of 2.5 years. Since year end, with the stabilisation of longer term interest rates, we have extended interest rate protection to cover 89 per cent of drawn debt by putting in place an interest rate cap on an additional £67.4 million of floating rate debt.

The overall weighted average cost of debt at 31 December 2022 was 4.0 per cent and average term to maturity was 4.8 years.

Property loan to value was 31.1 per cent at the year end, below our longer term target of 35 per cent, primarily due to valuation gains. Cash reserves at 31 December 2022 totalled £55.8 million, earmarked for working capital, dividend payments and capital expenditure. Undrawn committed facilities were £20.0 million at the balance sheet date, increasing to £40.0 million post year end following the refinancing of an unsecured facility which was repaid in late 2022. The Group has no further refinancing risk in 2023, with £64.0 million maturing in 2024. See note 1.4 for further information.

All loan covenants were fully compliant during the year.

Cashflow

	2022	2021
	£m	£m
Operating cash flow	43.6	42.4

Property acquisitions and capital expenditure	(49.1)	(16.6)
Property disposals	39.7	17.9
Net cash flows from investing activities	(9.4)	1.3

Dividends paid	(16.7)	(13.6)
Net borrowings drawn/(repaid)	14.6	(15.1)
Finance costs	(13.4)	(11.8)
Financing cash flows	(15.5)	(40.5)

Net cash flow	18.7	3.2

Strategic capital recycling continued with proceeds from the disposal of non-core assets directed into acquisitions aimed at advancing our clustering strategy in key cities, or into our core portfolio development, refurbishment and remediation programme.

Cash paid in relation to dividends includes the payment of 2022 dividends and resulting withholding tax, but also the withholding tax settled in early 2022 arising on the 2021 dividend paid to shareholders in the final quarter of that year.

In respect of financing cashflows, £25.0 million was drawn from our revolving credit facility, largely to fund acquisitions and £11.2 million of development financing in relation to works at St Mary's, Bristol. 20.0 million was repaid in December 2022 towards settling a facility due to mature in March 2023, on which no early termination fees were due.

Finance costs paid have increased in line with further borrowings and increasing interest rates charged on the Group's floating rate debt.

Going concern

The Board continues to place particular focus on the appropriateness of adopting the going concern assumption when preparing the Group's consolidated financial statements.

In light of the Group's liquidity position, its modest level of gearing and capital commitments, the Directors have concluded that, in reasonably possible adverse scenarios, adequate resources and mitigants remain available to continue to operate for the period to 31 December 2024. 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 2022.

Attention is drawn to note 1.4 of the financial statements and to the Company's statement in respect of viability as set out within the annual report, once published, for further details surrounding the conclusion reached.

Dividends

A final interim dividend of 0.875 pence per share has been declared for the final quarter of 2022, bringing total dividends paid and payable in respect of 2022 to 2.75 pence. This represents an 81 per cent pay out on EPRA earnings per share. The dividend will be paid as a Property Income Distribution on 14 April 2023 to shareholders on the register at 31 March 2023.

DONALD GRANT

Chief Financial & Sustainability Officer

16 March 2023

EPRA and other alternative performance measures

Analysing our performance in line with industry standard measures

EPRA disclosures

The following is a summary of the EPRA performance measure 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	2022	2021
	Earnings (£m)		The companies underlying earnings from operational activities	8	20.6	9.9
	Net tangible assets (NTA)		The underlying value of the company assuming it buys and sells assets	9	115.4	106.7
	Net disposal value (NDV)		The value of the company assuming assets are sold, and the liabilities are settled, not held to maturity.	9	117.9	104.4
	Net reinstatement value (NRV)		The value of the assets on a long-term basis, assets and liabilities are not expected to crystallise under normal circumstances.	9	121.8	112.4
	Net initial yield		Rental income less operating costs divided by the market value of the property, increased with purchasers costs.	Below	5.2%	5.3%
	Cost ratio (incl. direct vacancy costs)		Administrative & operating costs including costs of direct vacancy divided by gross rental income.	Below	51%	60%
	Cost ratio (excl. direct vacancy costs)		Administrative & operating costs excluding costs of direct vacancy divided by gross rental income.	Below	47%	46%
	Like-for-like rental income (in respect of academic year)		Compares the growth in rental income that has been in operation and not under development, throughout both the current and comparative year	Financial review	5.2%	2.6%
	Like-for-like capital		Compares the growth in capital values of the Group's portfolio which was controlled by the Group and both balance sheet dates, net of capital expenditure and excluding development properties	Financial review	2.4%	3.0%
	Loan to value¹		Ratio of net debt, including net payables, to the sum of the net assets, including net receivables, of the Group, expressed as a percentage	below	32.7%	34.3%
¹ EPRA LTV is a new measure introduced by EPRA in the current period. The EPRA measure differs from the Property LTV presented in Note 31 as it includes net payables and receivables. EPRA LTV was not presented in the financial statements at 31 December 2021 as the measure had not yet been introduced. EPRA LTV would have been presented as 34.3% at 31 December 2021.

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").

APM's 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 APM's included within the annual report and accounts.

Measure	Definition of measure	Note/ reference	2022	2021
Total Return	Growth in EPRA NTA plus dividends paid as a percentage of opening EPRA NTA	31	10.5%	4.6%
Net debt (£m)	Borrowings less cash and cash equivalents	31	335.4	337.9
Property loan to value	Net debt divided by property market value	31	31.1%	33.1%
Dividend cover	EPRA earnings relative to dividends declared for the year	31	124%	64%
Dividend pay-out ratio	Dividends declared relative to EPRA earnings	31	81%	156%

		Group
EPRA Net Initial Yield and topped-up NIY		Year ended 31 December 2022 £'m	Year ended 31 December 2021 £'m
Investment Property		1,078.9	1,021.3
Less: development		(3.3)	(28.7)
Completed property portfolio		1,075.6	992.6
Allowance for purchases cost		38.5	34.2
Grossed up completed property portfolio valuation		1,114. 1	1,026.8
Annualised cash passing rental income		81.6	77.5
Property outgoings		(24.0)	(23.1)
Annualised net rents		57.6	54.4
Add: notional rent expiration of rent-free periods or other lease incentives		0.1	0.2
Topped-up net annualised rent		57.7	54. 6
EPRA NIY		5.2%	5.3%
EPRA "topped-up" NIY		5.2%	5.3%

EPRA Cost ratios
Operating expense line per IFRS income statement		24.0	23.1
Administration costs		13.4	10.6
Ground rent costs		-	-
EPRA Costs (including direct vacancy costs)		37.4	33.7
Direct vacancy costs		(3.2)	(8.1)
EPRA Costs (excluding direct vacancy costs)		34.2	25.6

Gross Rental Income less ground rents - per IFRS		73.0	56.0
Less : service fee and service charge costs components of Gross Rental		-	-
Gross Rental Income		73.0	56.0

EPRA Cost Ratio (including direct vacancy costs)		51%	60%
EPRA Cost Ratio (excluding direct vacancy costs)		47%	46%
EPRA Loan to Value ("LTV")
Bank borrowings drawn	391.2		375.0
Net payables	17.8		12.2
Less cash held at the year end	( 55.8)		( 37.1)
Net borrowings	353 .2		350 .1
Investment property at fair value	1,061.9		966.7
Property held for sale	13.7		25.9
Property under development	3.3		28.7
Property value	1,078.9		1,021.3

EPRA LTV	32.7%		34.3%

Statement of Directors' responsibilities

The statement of Directors' responsibilities has been prepared in relation to the Group's Annual Report 2022. 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 16 March 2023.

