A STUDENT housing provider which has a major presence in Scotland sank to a hefty annual loss last year after its £1 billion portfolio was hit by coronavirus lockdowns.

Empiric Student Property reported a loss of £24 million against a profit of £55m the previous year, and it said current bookings for next year are at 20 per cent, “significantly slower” than before the pandemic.

Revenue in 2020 was £59m, down 16% from £71m in 2019. The company said the decrease was due to factors including £6.5m of refunds being provided to students for April to September, as it released students from their obligations on a case-by-case basis, which it said “also supports shareholders as this helps protect our brand”. Another factor was that expected summer lets of around £700,000 were lost.

At the start of the 2020/21 academic year, Empiric reported revenue occupancy rates of 70%, compared to 94% in 2019/20 showing the final four months of the 2020 financial year had significantly reduced occupancy compared to 2019.

The company said the underlying performance was robust, and like-for-like rental growth would have been 3.1% excluding the Covid-19 refunds. At this point, for the current academic year like-for-like rental growth is 1.8%.

It said the business remained cash generative, with adjusted earnings of £13.9m, against £27m the year before.

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It also said adjusted earnings per share is the most relevant measure of earnings when assessing dividend distributions and this has decreased by 48% to 2.3p against 4.43p, “showing that the underlying operating business continues to generate cash despite the impact of the pandemic”.

Property costs were £22.7m, down 3% both in total and on a per bed basis, as it cut discretionary costs and delayed expenditure where appropriate and “continued to make efficiency improvements while also continuing to see the benefit of the operational transformation”.

Council Tax has been levied on empty rooms which has reduced the cost savings it has made.

The company welcomed the UK vaccination programme, saying this gave "cautious optimism about a return to increasingly normal levels of occupancy".

It owned or was committed to owning 95 assets, representing 9,396 beds, which was a similar figure to the year before.

At December 31, 2020, the portfolio was valued at £1,005m, a decrease of 2% from the prior year of £1,029m, adding that it had £13m spent on capital expenditure and developments during the year.

The company said it does not break out England, Scotland and Wales in its results, but it reported that it has 1,167 beds contracted in Scotland.

Sites include Centro Court in Loch Street and St Peter Studios in St Peter’s Street in Aberdeen, Ayton House, Abbey Walk in St Andrews, Buccleuch Street and Kings Stables Road in Edinburgh, and in Glasgow, George Street Apartments, George Street, Bath Street, the Glasgow Ballet School in West Princes Street and Willowbank Crescent.

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Duncan Garrood, Empiric Student Property chief executive, said: “All our buildings remain open, staffed, maintained, and operating strictly in line with Government guidance.

“We implemented actions to ensure that we operated safely throughout the pandemic, and we are continuing to provide Covid-19 secure homes, critical services, and enhanced programmes to ensure the safety and well-being of our students and colleagues, a top priority for Empiric.

“We experienced physical occupancy levels of above 50% during each of the three national lockdowns, with physical occupancy level in our buildings is currently approximately 57% of total operational rooms.”

He said: “Current bookings for the AY21/22 are 20%, significantly slower than in pre Covid-19 cycles. We have started to see an uplift in bookings since the UK Government’s recent announcement of the roadmap to exit lockdown. Universities are very late in advising places for the 2021/22 academic year and we expect the sales cycle to be significantly back ended. We welcome the vaccination programme, and this gives us cautious optimism about a return to increasingly normal levels of occupancy.”

Shares closed down 1.7%, or 1.3p, at 76.6p.