Empiric Student Property Share Discussion Threads

[pj fozzie] 06/11/2017 14:14

From previous information released, ESP have said they intend to announce the quarterly dividend in November and pay it within one month of the announcement. They have also said the total for the year is intended to be 6.1p

I think we can safely assume that a dividend announcement is imminent and it will be for 1.525p

Cheers,
PJ

[jonwig] 04/11/2017 15:49

The upcoming dividend will cost £9.2m and the sale will raise £2m, as you say. The June balance sheet showed over £23m cash (gross, not net) so I doubt they're strapped!

As a non-holder, and opportunistic, I can wait and see if they revert to pure PID payments (90% of net rental income, about 4.2p pa). I hope the pressure on them to do this is being applied right now.

[hannath] 03/11/2017 11:09

They confirmed another 1.525p will be paid so that the total is 6.1p for 2017.

I suspect they are waiting for the £2m sale to complete on 28th Nov which will boost the bank balance a little.

[riskvsreward] 03/11/2017 09:32

Thanks jonwig for the information. On further digging I think they have now scheduled quarterly dividends to Feb., May, Aug. and Nov. They declared the last dividends ex-div date to July to avoid having to pay it to the new shares. SO next one should be declared probably next week?

[jonwig] 03/11/2017 09:23

The July circular says that the new shares will be eligible for all future dividends and that the company will pay dividends quarterly, including November (6.1p for the current year).

The section Risk Factors says in more than one place that dividends are not guaranteed. Usually these things are skipped, but maybe shouldn't be, in this case.

I'd expect them to declare one very soon, or state why not. If they pass one (unlikely?) the share price drop would probably make this a strong buy, as it would signal that their big investors, or bankers were on their case.

EDIT: they haven't acquired an income-producing asset since the fundraise, so dividend payment to the new shares would come right from capital!

[spectoacc] 03/11/2017 07:59

I assumed they'd paid one, but yes - last XD 20/07, does look like one is overdue, with none even declared as yet.

At last results in Sept they said divi target still the same, albeit not covered by EPRA EPS this year.

[jonwig] 02/11/2017 20:34

Can't find an announcement. Maybe check out the fundraising - new shares probably wouldn't be eligible so they may have rescheduled?

[riskvsreward] 02/11/2017 20:06

Isn't a quarterly dividend overdue? Last one was in July and it paid a dividend in October for the previous two years.

[stemis] 20/10/2017 10:51

The question now is have the directors tempered their expansion ambitions?

That's neither likely nor desirable.

There's an interesting interim results presentation on Empiric's web site

hxxps://www.empiric.co.uk/investor-information/company-documents

As at 30 June 2017 ESP had 6,883 'beds' in operation. ESP currently own assets which when fully developed will comprise 9,449 'beds'. I'd expect that to take rental income to over £83m (cp £24m for last half year). They still have about £50m+ from the fund raising which, when levered, could give them purchasing power of £100m. If you look at their Pipeline in the presentation, they pretty much have that spend identified. That should add around 1,200 beds, taking rental income to maybe £93m.

ESP are pretty much programmed to double in size from here.

[hannath] 20/10/2017 10:05

Agree, the cash from the sale will help with the short term hole, when the forward funded projects come online next September things should look much better .... for now I've topped up at £1 & 98p and now sitting tight.
As you say, a shot across the bow for the directors !

[jombaston] 20/10/2017 09:59

I sold several months ago as I saw better opportunities elsewhere and it was pretty clear, despite what the directors were saying, that the dividend was not covered.

I certainly didn't expect such a fall in the share price.

The question now is have the directors tempered their expansion ambitions? Does the Scottish sale mark a watershed?

I guess this is developing into a situation where you have to ask whether you trust the management. Unfortunately I have never had any contact with them although I would be interested in seeing them present should they reach out to a wider audience.

So I would say the jury is still out - let's see what they do next...

[a1n1d1y1] 20/10/2017 09:38

tidcome:
Well said

[tidcombe] 19/10/2017 14:14

Belgraviaboy:
That is an interesting point you make about the constituents of the operational costs. I had previously guessed the share price would dip to 95p and then settle at a fair value of 100p, and then slowly climb as the costs were reduced. But I agree with you that there seems to be little opportunity for a quick cut in the costs. Having sold out at 108p I was intending to buy in again around 95p,but now I am going to wait until the future of the dividend is clearer. I want my 6% dividend from income, not capital!

[belgraviaboy] 19/10/2017 10:59

Always interesting to flick through the annual report and see how far you have to dig to find the important 'post spin' numbers. Take the ESP annual report - not until page 107 do you discover the make up of operational costs: cleaning/repairs/utilities/technology/site management/direct site costs. Are these inflated because they are in the development phase or should they be considered ongoing? ESP would like you to believe the former - I think the latter.

[jl9] 19/10/2017 10:43

"you are being paid back your own money" Operates in similar fashion to Development Securities (now U and I Group)

[belgraviaboy] 19/10/2017 10:32

This is all about the operational & admin costs - look at the true yield after these have been subtracted - nothing like 6%. So ignore the yield, you are being paid back your own money, much better clean property yields available elsewhere. I see these dropping further....

[andyj] 19/10/2017 10:14

Well this is not what we expected when we bought this share looking for a safe yield and low volatility. Something distinctly worrying in this accelerating fall.

[jonwig] 19/10/2017 10:00

Chart has the Manneken Pis formation. Is that buy, sell, or get an umbrella?

[spectoacc] 19/10/2017 09:35

The institutions need to take action IMO. Not much as nominee muppets can do, other than ask shouty questions at the AGM.

[jonwig] 19/10/2017 09:21

Horndean - yes. Compounding their problem is a 20% increase in equity leading to a temporary cash drag on 2017's results. And the money is earmarked for assets some of which are at the development stage.

On the subject of a 'class action', about 48% of the share capital is owned by nine institutions. That is sufficient to upset the table; directors hold a modest number of shares.

[horndean eagle] 18/10/2017 20:40

Management have a got to sort out and to be honest I don't think they are going to be given much time. How they have performed as badly as they have requires some serious incompetence. I reckon they boot out the the executive team. Ive been thinking about their statement earlier in the year where they said

The Board is targeting a dividend of 6.1 pence per ordinary share for the year to 31 December 2017. It is anticipated the dividend will be substantially covered by adjusted EPRA earnings per share for 2017 and going forward1

That was in June. only a month before fund raising announced. How there could have been any prospect of substantial dividend cover is beyond me. 5 months of the year in they should have known they were well on the way there. Especially when NOI conversion was stated to be back at 70%. For me I think you would have exceptionally strong grounds to launch a class action against misrepresentation given how events have transpired.

[jonwig] 18/10/2017 18:26

saj - lots of new REITs coming to market, most aren't raising their target subs. Suggest leaving to settle down, I doubt you'll miss much.

On ESP, I thought this recent disposal would have generated a bit more interest (and buying). It's possible there are a few committed sellers who won't wait around.

[saj3] 18/10/2017 11:13

Anyone interested in the m7 reit ipo??

[riskvsreward] 17/10/2017 18:45

They should do more of this. Tighten the cost control. Prudent purchase ensuring adequate income generation and long-term capital growth.

In short they must do better than private buy-to-let through economy of scale, professional knowledge, more favourable taxation and investing in a safer and growing segment of the property market,all the advantages they have over private buy-to-let investment.