Espey Mfg. & Electronics Corp. Price & Performance (ESP)

Continuing this focused strategy, and to drive growth in quarter four twenty twenty four, we raised £56,000,000 in a well supported equity raise. We're successfully deploying this capital as promised. This included the acquisition of a new asset in Manchester in December, and we're currently at the advanced due diligence stage of a further strategic acquisition. We also acquired two additional sites [indiscernible] with more acquisitions in the pipeline. We continue to actively manage our portfolio, Our disposal program has completed. And in aggregate, we sold 24 assets for over £145,000,000 broadly in line with book value. We fully refurbished Brunswick Apartment Southampton with significantly uplifted rent and have exceeded our target 9% to 11%. IRR. Three years ago, our customer service of only plus 10. By 2024, this rose to plus 32, significantly above our peers, at plus 19. Our customer satisfaction has reached an all time high of 86%. We've had a record number of rebookers with 53% of all eligible rebookers choosing to stay a further year. Our dividend is up 6% of the previous year. ESP is delivering best ever metrics as a result of this transformation Our results benchmark well within our sector and we're pivoting to growth.

To drive shareholder value. Now I'll hand over to Donald to take us through the financial performance. Thank you, Duncan, and a very good morning to you all. [indiscernible] now talk you through the financial performance and ESG highlights of 2024. This time last year, we messaged that the business had materially including its non core disposal program, and we're seeking to shift its focus toward growth. I'm pleased to say that despite some challenges, made a good start to delivery of this growth agenda. Let's look first at the income statement highlights. Revenue for the year increased 5% to £84,200,000 This masks underlying growth and blended like for like rents of 9.3% have been achieved across the financial year of 2024. We'll look into this a little further shortly. Gross margin has continued to improve in line with guidance with a one percentage point increase to 70%, demonstrating the efficiencies that can be generated from our clustering model Cost challenges anticipated in 2025 will see us expect to hold this gross margin at about 70% for the year ahead. Administrative costs increased 10%, primarily in support of the group's growth agenda, together with the full year impact of the inflationary environment we all experienced during 2023.

The increase includes a nonrecurring £500,000 charge related to abortive joint venture costs. Which when removed, result in underlying costs very much in line with guidance at £15,000,000 Finance costs have also increased by 12% to £19,500,000 pounds This includes a nonrecurring charge of 900,000.0 related to refinancing activity concluded earlier in the year. Which when removed results in a change of 7% year on year. With the increase linked to higher overall drawn debt carried at a marginally higher average cost.

EPRA earnings have increased 5% to 4.2p on a per share basis. And this time last year, we set out a 2024 minimum dividend target of 3.5p, To date, dividends paid have been in line with this target However, the full year performance of the business continues to support a progressive dividend and we are pleased to be in a position to increase our total 2024 dividend to 3.7 per share a 6% increase on the prior year Our fourth quarter payment of 1.075p be made to shareholders in April. This chart breaks down the key components of revenue across the year. With strong occupancy in both the current and prior periods, the 5% increase in revenue to £84,200,000 includes Firstly, like for like growth of $7,400,000 a little over 9%, This follows the 2023 and 2024 sales programs and the benefit of our dynamic pricing capabilities, Three properties acquired during the year contributed a further £700,000 in revenue, this being offset by the disposal of eight non core properties [indiscernible] in aggregate to income during 2023. [indiscernible] The impact of capital and refurbishment works reduced 2024 headline rent by a further £1,000,000 but the short the short term cost refurbishment cost is expected to add a little over £1,000,000 in annualized incremental revenue as this returns in 2025.

