Business and Trading Update

RNS Number : 3494M

Empiric Student Property PLC

23 May 2022

 

23 May 2022

Empiric Student Property plc

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

BUSINESS AND TRADING UPDATE

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

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

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

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

Improving rents and bookings

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

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

Enhancing our portfolio to drive shareholder value

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

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

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

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

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

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

Further enhancing our brand and customer experience

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

Investing in our people

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

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

Half year results

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

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

Empiric Student Property plc	(via Maitland/amo below)
Duncan Garrood (Chief Executive Officer)
Lynne Fennah (Chief Financial & Sustainability Officer)
Jefferies International Limited	020 7029 8000
Tom Yeadon Andrew Morris
RBC Europe Limited (trading as RBC Capital Markets)	020 7653 4000
Marcus Jackson Elliot Thomas
M aitland/amo (Communications Adviser)	07747 113 930 / 0207 379 5151
James Benjamin Alistair de Kare-Silver	[e-mail]

The Company's LEI is 213800FPF38IBPRFPU87.

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

Notes:

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

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

 

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