Empiric Student Property (ESP) H2 2023 earnings summary

Executive summary

• Revenue rose 10% YoY to £80.5m; occupancy was 99% for AY 22/23 and AY 23/24, with like-for-like rental growth of 10.5% for AY 23/24.

• EPRA NTA per share increased to 120.7p, EPRA LTV fell to 30.6%, and total accounting return was 7.6%.

Financial highlights

• FY 2023 revenue was £80.5m vs £73.0m; gross profit was £55.3m vs £49.0m, with gross margin of 68.7% vs 67.1%.

• Administrative expenses rose to £14.0m from £13.4m; net finance expense increased to £17.2m from £15.0m.

• Net profit was £53.4m vs £67.7m; EPRA EPS increased 17% to 4.0p from 3.4p.

• Dividend paid and declared was 3.5p vs 2.75p in 2022.

Outlook and guidance

• AY 24/25 revenue occupancy expected to be effectively full, above 97%, with like-for-like rental growth above 6%.

• FY 2024 guidance includes 70% gross margin, approximately £15m administrative costs, and 4.6% anticipated weighted average cost of debt post-refinancing.

• AY 24/25 operational beds expected to be approximately 7,900, including approximately 200 returning after refurbishment; 2024 minimum dividend expectation is 3.5p, paid quarterly and progressive.

• Planned 2024 capital expenditure is £34m for refurbishment, fire safety and green initiatives.