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Yes thats what im thinking on this whole thing.
Its got to make up for the loss in foriegn students and i can imagine UK uni's being very busy after this.
The U-turn in A level grading means that there'll be loads more students able to go university this year. Should mean more demand to for accommodation, should mean higher occupancy rate for ESP properties leading to reinstatement of divi.
I know that at least one top UK university are insisting that all students live near the university for their 1 hour per week tutorial, the lectures are online. From my experience educational establishments are like sheep so I'm quite sure other universities are doing the same. 3 out of 3 students I know who are due to start uni this year are doing so.
Really happy to hold here, markets are over estimating hours many students are going to stay at home this year in my opinion students will still want to go to university and carry on there education, especially if the jabs market is a bit tighter this year.
ESP have desirable properties for the post covid years mainly en suite and self contained studios, so it will be interesting to see how they fair compared to others.
It also seems Labour are helping fill our properties by trying to upgrade a level results!
I'm expecting to see a good take up of accommodation in second half, overseas students will return to complete courses, maybe less might start new courses but this will be compensated by more home students taking up premium on suite accommodation due to COVID19. Also, as mentioned in the RNS there'll be more post grads due to the difficult recruitment environment at the moment. So assuming the accounting should work out to be a good move. Nice rise in the SP today, still a long way off my first buy in! Once dividends are restored the SP should return to normal.
On first glance ,nothing worse than expected.But looks as if they have overstated revenue and understated losses by shifting almost half of the rents waived into the second half results.No doubt allowed by accounting rules but still misleading.They could have chosen to take the hit in the first half.
My understanding is that despite many universities moving to online lectures next year, many students are still planning to reside in the cities where the uni's are so as to enjoy the full university experience (and of course, gain their own independence!). I think that capacity utilisation is going to be higher than the market thinks next year!!
I read somewhere that some Uni's were banning second and third year students from having a year off.
Also Uni's are going to struggle if to many take a year out,I can see them doing everything in there power to get students back in and pretend buisness as usual.
Althought this year isn't going to be a great year for esp and other student accomadation I feel it's not going to be as bad as the markets have discounted ESP.
A steady march to normal should lift the share price.
You are very logical S777.But not in tune with snowflake priorities! Approx 15% undergrads and 35% postgrads are overseas students.They have the cash to pay for better quality accommodation.Much reduced demand expected this autumn.Scary to come to UK when we are in Covid chaos compared to the rest of the world.Current forecast for U.K. student deferrals to 2021 is c20% :about twice the usual rate.Remarkably,many ( most?) UK undergrads do not actually go to uni purely for the education.They go for the fun, freshers week, partying etc etc.So,unis in 2020 are likely to have a shortage of bottoms on seats and therefore fewer cheeks requiring beds. By 2021 their parents will want them out the house.And hopefully overseas students will still want to come to the U.K. although the EU ones will not have the same guaranteed access .
Bought some today
Also with ESP being a REIT it is bound by certain rules about the dividend,so the dividend will be 90% of its property income (not capital gain) to maintain REIT status I think.
Personaly I feel the cutting of the dividend as a possitive thing,they have struggled to pay so much and were just about to have fully covered dividend,but I feel cutting it at this stage is wise and hopfully going foward will be reinstated at a sustainable Reit maintaning level.
Yes I think they do have more foreign students, and a bit more upmarket, but In the last RNS they were talking about new bookings having more of an interest in ensuite studio style accommodation (I think self contained) and said 80 +percent off memory of ESP properties were of this style.
I've being buying here hoping for some clarity from government and a recovery in time.
Surely once workers are back and school children are back students will have to go back to university.
Hi all,
I'm interested in the sector, namely student property REITs. Fairly new to it though. Just looking to find out a bit more about the company.
Compared to the sector, GCP Student Living and Unite group, Empiric seems to cater toward the upmarket end with a lot more foreign students. Is that an accurate depiction would you say?
On a very quick glance the loan to value of the portfolio doesn't seem excessive:
"The Loan to Value ("LTV") stood at 33%*" (from 31st March RNS)
One concern is that since the dividend was cut:
"The Board has decided to suspend all future dividend distributions until market conditions stabilise, although it remains mindful of its REIT tax obligations."
What will it be like in terms of yield when it returns? Imagine it won't be the 8.5% yield it currently trades at...
I don't have much experience with getting to grips with LTIP awards but the RNS from 8th April:
"Annual Bonus for FY 2019 and LTIP Option Awards for FY 2020 / PDMR Notification"
This seems to give management an incentive to increase the share price. Although I am potentially concerned about any dilution. Is that an issue here do you think?
Many thanks, sorry for all the q's!
ESP Empiric Student Property......
