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LONDON (Alliance News) - Empiric Student Property PLC on Tuesday reported strong growth in annual profit, helped by increased occupancy and reduced costs.
Pretax profit for 2018 was GBP40.3 million, almost doubled from GBP20.8 million a year before, as revenue climbed 25% to GBP64.2 million.
Empiric's gross margin rose to 62% during 2018 from 57% a year prior, "reflecting good progress in increasing occupancy levels and reducing property costs". In 2019, it is targeting a 67% gross margin.
Occupancy for the 2018/2019 academic year was 96%, Empiric said, up from 92% in the previous year, but this is still short of the 97% it considers as full occupancy.
Administration expenses declined 33% year-on-year to GBP9.1 million.
The student accommodation owner's EPRA net asset value per share at the end of 2018 was 106.2 pence, up 1.6% from 104.5p a year prior.
Empiric has returned 5.0p per share to shareholders over the year, down from 5.55p a year before, but in line with its plans. Dividend cover rose to 64% from 34% of adjusted earnings per share.
For 2019, Empiric is once again targeting a total dividend of 5p.
Demand for higher education remains strong in the UK, Empiric said, though total applications did fall 0.6% for the 2018/2019 academic year. This was, however, due to a fall in the number of people making the maximum of five applications.
"We expect 2019 to be a year of further significant progress. We have taken swift action to maximise revenue for the remainder of this academic year and bookings for the 2019/20 academic year are progressing well," said Chief Executive Tim Attlee.
"The benefits of the operational improvements we have made will continue to come through in 2019 and we are taking action to drive additional efficiencies."
"While there are economic and political uncertainties, particularly regarding Brexit, we are yet to see any material adverse consequences. We have a quality portfolio of assets, which coupled with the improvements in our operations, gives us confidence in the outlook for the business," he added.
Shares were 0.3% lower in early trading in London on Wednesday at 95.0 pence each.