Onto the balance sheet. 0.9% to119.6p. The decrease largely due to the company's equity placement in October which was 2.5% dilutive to NTA. [indiscernible] income accretion can be expected from 2025 with the proceeds of the placement earmarked for deployment toward accretive operational acquisitions and to fund the conversion of sites for postgraduate exclusive use. Which are also expected to deliver attractive returns. The portfolio delivered a net 1.6% like for like valuation increase in 2024, This is inclusive of increased purchase cost adjustments of $26,500,000 reflecting the evolution of multi and more recently in Wales. On the assumption these legislative changes had been in effect at the start of the year, the portfolio's underlying like for like growth would have been 4.2%. We continue to hold comfortable levels of liquidity with over 7,000,000 on hand and no near term refinancing needs. Borrowings have increased modestly to $370,000,000 with a lower overall EPRA LTV of 27.2%. On a pro form a basis, assuming the proceeds of the placement are fully deployed, EPRA LTV would be around 29%. Finally, NAV growth and dividends paid over the past three years has delivered an annualized total accounting return of over 6.5%, One year TAR of 2% reflects the impact of multiple dwelling relief and the dilutive impact of the placement both discussed earlier.

This next slide bridges the evolution of net asset value, highlighting its key value drivers. EPRA earnings of $25,900,000 added 4.2p per share. Net valuation gains of further 2.5p with the payment of quarterly dividends returning 3.6p to shareholders in the year. The dilutive impact of the equity placement shaved 3.1p off NTA, with losses recognized on the disposal of eight non core properties during the year reducing NTA by a further 0.7p. On a look back basis, non core asset disposals have on average traded very close to their valuation, with almost £150,000,000 in total disposed of at just 0.2% below valuation. The portfolio net initial yield has remained stable across the year. The reversionary yield has also held at 5.7%, providing confidence that as the letting cycle advances for the new 2526 academic year, further valuation rise could be expected. I'd next like to provide an update on the deployment of proceeds from We raised a little over £54,000,000 after costs. Firstly, dollars 30,000,000 was earmarked for deployment into two well aligned acquisition opportunities in key university cities where we could benefit from the efficiencies of clustering nearby our existing operational sites. And the potential for future refurbishment and its associated rental growth.

Both acquisitions were expected to deliver a net initial yield of percent plus. Secondly, dollars 24,000,000 was to fund the conversion of seven further sites to the group's postgraduate exclusive product. The product design with postgraduate needs in mind with larger fully contained rooms designed for dual occupancy less social amenity space and well located for ease of access to the universities. To date, we have completed the acquisition of Tatten House in Manchester, This 136 bed all studio scheme was acquired in December 24 for $19,750,000 The property is located opposite our existing Victoria Point Hub site and close to the University of Manchester. Allowing us to unlock clustering benefits immediately whilst presenting refurbishment upside and future potential to expand the site through development, more on that from Duncan shortly. This operational asset is expected to deliver a 7% yield from September 2025. The second acquisition is currently under offer and in advanced due diligence. And anticipated to conclude shortly We will provide a further update once this is concluded. Preparatory work for postgraduate conversion is ahead of original plan, with three existing sites in progress and over £10,000,000 on track for investment in 2025. [indiscernible] Furthermore, our academic year twenty five-twenty six sales program has been amended to of a further four sites during 2026.

And we continue to expect these refurbishments to deliver unlevered IRRs of at least 12%. [indiscernible] Here we set out the key buckets where CapEx is planned for investment through to the end of twenty twenty five. Good progress has been made this year with over £25,000,000 invested. Firstly, in respect to undergraduate refurbishments, over £10,000,000 has been invested primarily toward one of our larger properties in Southampton, which was closed for the duration of the twenty twenty three-twenty twenty four academic year to facilitate a full building refurbishment reconfiguration and alongside fire safety, and decarbonization work. Upon reopening in September, the scheme delivered an increase in average weekly rents of over 50% compared to its pre refurbishment year of operation. This performance surpassed our and an IRR in excess of target at 12%. Another great example of the attractive returns refurbishments done well can deliver for us. Dollars 13,000,000 was invested in our Fire Safety Works program during the year and we now have 73% of the portfolio certified. The pound for pound deduction for the residual cost of these works is fully reflected within our valuations and we remain comfortable with the overall cost of this program. Dollars 2,400,000.0 has been applied towards green investments in the year with good progress made on our key ESG objectives, which I'll discuss shortly. [indiscernible] Turning next to debt and liquidity.

