Empiric Student Property Share Discussion Threads

[spectoacc] 15/2/2018 07:27

Not perfect, but a lot more positive than the share price was implying. Clearly still having problems with Cardiff & Aberdeen, but the increase in bookings is a big plus.

"Empiric Student Property plc
("Empiric" or the "Company" or, together with its subsidiaries, the "Group")
Property Valuation & Trading Update
Empiric Student Property plc (ticker: ESP), the owner and operator of student accommodation across the UK, announces that the Group's property portfolio was independently valued by CBRE Ltd as at 31 December 2017 and on a like-for-like basis is slightly ahead compared to 30 June 2017. The portfolio valuation was GBP890.1 million, representing an increase of 23.4% for the full year and 8.8% for H2 2017 and was based on current levels of occupancy and on an industry standard asset-by-asset basis.
The increase in valuation has been driven largely by acquisitions, with yield compression, development progress and rental growth also contributing to uplifts in the majority of Empiric's towns and cities, which are continuing to see strong demand. However, this increase in value has been partially offset by certain assets where Empiric has faced operational challenges as previously reported.
The Group continues to focus fully on driving revenue and reducing costs and can report recent progress in line with the guidance provided in the November 2017 Trading Update. Bookings for the 2018/19 academic year are at 40% which is significantly ahead of last year and administration costs for H2 2017 have been reduced by 21% from GBP7.6 million for H1 2017 to circa GBP6.0 million.
The results for the year ended 31 December 2017 will be published on Wednesday 21 March 2018 and will include a full update on the Company's performance and progress made on the initiatives outlined in the Business Review.

[chucko1] 14/2/2018 07:17

100% agree. (rare for me, I’m a difficult xxx)!

[hannath] 13/2/2018 14:53

Agree, it is a good investment at this level based on what we have been told ..... think the main problem here is lack of news ... now x2 months since the outing of Paul H ... an update cant come quick enough to stop the slide, replacement for PH, cost reductions, ex div date ..etc

[chucko1] 13/2/2018 14:33

Who cares about “the bottom”? This stock, if one wishes to hold it, would best be held for years as an income producer (if you believe in the business plan). The odd few pence should not be that metrical, certainly where we are now at a 20% or more discount to NAV.

[clausentum] 13/2/2018 13:53

I assume that interest rates will go up faster, but not higher, than previously expected, and all property prices might dip a little, but not much, when the interest rates are higher.
The share price is now less than the NAV, and at a buying price of 83p the 5p dividend for 2018 means a 6% yield. As long as the earnings more or less cover the dividend this should be a good enough return, with a reasonable possibility of a capital gain. But the share price just keeps creeping downwards,surely it should bottom soon!! Every time I think of topping up I decide to wait for another couple of days and the share price is lower.

[riskvsreward] 12/2/2018 18:35

This looks a much better investment. At about £45K a bed the return looks appealing,knowing from experience the rent alone can easily fetch > £500 a month for a bed.

The RNS didn't disclose the initial yield from the purchase though.

[chucko1] 12/2/2018 16:36

At about £45k per bed, it is certainly a statement of intent about continuing with the 2025 plan. One of the key takeaways from the Q4 fiasco was that you need scale in a smaller number of locations to get the costs in line with the stated dividend policy.

This is such a hated stock at the moment!!

[speedsgh] 12/2/2018 16:33

Take a tour of the Emily Davies Halls of Residence in Southampton which has been acquired by the company...

[killing_time] 12/2/2018 15:36

RNS out today.


Empiric acquires student accommodation property in Southampton: Emily Davies Hall

The Board of Empiric Student Property plc (ticker: ESP), the owner and operator of student accommodation across the UK, is pleased to announce that the Group has acquired the freehold of a 240 bed student accommodation property in Southampton, the Emily Davies Halls of Residence (the "Property"), for GBP10.6 million (excluding costs).

[spectoacc] 07/2/2018 13:50

Wonder if the next "news" will be how bookings have fared for the next academic year - should know well in advance.

[chucko1] 07/2/2018 13:15

Stick with it - you may one day be proud of your fortitude.

It’s really suffering and I suspect the main reason is that there is no reason for any rise to stick when facing a headwind as we saw with the recent overall market falls. Until there is both a new CEO and some better earnings, we will not move much higher, I think. But all we need to do is to be average as a 5p div. on an 84p price is a 6% running yield before anything else happens. There are worse fates.

[hannath] 07/2/2018 13:07

Lack of news after the action back in late 2017.

Last year we had ex div in January and paid in Feb !

New CEO ? ....

Think we are overdue an update of some kind

[andyj] 07/2/2018 12:57

Drip drip drip...one of the worst investments I've ever made.

[bscuit] 03/1/2018 21:25

Given feudal long-leasehold [more than 20 years] tenure were abolished in Scotland on 2000 and 2014 leaving only freehold and short lease tenure the use of the word feuhold demonstrates alack of engagement by ESP and the Nomad/Financial PR body with the need to accurately infom the market.

