138 Student Living positioned to reduce debt, distribute dividends

The 138 Student Living Jamaica Limited (138SL) Additional Public Offering (APO) closed on Monday, October 23 and the company is now preparing to move forward with using the funds raised to reduce a portion of its $4.2 billion debt stock.

This will stabilise the company’s finances, enabling it to consistently pay dividends and explore growth opportunities. 138SL offers long-term student accommodation in 1,464 rooms and short-term accommodation in 72 rooms at four locations on the UWI Mona Campus, under two concession agreements.

GK Capital Management was the lead broker for the APO transaction.

“We thank all investors who supported the APO and we look forward to growing this company so that our shareholders can benefit from their input,” said Ian Parsard, chairman of 138SL.

According to Parsard, in the future 138SL expects to be able to pay semi-annual dividends of up to 90 per cent of its distributable profits, providing a dividend yield of eight per cent to 10 per cent at the proposed offer price.  This will build on the company’s first dividend payment of 13 cents per share in February 2023.

During the current 2023/2024 academic year, the demand for student accommodation increased significantly. Under its concession agreements with the UWI, Mona Campus, 138SL has the capacity to increase its room count by another 842 rooms, representing a 60 per cent increase in its current room stock.

For the nine-month period ending June 30, 2023, 138SL realised revenues of over $1 billion, a 17 per cent increase over the prior corresponding period.  The improved revenue performance reflected a return to normality from the COVID-19 restrictions and face-to-face classes.

Also, during that period, the company realised net profit of $270 million, an increase of 13.16 per cent over the corresponding period in the previous year.  The company achieved net profit margins of 26 per cent during that period.

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