During the first half of twenty twenty four, we completed £125,000,000 seven year refinancing consolidating four small near term facilities and removing refinancing risk until 2028. The facility provides for a significantly lower overall ICR covenant and greater flexibility with respect to the use of the security pool. Weighted average maturity has been extended to four point seven years with all drawn debt currently fixed or subject to an interest rate cap, which will provide some benefit should interest rates continue to fall. Next, a snapshot of our ESG progress in 2024. I'll just highlight a couple of key achievements and also targets for the year ahead. In our net zero strategy, we set an interim target to have 50% of the portfolio rated EPC B or better by 2025. Is a target we have achieved earlier than planned with 64% of the portfolio now achieving the standard. Furthermore, our energy intensity per bed has reduced 3% this year demonstrating good progress in these core pillars of our net zero strategy and evidence that our green investments are beginning to deliver reduced consumption, and with it associated cost savings, Our ambitious on-site decarbonization plan targets achieving fossil fuel free status across 40% of the portfolio by the end of twenty twenty five.

In respect to health and safety, we've delivered a new loan worker which during the year ahead, we will seek to install external defibrillators at appropriate sites where they are not currently available within the near vicinity. The mental health and well-being of our [indiscernible] will always be a key priority for the business, and we were proud to have our efforts where we were awarded the accolade of best student well-being. In the forthcoming year, we will seek to further grow our collaboration with universities on this important topic. In 2024, we launched our apprenticeship scheme and developed a bespoke future leaders program for the rising stars within our business. In 2025, alongside the now annual Sustainability Awareness campaigns, we will seek to improve recycling plans at all our sites providing our people and our customers with the knowledge and opportunity to make a real difference in waste diverted from landfill. Now on to the outlook for the year ahead. [indiscernible] Despite a return to pre COVID booking patterns, continued increase in student application numbers, the growing cohort of 18 year olds, and significantly greater focus on international recruitment by universities continues to provide confidence that we will again secure occupancy rates of 97% or above, with rental growth of around 5% for the forthcoming twenty five-twenty six academic year.

We expect costs to remain broadly in line with 2020 with higher compensation related costs on the horizon and our historic energy hedge having now expired and rebased we expect the rate of improvement in gross margin to be somewhat tempered and hold at around 70% during the year ahead. The decision to terminate joint venture discussions in favor of our independent growth strategy has precipitated a review of the resources that were established in its anticipation. And we expect, therefore, only a modest overall increase in administrative costs during 2025. With downside risk protection in place, finance costs are expected to remain at 4.5% for the year ahead. We are currently letting around 7,650 beds for the next academic year starting September, with our refurbished with our refurbishment work largely planned during summer vacant Finally, the Board was pleased to be in a position to declare a dividend in excess of its initial target in 2024. [indiscernible] We remain committed to a progressive dividend policy and will therefore initially target a minimum dividend of 3.7p in 2025 and we'll again revisit this as the year progresses. That brings to a close my part this morning's presentation. Thank you all for joining us.

And now back to Duncan.

Thank you, Donald. The latest UCAS undergraduate applications data for academic year 2526 shows growth of 1% with domestic students up 0.5%. Non EU international applications grew by 3.1% despite what was widely reported in the media. Within the International Undergraduate Group, American, Indian, Singaporean applications are all up. And our largest CADRE, Chinese applicants, increased by a bumper 8.9%. This shows the compelling attraction of a UK student experience despite the changes in visa rules. For several years, we've seen a flight to quality amongst students, and there is no exception this year with applications to the higher tariff universities growing 4.3% at the expense of the lower tariff ones which declined by 3.2%. This increasing polarization validates our strategy of focus, on top quality universities as we attract better funded students, seeking modern, homely, high quality accommodation in prestigious, locations. With speculation in the media about the fall in international postgraduate applications, due to dependent visa changes, we might have expected a significant reduction. However, postgrad numbers in the higher tariff universities that we serve remained stable. And above pre COVID levels. As predicted, there were large falls in applications to lower tariff universities were favored by the students most affected by the cessation of dependent visas.