DONALD GRANT

Director

Group Statement of Comprehensive Income

	Note	Year ended 31 December 2022 £ m	Year ended 31 December 2021 £ m
Continuing operations
Revenue	2	73.0	56.0
Property expenses	3	(24.0)	(23.1)
Gross profit		49.0	32.9
Administrative expenses	4	(13.4)	(10.6)
Change in fair value of investment property	11	45.6	17.6
Operating profit		81.2	39.9
Finance cost	5	(15.0)	(12.4)
Net gain on disposal of investment property		1.5	1.7
Profit/(loss) before income tax		67.7	29.2
Corporation tax	7	-	-
Profit for the year and total comprehensive income		67.7	29.2
Earnings per share expressed in pence per share	8
Basic		11.2	4.8
Diluted		11.1	4.8

Group Statement of Financial Position

	Note	At 31 December 2022 £ m	At 31 December 2021 £ m
ASSETS
Non-current assets
Investment property - Operational Assets	11	1,062. 4	967.2
Investment property - Development Assets	11	3.3	28.7
Property, plant and equipment	13	1.1	0.4
Intangible assets	12	1.9	1.3
Right of use asset		1.3	1.0
Total non-current assets		1, 070.0	998.6
Current assets
Trade and other receivables	14	7.0	7.8
Assets classified as held for sale	15	13.7	25.9
Cash and cash equivalents	16	55.8	37.1
Total current assets		76.5	70.8
Total assets		1, 146.5	1,069.4
LIABILITIES
Current liabilities
Trade and other payables	17	24.8	20.0
Borrowings	18	-	44.7
Lease liability		0.1	0.1
Deferred income	17	33.1	29.9
Total current liabilities		58.0	94.7
Non-current liabilities
Borrowings	18	386.5	326.2
Lease liability		1.2	0.9
Total non-current liabilities		387.7	327.1
Total liabilities		445.7	421.8
Total net assets		700.8	647.6
Equity
Called up share capital	19	6.0	6.0
Share premium	20	0.3	0.3
Capital reduction reserve	21	444.7	459.9
Retained earnings		249.8	181.4
Total equity		700.8	647.6
Total equity and liabilities		1, 146.5	1,069.4
Net Asset Value per share basic (pence)	9	116.1	107.4
Net Asset Value per share diluted (pence)	9	115.4	106.7
EPRA NTA per share (pence)	9	115.4	106.7

These financial statements were approved by the Board of Directors on 16 March 2023 and signed on its behalf by:

DONALD GRANT

Director

Company Statement of Financial Position

	Note	At 31 December 2022 £ m	At 31 December 2021 £ m
ASSETS
Fixed assets
Investments in subsidiaries	30	222.6	187.6
Property, plant and equipment	13	1.0	0.3
Intangible assets	12	1.9	1.3
Right of use asset		1.3	1.0
Total fixed assets		226.8	190.2
Current assets
Amounts due from Group undertakings	14	400.5	369.0
Trade and other receivables	14	0. 3	0.3
Cash and cash equivalents	16	4.3	2.0
Total current assets		405.1	371.3
Total assets		631.9	561.5
CREDITORS
Current creditors
Amounts due to Group undertakings	17	87.8	27.2
Trade and other payables	17	3.1	5.1
Lease Liability		0.1	0.1
Total non-current creditors		91.0	32.4
Non-current creditors
Borrowings	18	-	19.9
Lease liability		1.2	0.9
Total non-current creditors		1.2	20.8
Total creditors		92.2	53.2
Total net assets		539.7	508.3
Capital and reserves
Called up share capital	19	6.0	6.0
Share premium	20	0.3	0.3
Capital reduction reserve	21	444.7	459.9
Retained earnings		88.7	42.1
Total capital and reserves		539.7	508.3

The Company made a profit for the year of £45.9 million (2021: £8.7 million loss).

These financial statements were approved by the Board of Directors on 16 March 2023 and signed on its behalf by:

DONALD GRANT

Director

Group Statement of Changes in Equity

Year ended 31 December 2022	Called up share capital £ m	Share premium £ m	Capital reduction reserve £ m	Retained earnings £ m	Total equity £ m
Balance at 1 January 2022	6.0	0.3	459.9	181.4	647.6
Profit for the year	-	-	-	67.7	67.7
Total comprehensive income for the year	-	-	-	67.7	67.7
Share-based payments	-	-	-	0.7	0.7
Dividends	-	-	(15.2)	-	(15.2)
Amounts recognised directly in equity	-	-	(15.2)	0.7	(14.5)
Balance at 31 December 2022	6.0	0.3	444.7	249.8	700.8

Balance at 1 January 2021	6.0	0.3	475.0	152.0	633.3
Profit for the year	-	-	-	29.2	29.2
Total comprehensive income for the year	-	-	-	29.2	29.2
Share-based payments	-	-	-	0.2	0.2
Dividends	-	-	(15.1)	-	(15.1)
Amounts recognised directly in equity	-	-	(15.1)	0.2	(14.9)
Balance at 31 December 2021	6.0	0.3	459.9	181. 4	647.6

Company Statement of Changes in Equity

Year ended 31 December 2022	Called up share capital £ m	Share premium £ m	Capital reduction reserve £ m	Retained earnings £ m	Total equity £ m
Balance at 1 January 2022	6.0	0.3	459.9	42.1	508.3
Profit for the year	-	-	-	45.9	45.9
Total comprehensive profit for the year	-	-	-	45.9	45.9
Share-based payments	-	-	-	0.7	0.7
Dividends	-	-	(15.2)	-	(15.2)
Amounts recognised directly in equity	-	-	(15.2)	0.7	(14.5)
Balance at 31 December 2022	6.0	0.3	444.7	88.7	539.7

Balance at 1 January 2021	6.0	0.3	475.0	50.6	531.9
Loss for the year	-	-	-	(8.7)	(8.7)
Total comprehensive loss for the year	-	-	-	(8.7)	(8.7)
Share-based payments	-	-	-	0. 2	0. 2
Dividends	-	-	(15.1)	-	(15.1)
Amounts recognised directly in equity	-	-	(15.1)	0.2	(14.9)
Balance at 31 December 2021	6.0	0.3	459.9	42. 1	508. 3

Group Statement of Cash Flows

	Year ended 31 December 2022 £ m	Year ended 31 December 2021 £ m
Cash flows from operating activities
Profit before income tax	67.7	29.2
Share-based payments expense	0. 7	0.2
Depreciation and amortisation	0.6	0.5
Finance costs	15.0	12.4
Gain on disposal of investment property	(1.5)	(1.7)
Change in fair value of investment property	(45.6)	(17.6)
	36.9	23.0
Decrease in trade and other receivables	0.2	6.7
Increase in trade and other payables	3.3	3.5
Increase in deferred rental income	3.2	9.2
	6.7	19.4
Net cash flows generated from operations	43.6	42.4
Cash flows from investing activities
Purchases of tangible fixed assets	( 1.0)	(0.4)
Purchases of intangible assets	(0.9)	(0.5)
Purchase and development of investment property	(47.2)	(15.7)
Proceeds on disposal of asset held for sale, net of selling costs	26. 7	-
Proceeds on disposal of investment property, net of selling costs	13.0	17.9
Net cash flows from investing activities	( 9.4)	1.3
Cash flows from financing activities
Dividends paid	(16.7)	(13.6)
Bank borrowings drawn	36.2	-
Bank borrowings repaid	(20.0)	(15.0)
Loan arrangement fee paid	(1.6)	(0.1)
Lease liability paid	(0.1)	-
Finance cost	(13.3)	(11.8)
Net cash flows from financing activities	(15.5)	(40.5)
Increase in cash and cash equivalents	18.7	3.2
Cash and cash equivalents at beginning of year	37.1	33.9
Cash and cash equivalents at end of year	55.8	37.1

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 2022 to 31 December 2022.