Broker Views. present SP 65.6p
Latest broker views
Date Broker Recomm. Current Price Price when issued Old price New price
11 Feb 20 Berenberg Hold 66.20 103.00 105.00 -
06 Feb 20 Berenberg Hold 66.20 101.40 - 105.00
05 Feb 20 Numis Hold 66.20 100.40 96.00
Fundamentals and health
Market capitalisation £352.85m
Shares in issue 603.16m
PE ratio 6.44
EPS 9.08p
EPS growth 35.93%
ROCE 5.64%
Quick ratio 0.31
Current ratio 0.31
Total dividends per share 5
Dividend yield 8.55%
Dividend cover 1.82
ESP Empiric Student Property.......bullish update yesterday.......
https://www.investegate.co.uk/empiric-student-prop--esp-/rns/trading-update/202005060700060362M/
Morning Star Report...
Empiric Student Property Outlook Confident As Secures New Bookings(Alliance News) -
Alliance News6 May, 2020 | 10:58AMEmail Form
(Alliance News) - Empiric Student Property PLC on Wednesday said it expects to report a double-digit fall in revenue this academic year, but continues to see demand for accommodation for the forthcoming academic year.
The student accommodation provider said its buildings continue to be staffed and maintained despite the lockdown.
However, the company said it expects a total reduction in income for the current academic year of up to 12% - about GBP8 million - which is short of the worst-case-scenario reduction in revenue of up to GBP21 million previously announced by the company.
Empiric explained that it has released from rent and lease obligations residents who are either no longer in occupation or, due to university closures, plan not to return to their accommodation.
However, the company noted that 55% of its student accommodation bedrooms continue to be occupied by residents despite university closures.
Looking ahead, Empiric said it continues to receive bookings for the forthcoming academic year, with 47% of rooms now reserved, compared with 54% at the same point last year.
Demand from international students is continuing, albeit at lower levels, but the company said it is starting to see an increase in bookings from the UK domestic market.
The company also noted that its 52-bed development at New Walk in Leicester is expected to complete later this month, in time for the forthcoming academic year.
However, given Empiric's priority of conserving cash during this period of uncertainty, the company said it has deferred the delivery of further three developments until market conditions stabilise.
"Empiric's strategy of owning and operating premium student accommodation in high-demand towns and cities combined with a strong and robust balance sheet puts the group in a strong position to withstand the challenges presented by the Covid-19 pandemic," the company said in its statement Wednesday.
Empiric shares were trading 6.5% higher in London on Wednesday at 62.28 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
https://uk.advfn.com/p.php?pid=legacydaily&epic=L^ESP&type=4&size=3&period=4&ind_type1=1&ind1_1=&ind2_1=&olx_1=3&ma_type1=3&o_1maday1=10&o_2maday1=&o_colour1=1&olx_2=3&ma_type2=3&o_1maday2=50&o_2maday2=&o_colour2=2&olx_3=3&ma_type3=3&o_1maday3=200&o_2maday3=&o_colour3=3&scheme=&delay_indices=DELAYED_INDICES
Finances under control here.Unis will reopen by Oct.If overseas student numbers markedly down, even if they have to trim the fees, there are plenty of UK students whose parents will step up to ensure their snowflakes are protected.Just got to avoid a material second virus wave in Winter.....
Better than expected trading update at this stage of the lock down!
Much better accommodation and self contained studios and en suite accommodation probably helps!
On 12% down on this academic year.
And better than I expected bookings for next!
Students probably staying in accommodation because of lack of quite space at home maybe!
Definitely one to watch for the recovery and lock down easing.
Ive already bought here in the dip, maybe more!
Well looks a great deal, pushes date out, and a better rate, can't be bad
. It's a show of strength in the business really to get this done right now at better rates.
I've bought here quite a bit over the last 3 weeks.
Looks like a great bargain, and I feel once schools and universitys are open again students will feel compelled to go back.
I think pubs and cinemas etc will struggle to get people out again, but education and work should be be different.
It's hard to guess just yet.
But I've had to have some. Just to cheap.
Don't worry about losing your dividends and possibly losing REIT status.... the board are still getting their bonuses. That's all that matters. Party !!!!
The word you are looking for is "opportunity".
Spot on Vulcan - I have no words to decribe this carnage.......
Shame these great results will not mean anything due to the Covid-19 situation - strong cash in bank and they have reduced borrowings this year significantly.
They say bookings for next year are at same level as this year - not clear if those are contracts, nor what level that is.......so there could be an issue in October for the start if the new term if matters have nit improved.
Agreed. Utter and complete panic with no real consideration of the fundamentals. Buying here has to make you good money over a 12 month timeframe.
Errrm 56p share price... a little speechless to be quite honest