But this has had no impact on our business as we do not serve them. Post grads grew two percentage points of our showing we've grown market share as our focus on this key customer segment grows. The proportion of international [indiscernible] grew to 69% our strongest ever. Our Chinese customer base was very strong. Representing 40% of total customers and pleasingly our other international customers grew from 18% of the total to 29%. Showing our marketing strategies and product appeal are impactful. This growing and diversified student demand profile, particularly in higher tariff locations, is set against only 20,000 new PBSA beds delivered in the last two years. And a significant reduction in HMO at buy to let housing stock. This means demand for our accommodation is good. And we are effectively full for a third consecutive year and anticipate the same for '25 Let me remind you of the key for the last four years. Made good progress on each of these, But today, I'll just focus on some to explain the advances made. We first presented our portfolio segmentation in March 2021. Four years on, I'm pleased to say it's no longer relevant. [indiscernible] Our disposal program is complete although you should expect to see ongoing prudent portfolio management as we continue to optimize our cluster management strategy and our focus on aligning with top quality universities.

As you can see, we've exited six cities and remain in 23. We'd expect further concentration over time, as opportunities arise to consolidate around the top tier universities and grow our alignment above 90%. Today, 97% of our portfolio are in prime or super prime real estate markets. Growing cluster quality and density through operational site acquisitions asset transformation, refurbishment, development through planning enhancements, forms our ongoing process for continuous portfolio improvement at growth. Since launch, this has delivered strong uplift in valuations, like for like rental increases, and attractive IRRs. As part of this, we brought about product innovation and differentiation. For example, our Postgrad by Hello Student brand. After successful pilots, this is now in rollout phase, with 16 conversions of existing sites to be included in our capital program. We often see many development opportunities in real estate that few others want. Offices, retail, dilapidated apartments can suit us well. With only modest competition even in prime locations. To exploit these growth opportunities, we successfully raised £56,000,000 in quarter four twenty twenty four by issuing new equity, in a well supported process. With a commitment to shareholders that we'd acquire at least two new operating assets and hold on to the compelling returns, from our conversion to our postgrad assets.

This process is on track. And we completed the first of the asset acquisitions on time as promised, and expect to complete the second shortly. Tatten House in Manchester lies directly opposite our existing Victoria Point site. It has three one hundred and thirty six excellent oversized studio bedrooms but no amenities, making it the perfect complement for our well amortized adjacent Victoria Point offering providing all students first class facilities immediately. It brings instant margin enhancing cluster benefits plus the opportunity for a refurbishment IRR boost in Ducors. There's also development potential add a further 40 beds on the underdeveloped rear of the site providing yet more upside. We're very pleased that our planning application for a three ten bed extension and refurbishment of our Victoria Point cluster was approved in full This consented scheme will unlock significant value and we're considering delivery options. Including a phased development allowing the site to remain operational, in part throughout. This overall master plan will be the most significant undertaken in our ten year history. Combining our in house development of refurbishment expertise, and we're currently considering funding options. [indiscernible] We've delivered significant shareholder value through our extensive refurbishment program. And an excellent example of that is Brunswick Apartments in Southampton.

We closed the site for a year and completed all fire safety works, decarbonizing programs room upgrades, reconfigured more rooms to studios and centralized the expanded amenity spaces with a very impactful redesign. This building with rents 50% higher than pre closure. And is delivering a refurbishment IRR above 12% with outstanding feedback. [indiscernible] 2025, outside of the postgrad program, [indiscernible] will refurbish a further two assets with more than two thirty beds plus abilitators and drive our net zero pathway [indiscernible] whilst completing any associated fire safety works as we go. As mentioned, our capital raise has allowed us to fund our post program. Seven sites will be completed within the coming two academic years, including three for academic year twenty fivetwenty six. 17% of the portfolio comprised assets with the potential to convert to our Postgrad by Hallo Student brand. We see a bright and growing future for this differentiated segment leading brand.