The consolidated financial statements of the Group for the year ended 31 December 2022 comprise the results of Empiric Student Property plc (the "Company") and its subsidiaries and were approved by the Board for issue on 16 March 2023. 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 2022 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 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 £45.9 million (2021: loss of £8.7 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 2022 or the year ended 31 December 2021 but is derived from those accounts. The Group's statutory accounts for the year ended 31 December 2021 have been delivered to the Registrar of Companies. The Group's statutory accounts for the year ended 31 December 2022 will be delivered to the Registrar of Companies in due course. The Auditor has reported on both the December 2022 and December 2021 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 2022, the Group's cash and undrawn committed facilities were £75.8 million and its capital commitments were £2.3 million. Subsequent to the year end, a further £20.0 million committed facility was secured.

Occupancy is a key driver of profitability and cash flows, and at 16 March 2023 occupancy, based on forward reservations for the upcoming 2023/24 academic year was 65 per cent, compared to 36 per cent for the 2022/23 academic year at 2 March 2022.

At the year end three facilities fell due for repayment during the going concern period:

- £20.0 million with Canada Life due to expire in March 2024

- £32.8 million with AIB due to expire in October 2024

- £11.2 million with NatWest due to expire in December 2024.

It is intended that these will be refinanced at maturity and good relationships are maintained with all lenders, discussions have been initiated and lender appetite for the sector remains strong.

In February 2023 an interest rate cap was put in place on the £70.0 million drawn Lloyds facility, capping SONIA at 5 per cent. At time of signing these financial statements the Group had £44.0 million of floating rate debt.

As part of the Group's going concern and viability modelling, certain scenarios are considered to model the impact on liquidity. All of the groups covenants are currently compliant and we envisage compliance to continue to be achieved in a reasonably severe downside scenario. The Group's portfolio could currently withstand a 25 per 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 2.0 times, whereas gross profit is currently in excess of 3.0 times total finance costs, providing a good degree of comfort. Interest cover ratios in place across the Group's debt facilities could currently withstand a 2.5 per cent increase in interest rates before a breach would occur.

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 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 2024. The Directors have considered, in particular:

- a material reduction in revenue, both in terms of occupancy and growth rate;

- inflation remains high, at eight per cent;

- utilities costs increase by 1.5 times current market expectation;

- interest rates increase by 1.5 per cent over current forecasts, impacting the Group's floating rate debt;

- an immediate valuation shock of minus 15 per cent in property valuations; and

- rates at which the expiring debt facilities totalling £64.0 million in the period, could be refinanced. These were assumed to be refinanced at floating rates applicable at the point of expiry and subject to an interest rate uplift of 1.5 per cent.

In addition, the Directors 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 and suspending non committed capital expenditure.

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 2024. 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. 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.

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:

(b) 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.

Summary of Significant Accounting Policies

Basis of Consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 December 2022. 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

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) the contractual arrangement with the other vote holders of the investee;

(b) rights arising from other contractual arrangements; and

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 in the finance income or expense line. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

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, 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 includes cash held on deposit with banks.

Financial Liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability 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.

Other Financial Liabilities

Other financial liabilities include the following items:

- Bank borrowing is 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

Intangible assets are initially recognised at cost and then subsequently carried at cost less accumulated amortisation and impairment losses.

Amortisation has been charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over ten years.

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 the fair values 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.

The criteria for a sale being highly probable per IFRS 5 are as follows:

· management is committed to a plan to sell;

· the asset is available for immediate sale;

· an active programme to locate a buyer has been initiated;

· the sale is highly probable (within twelve months of classification as held for sale unless circumstances are beyond the control of the Group);the asset is being actively marketed for sale at a sales price reasonable in relation to its fair value; and

· actions required to complete the plan indicate that it is unlikely that plan will be significantly changed or withdrawn

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 gains or losses at the retirement or disposal of investment property. Any gains or losses are recognised 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 on the following basis:

- Fixtures and fittings: 15% per annum; 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 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.

1.6 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 which are not yet applicable to the Group:

- IAS 1 Classification of Liabilities as Current or Non-current

- IAS 8 Definition of Accounting Estimates

- IAS 1 IFRS Practice Statement 2 - Disclosure of Accounting policies

- IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction

- IFRS 7/9 Application and Comparative Information

- IFRS 16 Leases: Lease Liability in a Sale and Leaseback

The above standards or interpretations not yet effective are not expected to have a material impact on these consolidated financial statements of the Group.

2. REVENUE

	Group
	Year ended 31 December 2022 £'m	Year ended 31 December 2021 £'m
Student rental income	71.4	56.0
Student rental refunds*	-	(1.8)
Commercial rental income	1.6	1.5
Other income	-	0.3
Total revenue	73.0	56.0
* These were Covid-19 related concessions in the prior year. No such concessions were offered in 2022.

3. PROPERTY EXPENSES

	Group
	Year ended 31 December 2022 £'m	Year ended 31 December 2021 £'m
Direct site costs (income generating properties)	5.7	7.0
Technology services	0.6	0.7
Site office and utilities	12.2	10.4
Cleaning and service contracts	3.3	3.0
Repairs and maintenance	2.2	2.0
Total property expenses	24.0	23.1

4. ADMINISTRATIVE EXPENSES

	Group
	Year ended 31 December 2022 £'m	Year ended 31 December 2021 £'m
Salaries and Directors' remuneration	7.4	5.3
Legal and professional fees	2.3	2.3
Other administrative costs	1.6	1.5
Depreciation and amortisation	0.6	0.5
IT expenses	0.8	0.5
	12.7	10.1
Auditor's fees
Fees payable for the audit of the Group's annual accounts	0.4	0.3
Fees payable for the review of the Group's interim accounts	-	-
Fees payable for the audit of the Group's subsidiaries	0.1	0.1
Total auditor's fees	0.5	0.4
Abortive acquisition costs	0.2	0.1
Total administrative expenses	13.4	10.6

5. NET FINANCE COST

	Group
	Year ended 31 December 2022 £'m	Year ended 31 December 2021 £'m
Finance costs
Interest expense on bank borrowings	14.0	11.6
Amortisation of loan transaction costs	1.0	0.8
Net finance cost	15.0	12.4

