Empiric Student Property Share Discussion Threads

[jgh03] 21/3/2019 09:19

Touching on points made in posts 812 and 813, there was a trading update on 5 July 2018 which stated that ESP "... remains on track to meet its previously stated targets of ... Improving dividend cover to approximately two thirds covered by adjusted earnings in FY 2018 and fully covered in FY 2019."

The results for 2018 can fairly say that they hit that target as the dividend was 64% covered. However, as others have said, the fact that the dividend for 2019 is expected to be only 85% covered does indicate that progress is not as good as had been expected last summer. That is my main concern from an otherwise good set of results.

[chucko1] 20/3/2019 23:06

I agree with the sentiments that the results/outlook was just about fair, but no more. The best hope from here is that the 106p NAV attracts a buyer who can manage this better. They have turned it around, but now I feel they will struggle to improve to the level suggested by previous trading updates.

[rob the slob] 20/3/2019 22:22

From todays results statement, can someone explain why this £467M of our money has been kept under the mattress and not put to good use already (and by good use i don't mean hand it back to us)At the AGM on 2 May 2019, shareholders will be asked to vote on a resolution to cancel the Company's share premium account, which stood at GBP467 million at 31 December 2018. When companies issue shares at a premium to their nominal value, that premium must be recorded in the share premium account. The Companies Act restricts the use of this capital which cannot, for example, be used to declare dividends or to repurchase the Company's shares. Cancelling the share premium account will release this capital, which will then be treated as realised profit. While we have no current intention to do so, this will give us increased flexibility to declare dividends or to make other distributions to shareholders. If shareholders approve the resolution, we will promptly apply for the necessary court order to confirm the cancellation.

[stemis] 20/3/2019 20:08

I don't know that they were targetting 100% dividend cover this year but I think achieving it will be a tough ask. Gross margin was 61.8% compared to target of 70%. If they had hit target GM, EPS would have been 4.1p. So they need a 12.5% increase in revenue (i.e beds) to hit 5.0p and cover the dividend. That's about 1,200 beds. I'm not sure they've got that in the pipeline.

[horndean eagle] 20/3/2019 18:48

Poor update. They are going to miss their targets of 100% dividend cover and occupancy for the year. The only reason shares haven't been hit is the market was expecting them to miss. Probably priced about right. What really needs to happen is for someone to take them out. Huge cost savings by taking out the muppets running this.

[makinbuks] 20/3/2019 11:40

Yes, steady progress in line with what they promised. The concern is in 2019 they only get to 85% coverage of a 5p dividend, ie EPS 4.25. That's after bringing all the beds under construction into the mix and having all FM in house. So the question is how do they get to the next step and at least cover the dividend? It requires a further improvement in EPS of 17.6% which is significant

[stevegrass777] 20/3/2019 08:21

Looks ok to me,making progress on all areas of concern,bringing facilities management in house seems to be bringing costs down.
Looking in much better shape.

[rimau1] 20/3/2019 07:36

Everything remains on track here, good progress being made across all metrics, i would expect the share price discount to NAV to close further this year.

[spectoacc] 20/3/2019 07:35

106p NAV, continuing to be fairly solid after previous missteps:

"Tim Attlee, Chief Executive Officer of Empiric Student Property plc, commented:

"We expect 2019 to be a year of further significant progress. We have taken swift action to maximise revenue for the remainder of this academic year and bookings for the 2019/20 academic year are progressing well. The benefits of the operational improvements we have made will continue to come through in 2019 and we are taking action to drive additional efficiencies.

In 2019, we are targeting a gross margin of 67% and a dividend of 5p per share(1) , which we expect to be around 85% covered on an adjusted basis.

While there are economic and political uncertainties, particularly regarding Brexit, we are yet to see any material adverse consequences. We have a quality portfolio of assets, which coupled with the improvements in our operations, gives us confidence in the outlook for the business."

[skinny] 22/2/2019 07:13

The Board of Empiric Student Property plc (ticker: ESP) (the "Board"), the owner and operator of premium student accommodation across the UK, will announce its full year results for the year ended 31 December 2018 on Wednesday, 20 March 2019.

[skinny] 20/2/2019 08:09

.

The board of Empiric Student Property plc (ticker: ESP) (the "Board"), the owner and operator of premium student accommodation across the UK, has declared a dividend of 1.25 pence per Ordinary Share in respect of the quarter ended 31 December 2018, payable on 22 March 2019 to all Ordinary Shareholders on the register on 1 March 2019. The ex-dividend date will be 28 February 2019.

0.04 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 1.21 pence will be paid as an Ordinary UK dividend ("non-PID").

The Board is targeting an aggregate dividend of 5.0 pence per share for the year to 31 December 2019.1

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.

[chucko1] 14/2/2019 16:56

One of the important things I will be looking out for is their expectation for div cover in 2019. We will hear about this when the results are announced soon.

They appear to be broadly on target for 2018 according to this morning’s news. But full cover for 2019 would bring the share price to closer to NAV, which should be around 113p end of 2019. If we add 5p dividend to this then there could be as much as 23p or so total return.

But hiccups are likely to be punished given the rise the past year. Nice rise - about 25% total return. Frankly, once one got comfortable with the scale and reasons for the 2017 setbacks, it’s been a fairly easy ride so far. One which Numis appears to have had nothing to say about. Odd.

[spectoacc] 14/2/2019 16:08

Admittedly not an easy subject to broach as you stand up from bended knee ;)

ESP still look cheap to me - tho not outrageously so - with NAV ticking up & metrics improving, and eventually a return to a progressive divi (from this lower base).

[chucko1] 14/2/2019 15:14

Where were you when I needed you 20 years ago?

[spectoacc] 14/2/2019 15:11

Pre-nup boys, pre-nup ;)

[skinny] 14/2/2019 15:04

Yes - I've been there too!!

[chucko1] 14/2/2019 15:02

Well, she would end up with them anyway if my experience is anything to go by! He does accrue virtue points, though.

[skinny] 14/2/2019 14:48

Trusting!!

[chucko1] 14/2/2019 09:49

SpectoAcc, that is my estimate of NAV. In these circumstances, a 10% discount seems pretty fair.

With a trading volume of 37k so far today, no one appears to be rushing anywhere with this update!

[spectoacc] 14/2/2019 09:06

Incremental progress is still progress, & ought to trade nearer NAV if/when they hit targets (of occupancy, dividend coverage, & costs). I reckon NAV must be about 110p now?

[stemis] 14/2/2019 08:32

Mmm. Doesn't look like a lot of operational progress in H2:-

a gross margin above 61% (2017: 57%) - it was 62.3% in H1

administration costs below £10 million (2017: £13.5 million) - they were £4.873m in H1

dividend to be at least 60% (2017: 33%) covered by adjusted earnings - cover was already 60% in H1

[killing_time] 14/2/2019 07:50

Yep, all looks good.

[spectoacc] 14/2/2019 07:34

I particularly liked:

"The unaudited like-for-like property portfolio valuation increase between 31 December 2017 and 31 December 2018 is expected to be in excess of 4.5%. "