With an in house revenue management platform, marketing and dynamic pricing, we've delivered significant improvements in revenue occupancy since academic year 'nineteen-'twenty. We're very pleased that revenue for academic year 'twenty two, 'twenty three and 'twenty three, 'twenty four reached a post COVID catch up of 99%. And for academic year '24, '25, this has reached 97% a level we'd consider effectively full and sustainable. We also delivered a like for like rent increase of 7% for academic year twenty fourtwenty five, a very strong performance given falling inflation and prior year double digit rental growth. Academic year twenty five-twenty six bookings are returning to pre COVID patterns that we believe will most likely be the pattern for the future. And this includes another strong rebooker performance following an early launch date, that helps reduce customer acquisition costs and validates value. This normalization of the booking cycle while still ahead of the last pre COVID academic year of twenty nineteen-twenty twenty and the current strong rate of demand leads us to anticipate being effectively full again in academic year twenty five, twenty twenty six, assuming a conducive geopolitical environment. With rising rents, our customers expect an increasingly high quality experience, a good value for money.

Therefore, our drive for high standards of service and memorable customer experiences has never been more in focus. [indiscernible] measured as net promoter score, and this in turn allows rents to support sustainable increases. The record proportion of eligible rebookers choosing to remain with us shows our offer is attractive and good value. We're continually improving our check-in processes and our app is making a significant impact on customers' ability to communicate with us and in driving up our service responsiveness. We also launched brand new website, We've developed a new Events and CRM program to further engage customers in our community. Recognizing the cultural mix in our buildings, and creating a homely, engaging, and fulfilling stay with us. We're pleased that because of these, many other improvements our autumn net promoter score has risen to plus 32, which is significantly above our peer group which is at plus 19 and ahead of our twenty twenty three NPS. Our rebooker rates are also at record levels, with 53% of those eligible booking another year with us. An all time high rate Great service is only delivered through capable, well motivated people, and we've continued to invest in them. We launched a new development of personal growth plan, with internal promotions now providing over 60% of all non entry level vacancies.

Having invested in communications and well-being programs, our colleague engagement is strong at nearly 80%. And our retention remains high also. At nearly 80%. Recent unforeseen cost pressures resulting from the October U. K. Budget will inevitably impact our people cost. And together with our decision not to produce a joint venture, has meant we're pursuing efficiencies and looking to technology shifts to keep our costs tightly managed. So in summary, our plans are focused on delivering continually improving and sustainable shareholder returns. [indiscernible] Our strategy and ever improving operating platform driving performance. We've delivered strong and sustained occupancies like for like rental growth and good margins. To date, we've deployed the raised capital on plan completed one acquisition, with a second expected to follow shortly. [indiscernible] postgrad refurbishment and conversion program has been accelerated as promised. Our proven cluster management strategy the success of our Postgrad product planning enhancements and refurbishments, are all delivering attractive growth and IRR opportunities. We've made good acquisitions in line with our promises and have an encouraging pipeline. We completed the disposal program and our year end LTV was at a record low protecting shareholder interest in this challenging market. We expect to pay a minimum dividend of 3.7p this year, fully covered and it is progressive.

In conclusion, our transformation has substantially delivered and is generating the performance metrics that we promised. The opportunity ahead is to drive home the advantages gained and continue to grow. Thank you very much, and we'll now be happy to take your questions. John Keil from Stifel. Thanks for great presentation. Just wanted to ask really the dividend guidance that you've given every year is a minimum usually of what you've paid last year and that's fair enough. I just wonder how does that conversation go between you and the Board that presumably you'd give them a presentation like this where everything is going in the right direction, everything. Debt cost is finalized in the best sector that you could probably be in. Except occupancy rents going up, etcetera, etcetera. You say, right, well, what will we tell the market on dividend? Of, well, at least the same as last year? So it feels a bit like a shoulders down moment, and you really don't need to do that. You see what I'm getting at? Why not be what I'm not expecting you to change this year's guidance but why not just be a bit more optimistic?