6. EMPLOYEES AND DIRECTORS

	Company		Group
	Year ended 31 December 2022 £'m	Year ended 31 December 2021 £'m	Year ended 31 December 2022 £'m	Year ended 31 December 2021 £'m
Wages and salaries	4.4	3.5	10.7	8.8
Pension costs	0.2	0.1	0.5	0.4
Cash bonus	0.5	-	0.9	0.1
Share-based payments	0.7	0.2	0.7	0.2
National insurance	0.6	0.5	1.1	0.9
	6.4	4.3	13.9	10.4
Less: Hello Student^® employee costs included within property expenses	-	-	(6.5)	(5.1)
Amounts included in administrative expenses	6.4	4.3	7.4	5.3
The average monthly number of employees:
Management - Company	8	8	8	8
Administration - Company	52	49	52	49
Operations - Hello Student Management Limited	-	-	280	238
	60	57	340	295

	Group
Directors' remuneration	Year ended 31 December 2022 £'m	Year ended 31 December 2021 £'m
Salaries and fees	1.1	1.0
Pension costs	0.1	0.1
Cash bonus	0.3	0.1
Share-based payments	0.6	0.2
	2.1	1.4

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 31 December 2022 £'m	Year ended 31 December 2021 £'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	67.7	29.2
Profit before tax multiplied by the rate of corporation tax in the UK of 19% (2021: 19%)	12.9	5.5
Exempt property rental profits in the year	(6.4)	(4.1)
Exempt property revaluations in the year	(8.7)	(3.3)
Effects of:
Non-allowable expenses	0.2	0.1
Capital allowances	-	(1.1)
Gain on disposal not taxable	-	0.3
Unutilised current year tax losses	2.0	2.6
Total current income tax charge in the income statement	-	-

No deferred tax asset has been recognised in respect of gross tax losses of £34.5 million (2021: £20.6 million), accelerated capital allowances of £2.7 million (2021: £2.5 million) and share based payments of £1.5m (of which £901k relates to the profit and loss account and £619k relates to equity) (2021: £0.6 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 £9.7 million (2021: £5.2 million) has not been recognised in respect of such timing differences.

The current tax rate used for the year is 19% based on rates already enacted in previous periods. An increase in the UK corporation rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. By virtue of the company's status as a UK REIT, this should not materially increase the company's future current tax charge. . The deferred tax at 31 December 2022 has been calculated based on these rates, reflecting the expected timing of reversal of the related temporary 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 earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share 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 calculation of each of the measures set out below:

	Calculation of basic EPS £ m	Calculation of diluted EPS £ m	Calculation of EPRA basic EPS £ m	Calculation of EPRA diluted EPS £ m
Year to 31 December 2022
Earnings per IFRS statement of comprehensive income	67.7	67.7	67.7	67.7
Adjustments to remove:
Changes in fair value of investment properties (Note 11)	-	-	(45.6)	(45.6)
Gain on disposal of investment property	-	-	(1.5)	(1.5)
Earnings	67.7	67.7	20.6	20.6
Weighted average number of shares (m)	603.3	603.3	603.3	603.3
Adjustment for employee share options (m)	-	3.9	-	3.9
Total number shares (m)	603.3	607.2	603.3	607.2
Earnings per share (pence)	11.2	11.1	3.4	3.4
Year to 31 December 2021
Earnings per IFRS statement of comprehensive income	29.2	29.2	29.2	29.2
Adjustments to remove:
Gain/loss on disposal of investment property	-	-	(1.7)	(1.7)
Changes in fair value of investment properties (Note 11)	-	-	(17.6)	(17.6)
Earnings	29.2	29.2	9.9	9.9
Weighted average number of shares (m)	603.2	603.2	603.2	603.2
Adjustment for employee share options (m)	-	0.3	-	0.3
Total number shares (m)	603.2	603.5	603.2	603.5
Earnings per share (pence)	4.8	4.8	1.6	1.6

9. NET ASSET VALUE PER SHARE

The principles of the three EPRA measures are set out below:

EPRA Net Reinstatement Value: Assumes that entities never sell assets and aims to represent the value required to reinstate entity assets.

EPRA Net Tangible Assets: Assumes that entities buy and sell assets, which crystalises unavoidable deferred tax.

EPRA Net Disposal Value: 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 primary NAV measure.

A reconciliation of the three EPRA NAV metrics from IFRS NAV is shown in the table below.


	NAV	EPRA NAV measures
		EPRA	EPRA	EPRA
Year ended 31 December 2022	IFRS £ m	NTA £ m	NRV £ m	NDV £ m
Net assets per Statement of Financial Position	700.8	700.8	700.8	700.8
Adjustments
Fair value of fixed rate debt	-	-	-	15.3
Purchaser's costs¹	-	-	38.5	-
Net assets used in per share calculation	700.8	700.8	739.3	716.1
Number of shares in issue
Issued share capital (m)	603.4	603.4	603.4	603.4
Issued share capital plus employee options (m)	607.2	607.2	607.2	607.2
Net Asset Value per share
Basic Net Asset Value per share (pence)	116.1
Diluted Net Asset Value per share (pence)	115.4	115.4	121.8	117.9

	NAV	EPRA NAV measures
Year ended 31 December 2021	IFRS £ m	EPRA NTA £ m	EPRA NRV £ m	EPRA NDV £ m
Net assets per Statement of Financial Position	647.6	647.6	647.6	647.6
Adjustments
Fair value of fixed rate debt	-	-	-	(14.3)
Purchaser's costs¹	-	-	34.2	-
Net assets used in per share calculation	647.6	647.6	681.8	633.3
Number of shares in issue
Issued share capital (m)	603.2	603.2	603.2	603.2
Issued share capital plus employee options (m)	606.6	606.6	606.6	606.6
Net Asset Value per share	£	£	£	£
Basic Net Asset Value per share (pence)	107.4
Diluted Net Asset Value per share (pence)	106.7	106.7	112.4	104.4

¹ 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 31 December 2022 £ m	Year ended 31 December 2021 £ m
Interim dividend of 2.50 pence per ordinary share in respect of the quarter ended 30 September 2021	-	15.1
Interim dividend of 0.625 pence per ordinary share in respect of the quarter ended 31 December 2021	3.8
Interim dividend of 0.625 pence per ordinary share in respect of the quarter ended 31 March 2022	3.8	-
Interim dividend of 0.625 pence per ordinary share in respect of the quarter ended 30 June 2022	3.8	-
Interim dividend of 0.625 pence per ordinary share in respect of the quarter ended 30 September 2022	3.8	-
	15.2	15.1

As at 31 December 2022 there was no accrual relating to withholding tax on the 2022 dividend (2021: £1.5 million). On 16 March 2023 the Company declared a dividend of 0.875 pence per share to be paid on 14 April 2023.

11. INVESTMENT PROPERTY

Year ended 31 December 2022	Group
Year ended 31 December 2022	Investment properties freehold £ m	Investment properties long leasehold £ m	Total operational assets £ m	Properties under development £ m	Total investment property £ m
As at 1 January 2022	835.5	131.7	967.2	28.7	995.9
Capital expenditure	12.9	2.3	15.2	15.2	30.4
Property acquisitions	19.3	-	19.3	-	19.3
Reclassification	(8.6)	8.6	-	-	-
Transfer of completed developments	52.9	-	52.9	(52.9)	-
Sale of investment property	(11.8)	-	(11.8)	-	(11.8)
Transfer to held for sale asset	(13.7)	-	(13.7)	-	(13.7)
Change in fair value during the year	33.9	(0.6)	33.3	12.3	45.6
As at 31 December 2022	920.4	142.0	1,062.4	3.3	1,065.7

	Group
Year ended 31 December 2021	Investment properties freehold £ m	Investment properties long leasehold £ m	Total operational assets £ m	Properties under development £ m	Total investment property £ m
As at 1 January 2021	849.2	132.1	981.3	23.8	1,005.1
Capital expenditure	6.2	1.8	8.0	7.4	15.4
Sale of investment property	(16.3)	-	(16.3)	-	(16.3)
Transfer to held for sale asset	(25.9)	-	(25.9)	-	(25.9)
Change in fair value during the year	22.3	(2.2)	20.1	(2.5)	17.6
As at 31 December 2021	835.5	131.7	967.2	28.7	995.9

During the year £15.2 million (31 December 2021: £8.0 million) of additions related to capital expenditure were recognised in the carrying value of the operational portfolio.

