Empiric Student Property’s cost-cutting drive has resulted in an increase in the value of its portfolio after it was hit by operational issues in November last year.
In its annual results to the year end 31 December 2017, the student housing group posted a portfolio valuation of £890.1m – an increase of 23.4% for the full year compared with its valuation of £721.3m a year earlier.
During the period the group also increased its gross annualised rents from £52.1m to £65.3m as well as posting an increase in revenue of £51.2m, up from £19.2m a year earlier.
Its adjusted earnings for the year were £10.1m and it will be targeting a gross annualised rent of £72.2m for the 2018/19 academic year.
In order to cut costs, in November former chief executive Paul Hadaway and chief investment officer Tim Attlee waived their rights entirely to a bonus for the 2017 financial year.
Chief financial officer Lynne Fennah has completed a financial and operational review of the group.
The company announced that this year it would be targeting an operating margin above 70% and a reduction of administration expenses to £10m.
In December the board handed notice to Hadaway, Empiric’s co-founder, who was replaced as chief executive by fellow co-founder Attlee.
In total, its administration expenses for the year were £13.5m and it also raised net proceeds of £107.6m through the issue of 100,917,432 shares at 109p per share in July 2017.
In its portfolio it now has 94 assets with 9,158 beds contracted at 31 December 2017, in 29 university cities and towns.
Tim Attlee, acting chief executive officer Empiric Student Property, said: “We have a very strong property portfolio which operationally underperformed in 2017. We have identified the causes of that underperformance and are implementing the changes necessary to allow the business to deliver the improvements we all want to see.
“We expect these actions will deliver growth in operating margin and dividend cover during 2018 and beyond. As a result, we continue to target a total return of 10% per annum over the medium term.”
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