I guess partly I belong to the surprise and delight philosophy of life. As does Donald. But I think the non sort of flippant answer would be, is always uncertainty in the world. We have unlike most businesses, we have a long booking cycle. And at the time of presenting today, we are about halfway through that booking cycle. As we've indicated, we're very confident and every indication is that we'll complete the booking cycle with a 90% occupancy, but that's never a certainty. Of course. And we would always want to deliver the promises that we make to our shareholders. And therefore, when we look forward, we will take a view on the conservative side of ensuring that we deliver and then hopefully with the ability to deliver a little upside. I would, of course, remind that as a REIT, our dividend is a relatively a fixed formula. So that this is not an entirely discretionary formula for the Board. We will be distributing according to the PID payments that we have as a REIT naturally, of course. So that's something that people can clearly calculate. But the philosophical point, John, I understand.

Good morning. It's Matt Empiric from Peel Hunt.

Can I just ask about balance sheet capacity? You mentioned record low LTV. The slide shows how you're going to spend the money that you raised in the final quarter of last year. I'm guessing beyond that though, the balance sheet has given you scope to potentially invest more and is that the case? Could you put a number on it and perhaps sort of talk about the options available for that surplus? Investment capacity? Is it more refurbishments? Is it acquisitions? Is it Victoria Point? [indiscernible] Sure. No problem there. 20% twenty seven percent LTV at thirty January think we must assume that the proceeds of the capital raise will be deployed. And you would expect LTV on that assumption to be around about 29% We guide LTV between 3035%. But I guess with interest rates the way they are, it's got to be quite a compelling opportunity to tap your debt. We do have the ability within our longer term fixed rate facilities to deploy disposal proceeds which are in the region of £30,000,000 So I think you can see that being deployed during the quarter 2025. Where is it going to go? I think the refurbishment plan and our CapEx program is is fully funded already.

So I think you can expect that to go towards acquisition opportunities and my money would go on operational acquisition opportunities. So immediately, income generating. [indiscernible] A couple for me, please. Interesting to see that Oxford and London University drop out your definition of super prime or prime universities in terms of the tail end of the scale there. NPS score 32 is very good, especially good against competition, but that's out of 100 though, isn't it?

Yes, it is.

Okay. Well, perhaps perhaps you could give some guidance on that. And then the dilution of 2.5% on that asset value instead of the joint venture. What would have the cost of the joint venture been compared to the dilution you've taken on the placing? And the implications seem to be in that comment just now, there seem to be an increase in people costs through the joint venture, which presumably would have been shared with somebody. So you could actually give some color on that as well, please.

Sure. Let me comment on the net promoter score. As you know, Mike, my background prior to joining Empiric was in hospitality. And I have been no public to say I would have been shot for an NPS of plus 32 in [indiscernible] One of the things I would say about our sector as opposed to retail and hospitality where net promoters score is a very commonly used measure of customer service is that in hospitality, you'll typically have a customer interaction that lasts about two hours. Maybe three if it's a long dinner. But in our case, our customers are with us for a year. And so the result of their evaluation on Net Promoter Score is one formed over many weeks and months. And of course, that reflects their experience in terms of not just the interaction with people, but also things like service, maintenance fixes and so on. So this sector has come from a relatively low start point in service and scoring I think what's most pleasing and most important is to see the relative improvements year on year. And I think, certainly my experience back into hospitality to take something from plus 10 to plus 30 with that level in the three year period is quite unusual.