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 2022, 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 table below reconciles between the fair value of the investment property per the Consolidated Group 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
	2022	2021
	£ m	£ m
Value per independent valuation report	1,078.9	1,021.3
Add: Head lease	0.5	0.5
Deduct: Assets held for sale	(13.7)	(25.9)
Fair value per Group Statement of Financial Position	1,065.7	995.9

Fair Value Hierarchy

The following table provides the fair value measurement hierarchy for investment property:

		Quoted
		prices	Significant	Significant
		inputs	observable	unobservable
		markets	inputs	inputs
	Total	(Level 1)	(Level 2)	(Level 3)
Date of valuation 31 December 2022	£ m	£ m	£ m	£ m
Assets measured at fair value:
Student properties	1,046.5	-	-	1,046.5
Commercial properties	19.2	-	-	19.2
As at 31 December 2022	1,065.7	-	-	1,065.7

		Quoted prices	Significant	Significant
		in active	observable	unobservable
		markets	inputs	inputs
	Total	(Level 1)	(Level 2)	(Level 3)
Date of valuation 31 December 2021	£ m	£ m	£ m	£ m
Assets measured at fair value:
Student properties	976.9	-	-	976.9
Commercial properties	19.0	-	-	19.0
As at 31 December 2021	995.9	-	-	995.9

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 techniques for student properties 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 £91 per week-£461 per week with a weighted average weekly rent of £184 (31 December 2021: £85-£387 per week, weighted average £179).

(b) Unobservable input: Rental growth

The estimated average increase in rent based on both market estimations and contractual arrangements. Assumed rental growth of 5.22% used in valuations (31 December 2021: decline of 1.56%).

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: 4.50%-8.65%, with a weighted average of 5.2% (31 December 2021: 4.25%-8.15%, weighted average 5.3%).

(d) Unobservable input: Physical condition of the property

At the interim we indicated we would spend £37 million on health and safety works over the next five years. CBREs assumption is that £24.4 million of this cost should now be reflected in the valuation at the year end in respect of work on external wall systems and fire stopping on buildings over 11 metres.

(e) Unobservable input: Planning consent

The development site at FISC, Canterbury is pending planning consent for phase 2. CBRE have determined the fair value as the sales price for a development in progress including a profit margin, discount and risk factors to complete the project.

(f) 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.

	15% increase	-3% change	+3% change	-0.25%	+0.25%
	in cost of EWS	in rental	in rental	change	change
	works	income	income	in yield	in yield
As at 31 December 2022	£ m	£ m	£ m	£ m	£ m
(Decrease)/increase in the fair value of the investment properties	(3.4)	(43.3)	45.6	54.3	(47.2)

	15% increase	-3% change	+3% change	-0.25%	+0.25%
	in cost of EWS	in rental	in rental	change	change
	Works	income	income	in yield	in yield
As at 31 December 2021	£m	£ m	£ m	£ m	£ m
(Decrease)/increase in the fair value of the investment properties	(2.4)	(41.5)	40.7	48.5	(44.9)

(g) The key assumptions for the commercial properties are net initial yield, current rent and rental growth. A movement of 3% in passing rent and 0.25% in the net initial yield will not have a material impact on the financial statements.

12. INTANGIBLE ASSETS

	Group			Company
Year ended 31 December 2022	Hello Student^® website development £'m	NAVision development £'m	Total £'m	NAVision development £'m	Total £'m
Costs
As at 1 January 2022	0.9	2.2	3.1	2.2	2.2
Additions	-	0.8	0.8	0.8	0.8
As at 31 December 2022	0.9	3.0	3.9	3.0	3.0
Amortisation
As at 1 January 2022	0.9	0.9	1.8	0.9	0.9
Charge for the year	-	0.2	0.2	0.2	0.2
As at 31 December 2022	0.9	1.1	2.0	1.1	1.1
Net book value
As at 31 December 2022	-	1.9	1.9	1.9	1.9

		Group			Company
Year ended 31 December 2021	Hello Student^® website development £ m		NAVision development £ m	Total £ m	NAVision¹ development £ m	Total £ m
Costs
As at 1 January 2021	0.9		1.6	2.5	1.6	1.6
Additions	-		0.6	0.6	0.6	0.6
As at 31 December 2021	0.9		2.2	3.1	2.2	2.2
Amortisation
As at 1 January 2021	0.8		0.7	1.5	0.7	0.7
Charge for the year	0.1		0.2	0.3	0.2	0.2
As at 31 December 2021	0.9		0.9	1.8	0.9	0.9
Net book value
As at 31 December 2021	-		1.3	1.3	1.3	1.3

13. PROPERTY, PLANT AND EQUIPMENT

	Group			Company
Year ended 31 December 2022	Fixtures and fittings £'m	Computer equipment £'m	Total £'m	Fixtures and fittings £'m	Computer equipment £'m	Total £'m
Costs
As at 1 January 2022	0.9	0.4	1.3	0.9	0.2	1.1
Additions	0.8	0.2	1.0	0.8	0.1	0.9
As at 31 December 2022	1.7	0.6	2.3	1.7	0.3	2.0
Depreciation
As at 1 January 2022	0.6	0.3	0.9	0.6	0.2	0.8
Charge for the year	0.2	0.1	0.3	0.2	-	0.2
As at 31 December 2022	0.8	0.4	1.2	0.8	0.2	1.0
Net book value
As at 31 December 2022	0.9	0.2	1.1	0.9	0.1	1.0

	Group			Company
Year ended 31 December 2021	Fixtures and fittings £'m	Computer equipment £'m	Total £'m	Fixtures and fittings £'m	Computer equipment £'m	Total £'m
Costs
As at 1 January 2021	0.5	0.3	0.8	0.5	0.2	0.7
Additions	0.4	0.1	0.5	0.4	-	0.4
As at 31 December 2021	0.9	0.4	1.3	0.9	0.2	1.1
Depreciation
As at 1 January 2021	0.5	0.2	0.7	0.5	0.2	0.7
Charge for the year	0.1	0.1	0.2	0.1	-	0.1
As at 31 December 2021	0.6	0.3	0.9	0.6	0.2	0.8
Net book value
As at 31 December 2021	0.3	0.1	0.4	0.3	-	0.3

14. TRADE AND OTHER RECEIVABLES

	Group		Company
	31 December	31 December	31 December	31 December
	2022	2021	2022	2021
	£ m	£ m	£ m	£ m
Trade receivables	1.4	2.5	-	-
Other receivables	2.2	1.8	0.1	0.1
Prepayments	3.2	2.9	0.1	0.2
VAT recoverable	0.2	0.6	0.1	-
	7.0	7.8	0.3	0.3
Amounts due from Group undertakings	-	-	400.5	369.0
	7.0	7.8	400.8	369.3

In the Company, amounts owed from Group undertakings are classified as due within one year due to their legal agreements with the debtor, however, could be recovered after more than one year should the debtors' circumstance not permit repayment on demand.

