(Alliance News) - Empiric Student Property PLC on Thursday said it will resume dividends in the final quarter of 2021, with plans to gradually increase payouts once occupancy rates recover.
The London-based real estate investment trust owns and runs premium student accommodation in the UK, including those operating under the Hello Student brand.
The company said its revenue sank 24% to GBP25.9 million in the six months ended June 30 from GBP34.0 million the year prior as occupancy rates fell to 65%, compared to 84% in the first half of 2020.
Even so, the company swung to a pretax profit of GBP7.0 million from a GBP14.4 million loss the year before.
The company's noted fair value unrealised gains of GBP1.8 million for its investment property in the first half, compared to a GBP26.2 million unrealised loss in that period a year prior, which offset higher revenue.
EPRA net tangible assets per share were 106.2 pence on June 30, up 1.1% from 105.0p at the end of 2020 and down 0.4% year-on-year from 106.6p.
Empiric Student said disposed of four assets in the first half for GBP18.1 million, generating GBP1.7 million in profit.
Recent disposals contributed to a slight decrease in the company's property portfolio value to GBP994 million on June 30 from GBP1.01 billion at the end of 2020.
Chief Executive Duncan Garrood said the company was: "Actively managing the portfolio for capital recycling and are encouraged by progress on our disposal programme which supports the value of our balance sheet. We have also started the refurbishment works on our assets as planned. Our new revenue management system is working well and will allow us to reduce costs from September 2021 onwards as well as increase customer acquisition and revenue."
Empiric Student noted plans to resume dividends with a 2.5p payout in the fourth quarter of 2021.
It expects to begin paying a minimum annual dividend of 1.5p in 2022, with plans to increase payouts as occupancy levels normalise.
The company added that - if current booking levels continue - occupancy levels are likely reach 75% to 85% at the start of the academic year.
The trust said it aims to achieve full occupancy as soon as possible, at which point it expects to realise a total return of 7% to 9% and a gross margin over 70%.
"Whilst we have been impacted by the pandemic, we remain encouraged by the resilience of the business, which is underpinned by the operational transformation we've undergone over the past three years, and our underlying business outlook remains positive," Garrood said.
Shares in Empiric Student were trading up 2.0% at 102.00p each in London on Thursday morning.
By Scarlett Butler; scarlettbutler@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
Empiric (ESP)