GCP Student Living has said it intends to pay its third interim dividend but expects “materially reduced revenues” for the final term of the current academic year.
The UK REIT said it has received around 74% of all budgeted revenues due to it this academic year but added that the closure of universities due to covid-19 is likely to hit income.
Some students have already vacated their rooms and the company said it would look favourably on requests to forgo rents by residents seeking to return home for the remainder of the current academic year on a case-by-case basis.
Should the disruption caused by the covid-19 pandemic continue through the remainder of the 2020 calendar year, the company expects rental income from the 2020/2021 academic year, which starts in September 2020, to be materially adversely impacted.
“The scale of this impact will depend on measures taken by global authorities, including the UK government, the approach taken by higher education institutions as regards in-person learning and how the situation develops and over what timescale,” the group said.
It did note that direct let bookings for the forthcoming 2020/21 academic year are ahead of bookings as compared with the same time last year and that students pay the company a deposit equal to two weeks’ rent at the time of booking.
The company said it has a robust balance sheet, including cash resources of £50m, conservative borrowing levels (with a loan to value of 19%) and an undrawn £45m redrawable credit facility.
It added that it intends to maintain the third interim dividend in respect of the quarter ended 31 March 2020 at a level which is comparable to that paid in respect of the quarter ended 31 December 2019.
“For the avoidance of doubt, the directors will continue to keep wider events and the company’s operations under review,” it added. “The directors currently expect to declare the third interim dividend on or around 1 May 2020.”
DIGS : GCP Student to pay dividend despite reduced revenues