Empiric Student Property has announced its annual results for the year ended 30 June 2016. The company grew its portfolio significantly during the year, from £251.3m to £523.9m, funded by £286.4m of gross equity proceeds and a further £120m of debt. As a result, the company says that its portfolio of purpose-built student accommodation increased to 7,396 beds (2015: 3,503 beds). The period saw 35 new assets contracted, equivalent to 3,879 beds in 19 towns and cities and, reflecting this, the company’s gross annualised rent has increased from £18.4m in 2015 to £33.1m. The increase in size saw the company included in the FTSE EPRA/NAREIT Global Developed Index (from March 2016) as well as the FTSE Small Cap/All Share Index. The company also launched its ‘Hello Student®’ operating and marketing platform.
During the period, the company’s EPRA NAV per share increased by 2.1% to 105.4p (2015: 103.2p). The company also declared dividends of 6.0p per share, a 50% increase year-on-year (2015: 4.0p). EPRA earnings per share increased by 931% to 1.89p (2015: 0.13p) whilst the company’s adjusted EPRA earnings per share increased from 0.13p to 1.89p (increase of 1,354%). The company says that its share price total return was 4.6% for the year to 30 June 2016, which compares with -8.29% for the FTSE All Share REIT Index for the same period. They say that this was negatively impacted by the volatility in the market following the EU referendum which caused the share price to drop but it has since recovered.
As at 30 June 2016, the company’s loan to value ratio was 22.7% (2015: 26.0%). This is below its target of 35% and maximum of 40%. The weighted average term to maturity for the debt of 9.7 years and a weighted average interest payable of 3.54%.
Since its financial year end, the company say that it has agreed two new development debt facilities, secured on a number of forward funded assets amounting to, in aggregate, £63.4 million. It has also acquired five new operating assets (323 beds) and one forward funded asset (185 beds).
Looking forward, the company says it is targetting an average rental uplift of 2.8% targeted for the 2016/17 academic year. It is also targeting a basic EPRA annualised dividend of 6.1p per share for the next financial period (in line with its dividend growth target of not less than RPI). The board expect this to be substantially, if not fully, covered by adjusted earnings per share from January 2017. It says that the average valuation yield on the company’s portfolio of operating assets, and those that had reached practical completion as at 30 June 2016 was 5.9% (2015: 6.1%), compared with an average net yield on acquisition or on cost of 6.4%.
Empiric Student Property doubles in size : ESP