(Alliance News) - Empiric Student Property PLC on Tuesday said it has suspended all future dividend payments as part of its cash-conservation efforts amid uncertainty caused by the Covid-19 outbreak.
The student accommodation owner also said it will defer developments where cost-effective to do so as well as limit non-essential capital expenditure, adding that the implemented measures will result in a reduction in cash outflows of around GBP26 million and ensure it retains cash headroom throughout the rest of 2020.
Empiric Student said it currently has GBP10 million of cash and GBP57 million of undrawn debt facilities available. It stated that it has GBP32.8 million of re-financing remaining due in 2020, adding that following ongoing finalisation of the four-year facility, it will not have to refinance any debt before November 2022.
The London-based company said occupancy of its portfolio in the current academic year 2019-20 remains at 94% and it has received around 91% of all budgeted revenues due to it for the academic year. However it sad that it will consider letting students out of their contracts from April 25 onwards given the uncertainty arising from the outbreak. It said it believed the decision will result in loss in revenue of up to GBP21 million in the current academic year.
For 2019, pretax profit was GBP54.8 million on revenue of GBP70.9 million.
Looking ahead, Empiric said bookings for the 2020-2021 academic year are marginally ahead of bookings a year ago and bookings continue to be made although levels are reduced.
"Given the lack of certainty at this stage, there remains a risk of lower occupancy and rental rates for 2020/21 than currently forecast."
The stock was trading 0.2% lower at 63.30 pence each on Tuesday afternoon in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Empiric (ESP)