Movements on the Group provision for impairment of trade receivables were as follows:

	Group
	31 December	31 December
	2022	2021
	£ m	£ m
At 1 January	(1.5)	(1.4)
Increase in provision for receivables impairment	(0.4)	(0.1)
At 31 December	(1.9)	(1.5)

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 large, unrelated and living with us. As such we have regular communication with them.

At 31 December 2022, there were no material trade receivables overdue at the year end, 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 (2021: £nil). There are no security obligations related to these amounts due from Group undertakings.

15. HELD FOR SALE ASSETS

Management considers that one property (2021: five properties) meets the conditions relating to assets held for sale under IFRS 5: Non-current Assets Held for Sale. Contracts were exchanged for the sale of the Emily Davies property in Southampton for £13.9 million in December 2022. Completion is expected within the first half of 2023, subject to satisfactory completion of works relating to fire doors. The fair value of this property in these financial statements is £13.7 million (2021: £25.9 million).

All Non-current Assets Held for Sale fall within 'Level 3' as defined by IFRS. There has 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
	2022	2021	2022	2021
	£ m	£ m	£ m	£ m
Cash and cash equivalents	55.8	37.1	4.3	2.0

17. TRADE AND OTHER PAYABLES

	Group		Company
	31 December	31 December	31 December	31 December
	2022	2021	2022	2021
	£ m	£ m	£ m	£ m
Trade payables	1.9	5.1	0.6	3.3
Other payables	5.4	2.1	0.3	0.2
Accruals	17.5	12.8	2.2	1.6
	24.8	20.0	3.1	5.1
Amounts owed to Group undertakings	-	-	87.8	27.2
	24.8	20.0	90.9	32.3

At 31 December 2022, there was deferred rental income of £33.1 million (2021: £29.9 million) which was rental income that had been charged that relates to future periods.

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.

18. BANK BORROWINGS

A summary of the drawn and undrawn bank borrowings in the year is shown below:

	Group
	Bank	Bank		Bank	Bank
	borrowings	borrowings		borrowings	borrowings
	drawn	undrawn	Total	drawn	undrawn	Total
	31 December	31 December	31 December	31 December	31 December	31 December
	2022	2022	2022	2021	2021	2021
	£ m	£ m	£ m	£ m	£ m	£ m
At 1 January	375.0	67.5	442.5	390.0	52.5	442.5
Bank borrowings drawn in the year	36.2	(36.2)	-	-	-	-
Bank borrowings repaid or cancelled during the year	(20.0)	(11.3)	(31.3)	(15.0)	15.0	-
At 31 December	391.2	20.0	411.2	375.0	67.5	442.5

There is an undrawn RCF debt facility available of £20 million at 31 December 2022 (2021: £45 million). The weighted average term to maturity of the Group's debt as at the year end is 4.8 years (2021: 4.9 years). The Company repaid a separate facility of £20 million prior to the year end (31 December 2021 balance: £19.9 million). See note 26 for details of a related refinancing post year end.

Bank borrowings are secured by charges over individual investment properties held by certain asset-holding subsidiaries. These assets have a fair value of £1,042.9 million at 31 December 2022 (2021: £977.1 million). In some cases, the lenders also hold charges over the shares of the subsidiaries and the intermediary holding companies of those subsidiaries.

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
	31 December	31 December
	2022	2021
Non-current	£ m	£ m
Balance brought forward	330.0	390.0
Total bank borrowings in the year	36.2	-
Bank borrowings becoming non-current in the year	45.0	-
Less: Bank borrowings becoming current in the year	-	(45.0)
Less: Bank borrowings repaid during the year	(20.0)	(15.0)
Bank borrowings drawn: due in more than one year	391.2	330.0
Less: Unamortised costs	(4.7)	(3.8)
Bank borrowings due in more than one year	386.5	326.2

	Group
	31 December	31 December
	2022	2021
Current	£ m	£ m
Balance brought forward	45.0	-
Total bank borrowings in the year	-	-
Less: Bank borrowings becoming non-current in the year	(45.0)	-
Bank borrowings becoming current in the year	-	45.0
Bank borrowings drawn: due in less than one year	-	45.0
Less: Unamortised costs	-	(0.3)
Bank borrowings due in less than one year	-	44.7

Maturity of Bank Borrowings

	Group
	31 December	31 December
	2022	2021
	£ m	£ m
Repayable in less than one year	-	45.0
Repayable between one and two years	64.0	20.0
Repayable between two and five years	70.0	52.8
Repayable in over five years	257.2	257.2
Bank borrowings	391.2	375.0

Each of the Group's facilities has an interest charge which is payable quarterly. Three of the facilities have an interest charge that is based on a margin above SONIA whilst other facilities interest charges are fixed at 4.0%, 3.5%, 3.2%, 3.6% and 3.2%. The weighted average rate payable by the Group on its debt portfolio as at the year end was 4.0% (2021: 3.0%).

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
	2022	2021
	£ m	£ m
Carrying value of fixed rate borrowings	277.2	277.2
Fair value adjustment	(15.3)	14.3
Fair value of fixed rate borrowings	261.9	291.5

The Group has bank loans with a total carrying value of £391.2 million, including the carrying value of fixed rate borrowings of £277.2 million. The fair value equivalent at the reporting date of the fixed rate debt was £261.9 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 £1.3 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 £1.3 million.

19. SHARE CAPITAL

	Group and Company		Group and Company
	31 December	31 December	31 December	31 December
	2022	2022	2021	2021
	Number	£ m	Number	£ m
Balance brought forward	603,203,052	6.0	603,160,940	6.0
Share options exercised (including dividend equivalence)	148,828	-	42,112	-
Balance carried forward	603,351,880	6.0	603,203,052	6.0

During the year there were two issues of 56,810 and 92,018 shares on 10 July and 17 August 2022 respectively. These related to exercise of options under the deferred bonus scheme and save as you earn share plans.

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
	2022	2021
	£ m	£ m
Balance brought forward	0.3	0.3
Balance carried forward	0.3	0.3

21. CAPITAL REDUCTION RESERVE

	Group and Company
	31 December	31 December
	2022	2021
	£ m	£ m
Balance brought forward	459.9	475.0
Less interim dividends declared and paid per Note 10	(15.2)	(15.1)
Balance carried forward	444.7	459.9

The capital reduction reserve account is a distributable reserve.

Refer to Note 10 for details of the declaration of dividends to shareholders.

22. LEASING AGREEMENTS

Future total minimum lease receivables under non-cancellable operating leases on investment properties are as follows:

	Group
	31 December	31 December
	2022	2021
	£ m	£ m
Less than one year	56.2	42.9
Between one and two years	1.5	1.4
Between two and three years	1.4	1.4
Between three and four years	1.3	1.3
Between four and five years	1.1	1.3
More than five years	6.0	7.8
Total	67.5	56.1

The above relates to assured shorthold tenancies (AST's) and commercial leases in place as at 31 December 2022. The impact of student leases for the forthcoming academic year signed by 31 December 2022 have not been included as the certainty of income does not arise until the tenant takes occupation of the accommodation. As at 31 December 2022, £31.1 million (31 December 2021: £32.0 million) of the future minimum lease receivables have been received as cash.

