Empiric Student Property Share Discussion Threads

[jonwig] 18/3/2018 18:02

I hadn't realised that the Chairman who died last week was the same Brenda Dean who was leader of SOGAT, the printers' union when Rupert Murdoch did his famous midnight flit from Fleet Street to Wapping in the 1980s.

Here's an interesting obit:

[skinny] 14/3/2018 14:33

NOTICE OF FULL YEAR RESULTS

The Board of Empiric Student Property plc (ticker: ESP), the owner and operator of student accommodation across the UK, will announce its full year results for the 12 months ended 31 December 2017 on Wednesday, 21 March 2018.

[speedsgh] 07/3/2018 14:40

Can they be trusted to spend £100m wisely?! The jury is out on that one.

[stemis] 07/3/2018 14:10

These guys have probably still got a fire power of £100m they can spend on further properties (or developing existing ones).

[chucko1] 05/3/2018 15:48

It has a running yield of 6%. They have stated that the November plan is intact. Other REIT startups fail to cover their EPRA dividend for some years, although they do better than ESP has so far managed. But if ESP can actually keep to the plan, this goes higher.

If not, it gets bought because other student accommodation providers can make it work.

NAV confirmed at about 104p. In my opinion, this is critical. One cannot escape the fact, however, that every time there is a price break, it just gets slapped right down again. But I have seen other asset backed stocks trading at stupid low prices for many months against all logic. When they became “unhated”;, they flew. The brokers never saw it coming.

[spectoacc] 05/3/2018 13:44

@chucko1 - I rely on others to tell me what they've said I fear, I've no access to it myself. Interesting to see how they kicked it off with a d/g when they saw the extent of the costs/divi coming out of capital, and doubly interesting how with all the changes made, and the price fall, they've still stayed bearish (we all know what "Hold" means):

[chucko1] 05/3/2018 13:20

SpectoAcc - how do you get your hands on the Numis commentary?

[spectoacc] 05/3/2018 11:47

@steve3 - I'm not a fan of D Stevenson, nor indeed many of those paid to write share tips (had a run-in with him over B&B prefs many years ago).

Am decently long ESP but haven't added in a while - hoping for some sort of endgame involving sale/merger, but we'll see. It's "cheap" but of course, for a reason (poor execution of plan so far).

Numis are worth reading on it - still seemingly negative. They kicked off the fall.

[steve3sandal] 04/3/2018 08:28

SpectoAcc, ref your post 649, David Stevenson?, it is his article. Not sure what you meant, track record?, too adventurous? It got my interest yesterday...Bit behind with my reading, I don’t hold but thought to do more work on ESP, which includes visiting here. Tempted at the current prospective yield, LTV, cashed up, FD getting a grip, though some institutions may sell into any rise.

[chucko1] 26/2/2018 18:42

Yes, but to put it in perspective, that same disclaimer has appeared in all previous dividend announcements for Empiric. In addition, equivalent wording is used for just about all Investment Trust-like REITs of which I am aware.

[hannath] 26/2/2018 17:17

That's right it could be higher ;-)

[skinny] 26/2/2018 17:01

Don't forget the note:

Note:

(1) The target dividend is a target only and not a forecast. There can be no assurance that the target will be met and it should not be taken as an indication of the Company's expected or actual future results.

[speedsgh] 26/2/2018 16:20

Dividend Declaration -

The Board of Empiric Student Property plc (ticker: ESP), the owner and operator of student accommodation across the UK, has declared a dividend of 1.25 pence per Ordinary Share in respect of the quarter ended 31 December 2017, payable on 23 March 2018 to all Ordinary Shareholders on the register on 9 March 2018. The ex-dividend date will be 8 March 2018.

0.84 pence of this dividend will be paid as a Property Income Distribution ("PID") in respect of the Company's tax exempt property rental business and 0.41 pence will be paid as an Ordinary UK dividend ("non-PID").

The Board is targeting a dividend of 5 pence per share for the year to 31 December 2018.

[nimbo1] 26/2/2018 10:43

got some on friday, L2 looking very healthy for today (at the moment at least)

[bullsvbears] 23/2/2018 13:36

At least in the past they have paid pretty promptly after the announcement - unlike some....

[hannath] 23/2/2018 13:24

x2 previous years (not 2017) it went xd and paid during March ...so expecting that again, last years was paid early for some reason.