And something we're proud of. But is plus 32 a place where we rest Absolutely not. There's competitive advantage there to be going much beyond that. For sure. On the JV, do you want to? Pick up Mike's comments on NTO?

So Mike, look, point 5% dilution. Not an insignificant impact on total return for this year. Point well noted. I think it's probably fair to say that the pricing on a joint venture wouldn't have been necessarily at book either. So there would have been an element of a discount there. Ultimately, the Board needed to take a view as to whether or not the final terms on a joint venture discussion were in the best interest of shareholders. It was concluded that actually the more independent approach based on the share price that we managed to raise at was simply in the best interest to keep the business significantly more streamlined and simple. I think you also asked about London, I'll leave that one to you.

The London and Oxford the reality is those are fantastic markets if you could get a a strategic position in them. Oxford and Cambridge, obviously, two of our best universities. The real estate for accommodation is virtually exclusively owned by the university. And as the Vice Chancellor told me at a dinner fairly recently, we've owned since 1350, we're not about to sell it. So I think there's a purely practical reason why those are market we can't get in. The property that we did have in Ox didn't serve the University at Oxford, it served Brooks. And it was a solo small building with very low efficiency. Similarly, in London, it's extremely hard to get a cluster of buildings located together near one of the prime universities as per our model. If we could do so, we would love to. We see plenty of value opportunity in there, but the practicalities are it's very hard to find a speedy pathway to acquiring that level of real estate. Over a meaningful period of time. And therefore, we concentrated on other markets it's purely practicality. [indiscernible] The other end of the scale, you're in Manchester, significantly your largest market, and it's a very good town.

And multiple further education sort of establishments there. Are you at risk of going overweight because you're buying now in Manchester again, aren't you? So is there a ceiling at which you want to be exposed to any of these one markets?

Yes, it's a great question. We will have our first over 1,000 bed market. And when you compare that to the size of the university, we are still a minnow in our market share for providing a combination in that university And of course, this is a university that's significantly investing in its own asset base and its own faculties. So we're seeing planned future growth for Manchester. So at the moment, we see absolutely nothing but upside in Manchester. But there is an interesting question in there, Mike, which is what is the maximum size of a cluster that you can have The truthful answer is we don't know, but we will let you know where we find it. But thus far, in most of our markets, we would consider ourselves to be certainly subscale.

So we have a couple of questions online. I've got one from Mike from Symmetra. First, there's a few questions here. The first one, for the refurbishment works, how many years on average is the cycle I think it's fair to say, Mike, that we would typically do this over the course of one year. We would ordinarily when refurbishing a building, sell it short for the academic year ahead Depending on the amount of work that needs doing on the site, we'll either sell it for forty four, forty eight weeks rather than the standard fifty one weeks. To provide us with a window of eight, ten, twelve weeks to complete the refurbishment. Question two was what do you need to do to improve your target IRR on refurbishment works closer to market standard, I. E. Above the 11% target? Look, great question. We're very much focused on this, especially where interest rates are at the moment, trying target the upper end of the return range. I think you see that this year with a real focus on postgraduate refurbishments, which typically deliver the higher returns, We say 12% is our target there and that's very much we are focusing our efforts in 2025.

And I think as well, Mike, it's worth noting that the Brunswick Apartments refurbished that we referred to in the presentation, did beat our target of 9% to 11% was certainly well above that.

Question three, how much of the refurbishment works are taken on a rolling room basis during the term to maximize our ROI and what is stopping increasing this? Look, we do that. We'll either do a summer refurbishment or we'll take a rolling refurbishment program. Of course, if we roll, we're taking rooms out for a full academic year as we move through the building. Our customers in the buildings. We typically take out a floor rather than working on a floor which has students in situ. This year, looking forward, the refurbishment plan is primarily summer. We don't have many rooms out for the full year at all. [indiscernible] And your final question, Mike, was for fire door inspection maintenance and installation works. Are these being combined where possible with room refurbishment works to improve improve ROI? Absolutely. We would always look to combine these works when we're intervening in a building. Second question from Bjorn. Hi, Bjorn. Pamir Libram, Question one, can you run us through what has offset revenue growth considering like for like was 9% versus revenue growth, headline revenue growth versus a 5%. It just disposals? Beyond Slide seven is probably where I'd direct you Yes, it's disposals, but also the impact of capital works.