23. CONTINGENT LIABILITIES

There were no contingent liabilities at 31 December 2022 (31 December 2021: £nil).

24. CAPITAL COMMITMENTS

The Group was contractually committed to expenditure of £2.3 million at 31 December 2022 (31 December 2021: £8.6 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

On 10 July 2022 56,810 shares were issued to a former Director and certain employees under the Save As You Earn scheme.

On 17 August 2022 92,018 shares were issued to Lynne Fennah, a Director, upon her exercise of options under the Deferred Bonus Scheme.

Share-based Payments

On 24 March 2022, the Company granted nil-cost options over a total of 1,292,559 (Duncan Garrood 721,898 and Lynne Fennah 570,661) ordinary shares pursuant to the Empiric Long Term Incentive Plan for the 2021 financial year. Following Lynne Fennah's resignation, 554,784 of her awards lapsed and the 15,877 awards relating to the deferred bonus element remained.

Details of the Director share ownership and dividends received are included int the Directors' Remuneration Report.

Details of the shares granted and exercised are outlined in Note 27.

26. SUBSEQUENT EVENTS

On 31 January 2023, contracts were exchange for the sale of Bede Park (Leicester) for £2.6 million. Completion occurred on 14 February 2023.

The renewal of a £20.0 million flexible unsecured loan facility with First Commercial Bank completed on 3 February 2023.

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.

During the year, the Company granted nil-cost options over a total of 599,281 ordinary shares to members of the Senior Leadership Team ("SLT") pursuant to the Empiric Long Term Incentive Plan for the 2021 financial year. Following resignation of two of the SLT members, 188,292 of these options also lapsed during the year.

During the year, the Company granted options over a total of 213,655 ordinary shares in relation to the Save As You Earn scheme at an exercise price of £0.75. The earliest date on which the options will become exercisable is 1 July 2025.

Of the nil-cost options, 168,389 are currently exercisable. The weighted average remaining contractual life of these options was 2.0 years (2021: 1.7 years).

During the year to 31 December 2022 the amount recognised relating to the options was £0.7 million (2021: £0.2 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.

	31/12/2022	31/12/2021	31/12/2020	31/12/2019	31/12/2018	31/12/2017
Outstanding number brought forward	3,446,320	2,314,539	1,250,045	1,051,708	1,477,817	3,913,420
Granted during the period	2,430,279	1,725,577	1,064,494	604,134	439,022	207,198
Vested and exercised during the period	(127,492)	(35,779)	-	(129,253)	(139,325)	(691,237)
Lapsed during the period	(1,992,233)	(558,017)	-	(276,544)	(725,806)	(1,951,564)
Outstanding number carried forward	3,756,874	3,446,320	2,314,539	1,250,045	1,051,708	1,477,817

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 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 of	£0.88	£0.88	£0.88	£0.85
(b)	Exercise price of	£nil	£nil	£nil	£0.75
(c)	Vesting period	3 years	3 years	3 years	3 years
(d)	Expected volatility of	N/A	30.0%	N/A	28.5%
(e)	Expected dividend yield of	N/A	3.5%	2.8%	4.4%
(f)	Risk-free rate of	N/A	1.4%	1.4%	1.6%
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
	2022	2021
	£ m	£ m
Bank borrowings and leasehold liability at start of the year	372.0	385.3
Cash flows from financing activities
Bank borrowings drawn	36.2	-
Bank borrowings repaid	(20.0)	(15.0)
Lease liability paid	(0.2)
Loan arrangement fees paid	(1.6)	(0.2)
Non-cash movements
Amortisation of loan arrangement fees	1.0	0.8
Recognition of lease liabilities	0.4	1.1
Bank borrowings and leasehold liability at end of the year	387.8	372.0

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 Group 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
AIB Group	A3	Stable
Canada Life	Aa3	Stable
Mass Mutual	A2	Stable
Scottish Widows	A2	Stable
Lloyds Bank Plc	A1	Stable
Natwest	A3	Stable

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 groups covenants are currently compliant and we envisage compliance to continue to be achieved in a reasonably severe downside scenario. The Group's portfolio could currently withstand a 25 per 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 2.0 times, whereas gross profit is currently in excess of 3.0 times total finance costs, providing a good degree of comfort.

The following table sets out the contractual obligations (representing undiscounted contractual cash flows) of financial liabilities:

	Group
		Less than 3	3 to 12	1 to 5
	On demand	months	months	years	> 5 years	Total
	£ m	£ m	£ m	£ m	£ m	£ m
At 31 December 2022
Bank borrowings and interest	-	3.9	11.7	178.3	266.4	460.3
Trade and other payables	-	24.8	-	-	-	24.8
	-	28.7	11.7	178.3	266.4	485.1

	Group
		Less than 3	3 to 12	1 to 5
	On demand	months	months	years	> 5 years	Total
	£ m	£ m	£ m	£ m	£ m	£ m
At 31 December 2021
Bank borrowings and interest	-	3.2	54.4	194.2	189.1	440.9
Trade and other payables	-	20.0	-	-	-	20.0
	-	23.2	54.4	194.2	189.1	460.9

	Company
		Less than 3	3 to 12	1 to 5
	On demand	months	months	years	> 5 years	Total
	£ m	£ m	£ m	£ m	£ m	£ m
At 31 December 2022
Bank borrowings and interest	-	-	-	-	-	-
Trade and other payables	-	3.1	-	-	-	3.1
	-	3.1	-	-	-	3.1

	Company
		Less than 3	3 to 12	1 to 5
	On demand	months	months	years	> 5 years	Total
	£ m	£ m	£ m	£ m	£ m	£ m
At 31 December 2021
Bank borrowings and interest	-	0.1	0.4	20.1	-	20.6
Trade and other payables	-	5.0	-	-	-	5.0
	-	5.1	0.4	20.1	-	25.6

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

Those entities listed below are considered subsidiaries of the Company at 31 December 2022, 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
	2022	2021
	£'m	£'m
As at 1 January	187.6	187.6
Additions in the year	41.4	-
Disposals	(6.4)	-
Balance at 31 December	222.6	187.6

During the current and prior year there were a number of subsidiaries which moved within the Group, due to reorganisations relating to debt structures; these were all non - cash movements whereby the parent company forgave intercompany debt owned by subsidiaries in return for the issue of further shares.

