TIDMESP
RNS Number : 9802C
Empiric Student Property PLC
23 October 2020
23 October 2020
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 across the UK, today
provides a business and trading update.
All our buildings remain open, staffed, maintained and operating
strictly in line with Government guidance, providing Covid-secure
homes and critical services for our residents who are commencing
their 2020/21 academic year.
Most of our residents have now arrived and are settling into
their accommodation. We are continuing to work closely with
students, universities and wider stakeholders and in line with
Government guidance to ensure that our residents, colleagues,
business partners and the communities in which we operate remain
safe and secure.
Academic year 2020/21
Despite the challenging conditions, we have achieved a solid
performance with occupancy to date at 70% across our portfolio
(2019/20: 94%), bookings continue to be made, albeit at lower
levels, than in prior years.
Our like for like rental growth to date is 2.4% (2019/20: 3.1%
full year) as our direct let model continues to allow us to
dynamically adjust our rental contracts, which remains beneficial
in a competitive market.
Our 70% occupancy is net of cancellations and includes just
under 10% of occupancy from students still to check-in between now
and January 2021. We have a good level of visibility over these
bookings with students having re-confirmed their intention to
occupy the accommodation. Many of these later check-ins reflect our
flexible approach to delaying the start dates to tenancies for the
2020/21 academic year to align with changes in university term
start dates, and we are also offering semester lets, both of these
have been well received by customers and universities. We continue
to see a pipeline of additional bookings with a start date in
January 2021 onwards from both direct let customers as well as
universities, where several discussions are already underway.
The breakdown of our customers is normally a third from each of
the UK, China and other international combined. The academic year
2020/21 to date sees a slight increase in customers from the UK at
39%, with 29% from China and 32% other international combined.
Robust Financial Position
-- The Group has significant headroom and remains fully
compliant with its banking covenants, which we continue to
monitor.
-- The Group's loan to value ratio is 36.8% and based on drawn
facilities at 30 September 2020 and calculated on an average basis,
the Group's interest cover ratio ("ICR") covenant is 185% compared
to actual ICR of 349%.
-- Of our total drawn debt of GBP390 million, GBP277 million
(71%) is at fixed interest rates and GBP113 million (29%) is at
floating rates. The aggregate cost of debt is 2.9%, with a weighted
average term to maturity of 6 years.
-- We have no refinancing requirements until November 2022 and
GBP48 million of undrawn debt facilities and cash.
Update on dividends and the market
Despite the impact of Covid-19 the fundamentals of increasing
structural demand from both domestic and international students for
premium, responsibly managed student accommodation focused in high
demand UK towns and cities remains strong, whilst the supply of
such accommodation continues to be restricted.
Given current uncertainty and in light of the fact that the
check-in cycle has extended this year to January 2021, it is too
early to commit to the reinstatement of dividends. However, the
Board will continue to keep this under review and will provide an
update in Q1 2021.
Duncan Garrood, Chief Executive Officer of Empiric Student
Property plc, commented:
"Whilst we continue to weather the challenges that have arisen
as a result of Covid-19, we continue to trade profitably, and we
remain very confident about our long term future. The long-term
fundamentals supporting the student housing sector remain strong
and our smaller, more flexible buildings have adapted well to many
of the challenges posed by this pandemic. Our philosophy of "homes
not halls" has never been more compelling.
Having visited many of our assets over the last few weeks, I am
also hugely impressed by, and grateful to, the dedicated
operational teams who continue to work in challenging circumstances
to keep our buildings open and provide excellent services and
assistance to residents who need our support."
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 & Operating
Officer)
Jefferies International Limited Tel: 020 7029 8000
Stuart Klein
Tom Yeadon
RBC Europe Limited (trading as RBC Tel: 020 7653 4000
Capital Markets)
Charlie Foster
Marcus Jackson
Maitland/AMO (Communications Adviser) Tel: 07747 113 930
James Benjamin Email: empiric-maitland@maitland.co.uk
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(R) 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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