GCP Student Living: Strong FY18 Progress And Positive Outlooka
Edison | Sep 12, 2018 05:32AM ET
GCP Student Living PLC (LON:DIGS) saw strong growth in FY18 rental income, driven by an increasing number of operational beds, continuing full occupancy and good levels of rental growth. Growing dividends should be fully covered once current development projects are completed and let. Capital values also grew, with investor interest in the asset class remaining strong, contributing to 11.5% NAV total return for the FY18 year. The company continues to find attractive investment opportunities, maintaining its selective approach to investment, both by location and asset quality, and is seeking to raise up to £55m in a share pacing.
Rental and capital growth drive 11.5% return
FY18 rental income grew c 24% with good levels of profitability maintained. With positive supply-demand conditions in DIGS’s chosen markets (94% in and around London), income benefited from continuing full occupancy, average rent growth of 4.1%, continuing acquisitions and completion of a first forward-funding development. DPS increased 3.5% to 5.95p, while NAV per share increased 7.2% to 149.12p. The EPRA NAV total return from the IPO (May 2013) to end June 2018 is now a compound 13.5% pa, and the share price total return 12.5%, both exceeding the 8–10% long-term total shareholder return target.
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