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 St Mary's) Leasing Limited	Active	100%	Property Leasing
Empiric (Bristol St Mary's) Limited	Active	100%	Property Investment
Empiric (Bristol) Leasing Limited	Dormant	100%	Property Leasing
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	Active	100%	Development Management
Empiric (Durham St Margarets) Limited	Active	100%	Property Investment
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) Leasing Limited	Dormant	100%	Property Leasing
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 Isca Lofts) 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 Square) Leasing Limited	Dormant	100%	Property Leasing
Empiric (Glasgow George Square) Limited	Dormant	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) Leasing Limited	Dormant	100%	Property Leasing
Empiric (Huddersfield Oldgate House) Limited	Active	100%	Property Investment
Empiric (Huddersfield Snow Island) Leasing Limited	Active	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 Mary Morris) Limited	Dormant	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 (Leicester West Walk) Limited	Dormant	100%	Property Investment
Empiric (Liverpool Art School/Maple House) Limited	Active	100%	Property Investment
Empiric (Liverpool Chatham Lodge) 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 Francis Gardner) Limited	Active	100%	Property Investment
Empiric (London Road) Limited	Active	100%	Property Investment
Empiric (Manchester Ladybarn) 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) Leasing Limited	Dormant	100%	Property Leasing
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 (Stirling Forthside) Leasing Limited	Dormant	100%	Property Leasing
Empiric (Stirling Forthside) Limited	Dormant	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	Active	100%	Immediate Holding Company
Empiric Investment Holdings (Two) Limited	Active	100%	Holding Company
Empiric Investment Holdings (Three) Limited	Active	100%	Holding Company
Empiric Investment Holdings (Four) Limited	Active	100%	Holding Company
Empiric Investment Holdings (Five) Limited	Active	100%	Holding Company
Empiric Investment Holdings (Six) Limited	Active	100%	Holding Company
Empiric Investment Holdings (Seven) Limited	Active	100%	Holding Company
Empiric Investments (One) Limited	Dormant	100%	Immediate Holding Company
Empiric Investments (Two) Limited	Active	100%	Immediate Holding Company
Empiric Investments (Three) Limited	Active	100%	Immediate Holding Company
Empiric Investments (Four) Limited	Active	100%	Immediate Holding Company
Empiric Investments (Five) Limited	Active	100%	Immediate Holding Company
Empiric Investments (Six) Limited	Active	100%	Immediate Holding Company
Empiric Investments (Seven) Limited	Active	100%	Immediate Holding Company
Hello Student® Management Limited	Active	100%	Property Management

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
	31 December	31 December
	2022	2021
Gross Margin	£ m	£ m
Revenue	73.0	56.0
Property Expenses	(24.0)	(23.1)
Gross profit	49.0	32.9
Gross Margin calculated as Gross profit/Revenue	67.1%	58.8%

Total Return ("TR") - 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
	31 December	31 December
	2022 ⁽¹⁾	2021
Total Return	£ m	£ m
EPRA NTA per share at start of year	106.7	105.0
EPRA NTA per share at end of year	115.4	107.4
NTA growth per share in period	8.7	2.4
Dividend per share	2.5	2.5
Dividends plus growth in NTA	11.2	4.9
Total return calculated as Dividends plus EPRA NTA Growth in year per share/ NTA at start of year	10.5%	4.6%

^{(1) EPRA NTA per share calculated on a fully dilutive basis, in line with EPRA guidance.}

Property Loan-to-value ("LTV") - A measure of gearing. A business KPI monitored to ensure the group remains in line with our long-term target of < 35 per cent.

	Group
	31 December	31 December
	2022	2021
Property Loan to value ("LTV")	£ m	£ m
Bank borrowings drawn	391.2	375.0
Less cash held at the year end	(55.8)	(37.1)
Net borrowings	335.4	337.9
Property valuation	1,078.9	1,021.3
Property LTV calculated as net borrowings / property valuation	31.1%	33.1%

Dividend cover - a measure of EPRA earnings relative to dividends declared for the year. This was 124 per cent for the year (2021: 64 per cent).

Dividend pay out ratio - a measure of dividends relative to EPRA earnings. This was 81 per cent for the year (2021: 156 per cent).

FIVE YEAR HISTORICAL RECORD

	31 December 2022 £ m	31 December 2021 £ m	31 December 2020 £ m	31 December 2019 £ m	31 December 2018 £ m
Revenue	73.0	56.0	59.4	70.9	64.2
Direct costs	(24.0)	(23.1)	(22.7)	(23.4)	(24.5)
Gross profit	49.0	32.9	36.7	47.5	39.7
Gross margin	67.1%	58.8%	61.8%	67.0%	61.8%

Administrative expenses	(13.4)	(10.6)	(9.8)	(9.2)	(9.1)
Operating profit	35.6	22.3	26.9	38.3	30.6
Property revaluation	45.6	17.6	(37.6)	29.2	22.4
Finance costs	(15.0)	(12.4)	(13.3)	(12.7)	(12.7)
Gain or loss on disposals	1.5	1.7	-	-	-
Net profit	67.7	29.2	(24.0)	54.8	40.3

EPRA EPS (pence)	3.41	1.65	2.26	4.22	2.97

Portfolio valuation	1,065.7	995.9	1,005.1	1,029.1	971.0
Borrowings	(386.5)	(371.0)	(385.3)	(349.8)	(324.3)
Other net assets/liabilities	21.6	22.7	13.5	(14.5)	(6.8)
Net assets	700.8	647.6	633.3	664.8	639.9

EPRA NTA	700.8	647.6	633.3	664.8	639.9
EPRA NTA per share	115.4	106.8	104.6	110.0	106.0

Share in issue	603,351,880	603,203,052	603,160,940	603,160,940	602,887,740
Weighted average cost of debt	4.0%	3.0%	2.9%	3.2%	3.3%
Weighted average debt maturity	4.7 years	4.9 years	5.9 years	6.6 years	7.6 years
Property LTV	31.1%	33.1%	35.4%	32.9%	30.6%

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 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 EPS - EPRA Earnings divided by the weighted average number of ordinary shares.

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 - Homes of multiple occupants.

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.

Property loan-to-value or LTV - Borrowings net of cash, as a percentage of portfolio valuation.

Net Asset Value or NAV - Net Asset Value is the net assets in the Statement of Financial Position.

PBSA - Purpose Built Student Accommodation.

Post-Grad - Post-graduate 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.

Company Information and Corporate Advisers

Empiric Student Property plc

1st Floor Hop Yard Studios

72 Borough High Street

London

SE1 1XF

T +44 (0)20 3828 8700

E info@empiric.co.uk

More information on

www.empiric.co.uk

Company Registration Number: 08886906

Incorporated in the UK

(Registered in England)

Empiric Student Property plc is a public company limited by shares

Registered Office

1st Floor Hop Yard Studios,

72 Borough High Street,

London, SE1 1XF

DIRECTORS AND ADVISERS

Directors

Mark Pain (Chairman)

Duncan Garrood (Chief Executive Officer)

Donald Grant (Chief Financial and Sustainability Officer)

Alice Avis (Non-Executive Director, Senior Independent Director)

Martin Ratchford (Non-Executive Director)

Clair Preston-Beer (Non-Executive Director)

Broker and Joint Financial Adviser

Jefferies International Ltd

Vintners Place

68 Upper Thames Street

London EC4V 3BJ

Broker and Joint Financial Adviser

Peel Hunt LLP

7th Floor,

100 Liverpool St,

London

EC2M 2AT

Legal Adviser to the Company

Gowling WLG (UK) LLP

4 More London Riverside

London SE1 2AU

Company Secretary

Apex Secretaries LLP

6th Floor, Bastion House,

140 London Wall,

London,

United Kingdom,

EC2Y 5DN

Registrar

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

External Auditor

BDO LLP

55 Baker Street

London W1U 7EU

Communications Adviser

FTI Consulting LLP

200 Aldersgate

Aldersgate Street,

London,

EC1A 4H

Valuer

CBRE Limited

Henrietta House

Henrietta Place

London W1G 0NB

Tax adviser

KPMG

15 Canada Square

London

E14 5GL

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