138 Student Living returns to pre-pandemic occupancy levels

University accommodations company 138 Student Living is seeing occupancy returning to pre-pandemic levels, recording a rate of 94 per cent as at December 31, 2023.

This performance for the December quarter is aligned with the management’s projections with the outlook showing that the positive trend will continue, as 138SL is well positioned in a captive niche, where students prefer quality on campus accommodation in a secure environment. In addition, the University of the West Indies (UWI) Mona, where 138SL accommodations are, has indicated its preference for face-to-face learning experience, which bodes well for 138SL.

For the December 31, 2023 first quarter, revenues closed on J$378 million, an increase of nine per cent, when compared to the J$346 million recorded in the prior year. This growth is derived from increases in rates across all halls and short rental revenue being on target.

Short-term rentals 

For the review period, short-term rental income contributed J$23.7million or six per cent of total revenue, reflecting a decline of 37 per cent relative to the similar period in December 2022, as rooms at the George Alleyne Hall that were previously used for short term rental return to the long-term rental pool, as the demand from university students increased.

Seventy-two rooms at the Gerald Lalor Flats are utilised for short-term rental. Rooms that become available on the other halls during the summer will be offered for short-term rental. Other income contributed J$7.7 million reflecting a 46 per cent increase relative to the similar period in December 2022.

This increase is primarily driven by increased intake from laundry operations.

Marginal increase in profits

Activities for 138SL resulted in an operating profit of J$173.0 million for the first quarter from J$172.6 million in the corresponding prior period. The flat results come from an increase in administrative expenses for general insurance, salaries, and Internet.

138SL recorded an efficiency ratio of 54 per cent at the end of the quarter when compared to an efficiency ratio of 50 per cent for the corresponding period. Profit before taxation was recorded at J$85.4 million for the review quarter when compared to J$81.0 million for December 2022.

Earnings per stock unit went down to $0.15 compared to $0.20 for December 2022, a 25 per cent decrease. This is related to the increase in the number of shares in issue from the recent additional public offering (APO).

Balance sheet 

As at December 31, 2023, 138SL recorded total assets of J$10.3 billion, an increase from the prior year’s balance of J$9.89 billion. This movement primarily originated from an increase in cash and cash equivalent.

Arising from the agreement with UWI Mona regarding the management of outstanding balances, as the entity continue to work with them towards the reduction in receivables. As at December 31, 2023, the balance sheet reflected an amount from UWI of J$1.1 billion; an 18 per cent or J$200 million increase from the end of December 2022.

Approximately 84 per cent of total assets, or J$8.69 billion, represents non-current assets, while the remaining 16 per cent represents current assets. Current liabilities stood at J$1.33 billion as at the December 2023, a J$67.9 million or 4.83 per cent decrease from the J$1.41 billion recorded at the end of the 2023 financial year.

This was primarily driven by repayment of short-term loan notes. Shareholders’ equity increased by J$536.15 million to end the first quarter of 2024 financial year at J$5.41 billion.

This increase was primarily driven by the increase in retained earnings and increase in share capital resulting from the recently concluded Additional Public Offering. Cash flow from operations totalled J$122.38 million, compared to J$112.4 million in December 2022, a nine per cent or J$9.98 million increase.

The cash flow from operations to net profit ratio was 1.73x which is indicative of the company’s earnings quality.

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