Empiric Student Property (ESP) H1 2024 earnings summary

Executive summary

• Transformation plan and growth strategy delivered strong results, with like-for-like rental growth of 10.5% for AY 23/24 and over 6% forecast for AY 24/25, and occupancy at 99% for AY 23/24 and over 92% booked for AY 24/25.

• H1 2024 revenue increased to £42.4m (+3% YoY), gross margin rose to 72.2%, and EPRA NTA per share grew 1.7% to 122.8p.

• Portfolio valuation rose 1.3% like-for-like to £1.1bn, despite a £26.5m hit from tax changes.

• Disposals of £115m completed above book value, with capital redeployed into high-growth locations and refurbishments.

• Customer satisfaction and Net Promoter Scores reached record highs, with NPS at +37 and 87% satisfaction rate.

Financial highlights

• H1 revenue was £42.4m (+3% YoY), with like-for-like rental growth of 10.5%.

• Gross margin improved to 72.2% (+0.5 pts YoY), with net profit at £24.8m.

• EPRA NTA per share rose 1.7% to 122.8p; total accounting return for H1 was 3.2%.

• Interim dividend up 7.7% to 1.75p/share, targeting 3.5p/share for FY.

• Disposals of £115m in assets above book value, with proceeds reinvested.

Outlook and guidance

• Like-for-like rental growth for AY 24/25 expected to exceed 6%, with occupancy forecast above 97% and bookings already past 92%.

• Minimum FY dividend target of 3.5p/share reaffirmed.

• Gross margin expected to moderate to around 70% due to £2m annualised energy cost increase.

• No material refinancing required until 2028; 95% of debt fixed or capped.

• Positive market fundamentals and increased investment activity support growth ambitions.