[bullsvbears] 23/2/2018 13:06

Meanwhile the latest quarterly divi announcement is running rather late. Maybe they will try to slip it into the next fiscal......??

[spectoacc] 23/2/2018 07:34

Thanks; nothing new but a good read (just hope it's not by David Stevenson!).

[hannath] 22/2/2018 18:14

In tomorrow’s Moneyweek

Tapping students for cash
This student-property fund shocked investors with a dividend cut last year, but its shares now look better value


EDINBURGH: A RESILIENT MARKET FOR THE LONG TERM
This week I have a contrarian idea for the more adventurous fund investor. Empiric Student Property (LSE: ESP) has fallen out of favour in recent months and its shares are trading at around 84p versus a net asset value (NAV – the value of the assets in the underlying portfolio minus its liabilities) of about 103p. This reflects a number of problems that emerged at the end of last year, which prompted the hiring of a new CEO and a big strategic review. However, I’ve been tracking this specialist fund for some time now, and have a sense that it might have turned a corner and be back on the straight and narrow.

Empiric is a classic example of looking in the wrong place for risk. Like many investors, I’ve been worried about a turning in the tide of foreign students filling up university accommodation. Higher-education funding is the subject of massive political debate and the prime minister is evidently vexed by the sheer number of foreign students coming into the UK. I’ve also been worried about the number of new operators entering the student-housing market. However, my worries about a competitive market and changing policy were misplaced. My real concern should have been how well Empiric could execute its business.

In retrospect, this should not have been a complete surprise. Unite, the dominant player in the student-housing market, also had a sticky patch a few years back as it built up its student-housing brand and made the switch from a pure development focus to an outfit more like a cash-flow-focused real-estate investment trust. The firm has since performed very well.

THE UNKINDEST CUT
Still, the news of Empiric’s setback was understandably not well received by investors. In particular, few income investors would have liked the dividend cut, which took the target payout down to 5p per share. The shares tumbled from around 113p in September – a substantial premium to NAV – to stand almost 25% lower at the time of writing.

The good news is that Empiric has reacted quickly to its problems. As well as replacing its CEO it has announced a number of measures to improve operational efficiencies and lower costs. However, this hasn’t stopped growing its pipeline of new units. Just a few weeks ago, the fund announced a new acquisition of a 240-bed student property in Southampton for £10.6m.

GCP Student Living, a rival student-property fund, has focused more on prime London properties, but I think I prefer the more provincial approach favoured by Empiric – as long as it can hit its targets. London is a great market for foreign students, but it’s also heinously expensive and very dependent on those foreign students. Empiric has been happier to range widely into the second-tier cities such as Cardiff, Edinburgh and Southampton, which might be more resilient over the long term – and offer slightly better value.

The current share price of 84p puts the fund on a sensible discount to NAV. The lowered dividend equates to a yield of 6%, which feels about right. Personally I’d prefer the share price to be closer to 80p and the yield at around 6.5% before I’d definitely jump back in. Market volatility might well deliver that price some time soon.

[spectoacc] 15/2/2018 09:03

Lol Numis still hate it then. Wonder what they're looking for? Costs still too high?

[skinny] 15/2/2018 08:48

Numis Hold 85.35 91.00 91.00 Reiterates

[chucko1] 15/2/2018 08:38

The non-negative revaluation of the portfolio is all I wanted to see. Everything else is a bit of a side-show in comparison. Why? Because if they cannot make the model work, but the valuation estimates that it can work (valuation is largely driven of NOI - net operating income), then simply sell the portfolio in chunks. Each chunk can go for a premium over NAV - the valuation is done in the basis of individual properties, but a portfolio would tend to go for 5% more (though possibly not in the case of ESP as there would be an element of distress in the sale, but some competition for the assets).

In any event, a reasonable trading update, inconsistent with a 23% NAV discount (21% now). A new CEO with some pedigree and a couple of quarters behind that person would work wonders to this currently loathed stock.

[spectoacc] 15/2/2018 08:27

No mention/hint re the previous "might sell" rumour either. Still - considering where the share price has sunk to in relation to the NAV, that's a positive update.

[hannath] 15/2/2018 07:43

Reads as though they are getting to grips with the issues so hoping for stability now and maybe some recovery.
No mention of a replacement for Paul Haddaway though ! ...maybe the Tim/Lynne duo can do it, and save a few £000,000 on replacing ?