A decline in international student bookings has left Empiric Student Property with just 65% of rooms booked for the 2020/21 academic year, compared to 85% at the same point last year.
The company, which owns 95 student accommodation properties across the UK with 9,401 beds, reported half-year results today in which EPRA net asset value fell 3% to 106.6p per share.
The value of its portfolio fell 2% to £1,010m in the six months due to an assumption of reduced income for the 2020/21 academic year.
The impact of covid-19 on the 2019/20 academic year was a £7.2m hit on rental income, after students left their tenancies early. This amounts to 10.2% of contracted revenue for the 2019/20 academic year.
Around £3.8m of the rental hit is recognised in the half-year results, with the remaining £3.4m to be recognised in the six months to December 2020.
The hit on income has seen revenue in the six months fall 5% to £34m. Basic earnings for the period was -2.39p per share (H1 2019: 4.78p) and adjusted earnings decreased 16% to 1.98p per share (H1 2019: 2.36p).
In response to the disruption caused by covid-19, Empiric suspended its dividend in March and today said it would update on this in Q4 2020.
Chairman Mark Pain said: “We are confident we have a business which will be able to work through the current pandemic and provide a platform for growth moving forward. We continue to suspend guidance with a further update expected in Q4 2020 once we have a clearer picture of our revenue for the 2020/21 academic year. We will review the resumption of dividends at this time.
“Despite covid-19, we continue to see the increasing benefits of our operational transformation and we are optimistic for the future of the business. The attractive fundamentals of increasing structural demand from both domestic and international students for premium, responsibly managed student accommodation focused in high demand UK towns and cities remains strong, whilst the supply of such accommodation continues to be restricted.”
ESP : Empiric Student Property hit by decline in international students