[jonwig] 03/1/2018 20:34

'Bearbull' in IC often has interesting things to say. On ESP last week:

So the odd things are not just that chief executive Paul Hadaway was sacked but, first, that his dismissal took a further three weeks to materialise and, second, that his temporary replacement, Tim Atlee, Empiric’s investment officer, is a business clone of Mr Hadaway; they are long-standing business partners who founded the property company from which Empiric emerged. One wonders, why should one be sacked and not the other?

[loglorry1] 22/12/2017 09:03

SteMiS I totally agree. Any buyout rumours will just be a short term bump and in any case a buyer will want a significant discount to NAV. Last thing holders here need is a firesale. Far better to sort out the business and get it firing on all cylinders. The business is not a complicated one and there are plenty of other companies executing well in it. They just need to copy them and steady the ship.

[stemis] 22/12/2017 08:55

I think (and hope) ESP are doing what they should be; sticking to the plan and sorting out the cost base and deploying their capital. If they do that successfully the share price will look after itself...

[killing_time] 22/12/2017 07:50

Nice balanced view on ESP chucko1.

Agree that there's no reason why this company cannot be turned around and made to work. In my view the hard works been done with the property bought and the rooms filled. Now its just the case of getting the costs under control and running the company.

[spectoacc] 22/12/2017 07:44

Yes - unclear where ESP add value here, but not enough detail to know. Feels a bit same-old.

[jonwig] 22/12/2017 07:34

The fact that the Uni will operate the building until 2020 probably suggests it will be full, and any unforseen costs will fall on them rather than the feuholder (a new word for me!) - but it would have been good to be told the initial yield.

[spectoacc] 22/12/2017 07:31

"ESP, the owner and operator of premium student accommodation across the UK, is pleased to announce that the Group has acquired the feuhold (the Scottish equivalent to a freehold) of a 64 unit student accommodation property in Edinburgh for GBP7.15 million (excluding costs)."

Anyone think the costs are another £7.15m? :) :)

[spectoacc] 22/12/2017 06:59

Thanks @chucko1.

[chucko1] 21/12/2017 21:45

I think that the £600mm represents the value of the company, bearing in mind that it has £820mm of assets and around £220mm of debt.

The CFO’s purchase of circa £45k of shares is most interesting, unless one believes that she is incompetent and has got the new plan/forecasts wrong! This would be a notable feat given what she had taken over.

But then the former CEO bought in at 106p just after the EPRA dividend revelation, so perhaps they have all been afflicted somehow. Actually, I don’t think so. On the earnings call, the former CEO was genuinely positive and backed that up with the 60,000 share purchase. My take on this is that he felt, and still feels that ESP is on a good path. I suspect that he is looking at it through the prism of property development and that he has created significant value. He failed to see it through a more comprehensive prism, that being one of sustainable and transparent cash flows. The dividend coverage misstatement turned out to be unsurvivable, ultimately, but it ought not to have been. This is a young enterprise where value has been lost through inefficiencies - you think this is the only one!!?? I suspect that opposite to this is the value creation via successful property development. You should look at the financial statements for both DIGS and Unite. Early years defined by poor dividend coverage, but overall shareholder value enhanced by increased property values. In the case of Unite, the shareholder returns average 12% per annum over 18 years, although in 1999, rates were much higher than today, so there has been a relative tailwind. But DIGS is also a young company with good returns so far, so it is unlikely, in my opinion, that the general business model cannot be made to work. It’s students filling rooms - it’s not advanced Kepler planetary motion.

Contrary to the bullish tone of the above, however, is the inescapable concern about the positive June trading statement followed by the July issue at 109p. This is the part that I deem unsurvivable given what must have been known, or ought to have been known at that time. After all, the former CFO did not leave for no good reason. But I think this is more a statement of the former CEO rather than the long term prospects of the company should it continue in its present form.

[killing_time] 21/12/2017 20:14

I know iv had a few drinks tonight but you cant have a sell value of £600m = 99p and a NAV of £820m =109p

If the NAV was £820m then the share price would be around 136p roughly.

Secondly the only NAV I can find is around the 104p mark so im not sure how this article with property week is coming up with £820m.

Really hope im wrong but I don't think iv had that much. KT.

[belgraviaboy] 21/12/2017 16:30

No sure it is a no brainer.

That NAV will not hold if it works out that the forecast levels of rents are not attainable.

Words have been spoken about cost control - but evidence needs to be seen in the financials to confirm. Until then, this is still a broken business model.

It could be there was no interest in the assets at 99p - in that case what is the true NAV?

Personally I have sold into this rally for the time being (thanks Sanata). I will only buy back at around 80p or when the management prove they are making it work.

And don't forget that divi is uncovered.

Good luck all.