Share Name Share Symbol Market Type Share ISIN Share Description
Empiric Student Property Plc LSE:ESP London Ordinary Share GB00BLWDVR75 ORD GBP0.01
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.40 -1.46% 94.20 93.80 94.40 95.20 93.80 95.00 728,922 16:29:59
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment & Services 64.2 40.3 6.7 14.1 568

Empiric Student Property Share Discussion Threads

Showing 3726 to 3749 of 4000 messages
Chat Pages: 160  159  158  157  156  155  154  153  152  151  150  149  Older
DateSubjectAuthorDiscuss
18/12/2017
09:40
Given the current 86p price it does not look like anyone is buying the prospects of the 99p take out story
belgraviaboy
16/12/2017
09:22
Any chance of a merger with digs or a take over by utg. That would remove this useless board andmanagement and reduce the cost, benefit from synergy and give the existing shareholder an exit if they so wish.
riskvsreward
16/12/2017
07:50
@ arichardwilson - the 23 Nov RNS was styled "business review". The fact that Tim Attlee is described as "acting CEO" suggests they have given themselves some flexibility as to their next step. The key person is, of course, the Chairman. She should come to a decision about the conflicting interests here which include the aggrieved large shareholders (they hold a big chunk), the existing executives and potential buyers. Selling the whole company for 100p might not get shareholder approval if a new CEO from outside could convince them that the prospects are viable. However, nothing has been said about the "search for a new CEO", which I found a bit unusual. Current LTV is 36%, and their ceiling is 40%. This is actually quite comfortable if their debt covenants specify 40% (it would be higher in practice), as it would take a 10% fall in their property values to break that. Even so, I imagine the sale of some properties is part of the strategy.
jonwig
15/12/2017
16:42
I have had confirmation from somebody in the student digs sector that the Property Week article is correct. The board of ESP have finally realised they do not have the management to run this portfolio so would be better off selling to someone who can do a better job. Strange that the directors have said nothing to shareholders about a strategic review or considering options when the property market is aware of their plans.Some big shareholders are apparently incandescent at being misled in the July share placing.
arichardwilson
15/12/2017
16:28
DIGS certainly seems the best comparison; could argue ESP has done more on the development side?
spectoacc
15/12/2017
16:08
Interesting discussion. I too sold out some time back and anticipated re-entering at some point. However, I have since done more analysis across the REIT sector and what stands out is the breathtakingly high costs at ESP. Part of this is the high property operating expenses that come with running these student properties. While the yields on student rooms might look good these are not really comparable with industrial property yields. Commercial tenants might pay many costs themselves or might be charged for extra services. They certainly don't get free utilities and staff to look after you. When ESP say they are looking for a 60% operating margin moving toward 70% over time, this means they are paying 40% in property operating expenses hopefully reducing to 30%. This doesn't include admin costs which were running at over 30% of rents in the latest numbers. Add in finance costs and there isn't really much income left. Compare this with DIGS where operating margins are 79% (21% costs) and admin expenses a little over 20% of rents. This is presumably where ESP would like to be. If they can get there it might not look too bad. But I wonder if they can with a much more diverse portfolio geographically and (to date) more aggressive expansion. So I agree with the suggestion that they might want to look at a more focused portfolio. I won't start comparing these op & admin costs with other REITs as you won't want to be in the student sector at all! And the infrastructure REITs are looking cheaper now Labour have got rid of the premiums for HICL and JLIF.
jombaston
14/12/2017
13:43
Something is not right, it does not make sense, we must be missing some vital information. You don't just sell off the whole company cheap because some buildings are not cost-effective, you sell the ones which are in the wrong location and tighten up cost controls on the others. It shouldn't be that difficult to find a suitable executive to shrink the company a bit down to concentrated groups of profitable buildings. Even if shareholders are likely to make a small return by buying now many will be selling up because the shares have lost their purpose, which was to provide safe steady increasing income over the long term. I sold up in August expecting to buy back at a slightly lower price, but every time I was tempted to buy again I felt there was more bad news to come, and even now more bad news would not surprise me.
clausentum
14/12/2017
12:11
Who says they can't rent them?
stemis
14/12/2017
11:51
Not seen the reason for selling surely renting students rooms cannot be so difficult that even this shower could achieve a profitable outcome. What are they not telling us is there anything wrong with the assets why are they not able to rent them and make a profit remove this management team and put another capable team.
wskill
14/12/2017
11:28
I'd much rather they completed the roll out of their development pipeline and then see where we are...
stemis
14/12/2017
08:56
Touting a low ball initial price should encourage an auction. Final settlement somewhat nearer to NAV".
scallywagkid
14/12/2017
08:40
Great find. Although a 600m sale for the 820m portfolio would be a discount of around 27%, ie some way lower than the current discount,which doesn't quite make sense.
riverman77
14/12/2017
08:11
Very interesting, thanks - I'd actually be disappointed with that, despite being a bearish holder. Average buy price is lower but there's a long-term dividend stream there if they can sort themselves out (my bearishness is based on them having failed to sort themselves so far).