We did have some rooms out for the for the duration of this year, primarily this building in Southampton. So that did have an impact on on headline revenue as well. Question number two, other admin costs increased by circa 600,000 Is that line item purely the abortive JV cost? Look, we did have abortive JV costs in the region of £500,000 but otherwise, the underlying growth in admin costs was simply the impact of inflation across 2024. Remember, we tipped the 11% during 2023. So that is now impacting the first full year in 2024. So yes, there's an underlying inflationary adjustment as well. And beyond your next question or final question, can you run us through all the one offs one off costs to strip out of your EPS calc to get a more recurring EPS number. Actually, the number of four 4.2p is a recurring EPS number. You're allowed now to strip out one off costs. But for transparency, there's only two. They talk to £1,500,000 £1,400,000 as the aborted JV costs 500,000.0 and nine hundred thousand of costs associated with the refinancing done in the first half of 2024. Another question just come in from Andrew, time investments.

Your question is valuation growth slowed in the second half twenty twenty four. Does this tend to be a pattern for valuers because the booking cycle or did they become more cautious? Great question. The value is there'll be many strands to the answer here, but the main the main issue here is that the values typically look forward to the next academic year and take our income assumptions where we have secured occupancy above 80%. Where we haven't done so, and I think you see in the graph there, we're sitting around 50% currently, They use their own income assumptions, which are typically a little lighter than our own. And so what you can expect to see is potentially a bigger tick up in the first half valuation from a [indiscernible] from an NTA perspective as they recognize then the fact we'll be much more advanced in our sales program and they will have no choice but to adopt our our rents. I think that would be it. Can I just ask more strategic question about and [indiscernible] the acquisitions that you can do on balance sheet are not really the dial a huge amount in dropping that more [indiscernible] kind of acquisition type kind of deals that you can do that can add meaning number of properties to the to the group will help you drop that down kind of considerably rather than just kind of small increments It's hard because of where the share price But Is there an opportunity for do do any kind of share share time?

Deals [indiscernible] Yes, that's a great question. And you put your finger on exactly the number of the strategic option for the business. So that is we are subscale and growth is is exactly the right route to leveraging those relatively fixed overheads. [indiscernible] describing, making sure those overheads are as efficient as they possibly can be and hence going through the exercises we are at the moment to improve our efficiency to make sure that that basic administrative cost does not grow beyond that which it needs to be. And much more importantly though, getting growth through acquisition of more assets. And there's a few routes to doing that. One, we already explored last year, which is potentially to form a Torva joint venture. We decided in the end, it was better value shareholders to go out and raise capital on the market, which we did in October. But we don't discount other routes to getting growth into the future and that could leverage the business certainly. The second thing is if the markets are suitably inclined, which at the moment challenging, but one would hope in the not too distant future will change, then further injections of capital into the business of the nature that we've done would be something we would like to do.

And most importantly of that is that we are seen to [indiscernible] cost ratio as you rightly say, as well as obviously all the margin benefits that go with that scaling. And are there other strategic options available? There are always other strategic options available, though they're not exclusive. They're under our control. And those are things that, of course, we would consider doing if they were appropriate. The interesting thing of course in the PBSA market is there are are already two listed companies and everything else is in private hands. And therefore, those discussions become much more complicated with that with that nature of ownership. But scaling this business and using the benefit of its now, as I hope you would say, very efficient operating platform across a greater asset base is absolutely the number one priority. Do we have any more questions?

Nothing more online now. Nothing more along, in which case, thank you very much indeed. We really appreciate everybody coming. And we appreciate your support. Thank you so much.