spectoacc
14/12/2017
07:58
interesting ! ...lets see how it reacts today
hannath
14/12/2017
07:27
"Empiric Student Property is considering putting itself up for sale for around £600m, Property Week can reveal." Https://www.propertyweek.com/news/empiric-hoists-600m-for-sale-sign-after-ousting-ceo/5094011.article That would be 99.5p a share. Recent buyers would be happy enough, but not those who subscribed in the last fundraising.
jonwig
13/12/2017
18:32
Exactly, if like me you attended Uni. about 20 years ago, then the rent for a on campus room was about £125 a month all included, now you have to pay over £600 to £800. So that is both growth in income/rent and capital value in the long term. Currently if they don't overpay and be cautious with development cost, they can buy property with initial yield in the 5 to 8% and if they take on debt, it will be costing around 3 to 4% so how cannot they make money?
riskvsreward
13/12/2017
09:17
It is now sufficiently hated for me to be interested. Positive steps include the divi cut and management changes. This is not rocket science. Fill the rooms, cut costs - don't be greedy. The rest will follow. Small long position taken.
belgraviaboy
13/12/2017
07:18
@riskvs - or unless they overpaid in the first place. Thanks @Jonwig, Numis target says it all. Just them & me!
spectoacc
13/12/2017
06:48
Cannot see how the investment executive officer can survive in the long term with poor investment decisions like the Cardiff and Aberdeen investments, unless he has disagreed with those investments but overruled by the fired ceo. a 5 to 6% yield is achievable if they make wise investments and control the costs. Afterall even private individual buy-to-let investors can be profitable so cannot see why a reit like esp cannot make a roe in the region of 10% per year unless the management is too poor, especially in today's low interest rate age.
riskvsreward
13/12/2017
06:34
Not much press coverage, but it would be nice if this sort of thing catches on: It floated at 100p per share in June 2014 and edged up slightly today to 83.28p. One property expert said the discount would make Empiric look “very attractive to suitors at the moment”. Https://www.standard.co.uk/business/bidders-study-freshers-digs-specialist-empiric-as-boss-is-ousted-a3717296.html Numis seems to have dropped its target price from 94p to 91p yesterday.
jonwig
12/12/2017
15:05
If Attlee went too I'd agree, but sounds like if there is a successor as CEO, he'll be choosing him!
spectoacc
12/12/2017
14:44
@Jombasto, @Spec. Thanks for the comments about "affordable" dividend. Since they need to remain a REIT (surely?) they must pay out 90% of nri as a pid. They seem capable of paying ~4.0 to 4.5p which includes costs (look at the last half year's divi breakdown: Dividends declared in respect of the period totalled 3.05 pence per share. Of this, 2.098 pence has been paid as a Property Income Distribution under the UK Real Estate Investment Trust rules). And, as Stemis says, they have properties coming on stream where developemnt costs have already been booked. I do think that pruning under-performing assets (Cardiff, Aberdeen) would be a good idea, even at risk to asset value. I'm not suddenly getting enthusiastic about this just because I bought a pretty trivial amount, but I do think this is a play on management, and one blockage has been removed.
jonwig
12/12/2017
13:55
@Jombaston - a point @Jonwig made at the time of the announcement, that they shouldn't be targetting 5.5p then 5p annual dividend - they should be targetting what can be afforded, and then look to grow it from there. No one has commented on my post above but I'd say the share price agrees with me. I remain a holder, underwater, but today's announcement was poor. No one's mentioned Cardiff or Aberdeen either - isn't as if there weren't trading issues too. Merry Christmas :)
spectoacc
12/12/2017
13:48
I've put this back on the watchlist after today's announcement. This has prompted me to go through the latest results (6mths to Sep) and the problem is quite clear when you look through the accounts and particularly the cost ratios. I calculate the 'true yield' of this REIT (using the 6 months data annualised) as 0.5%! Virtually all the rent collected was being spent in operating, admin and finance costs. Of course, you can also see this in the unadj EPRA earnings and cash flow numbers. Subsequent statements acknowledge the need to improve operating margins and reduce admin costs. Looking at the numbers I would say they need to reduce them by at least a third if not more. The targets on admin costs target this sort of saving. For operating expenses they have a target of reducing them by a quarter over time (from 40% to 30% or expressed as an operating margin from 60% to 70% margin). But this will take time - if they can manage 65% next financial year it would be a good start. However, they are not at the point where a divi of 5% of NAV or even 5p in the pound is sustainable. My point is if they want to position this as a REIT that pays a sustainable (and possibly growing) dividend they need to do something more radical than has been proposed. Clearly there is good asset backing but are some of the assets more profitable than others? Do some cost more to run? Should they be expanding so rapidly? How about selling some assets and focusing on the most profitable and cutting the div to 4p? After all, it would still be a decent yield at the current share price. Or maybe they could sustain the current divi by selling some properties and making clear that this represented part of the distribution until the divi could be properly covered. It is tempting to buy a few shares but I think it is still speculative so will wait for some pointers from the new management first.
jombaston
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