investegate.co.uk - Investor event today

investegate.co.uk - Competition and markets authority approval

Please read the above announcements yourself to get the facts. My own take:

1. CME (competition authority) seem to have cleared the acquisition of Empiric unconditionally and earlier than expected? I wasn't expecting to hear anything till next year. It removes this issue as a distraction to the business and also as an ongoing 'risk/uncertainty' factor for the market narrative. Good and good.

2. Regarding the 2026/2027 academic year, they say they expect rental growth to be 2-3% vs the 4% seen in the current year. (Most of their contracts are linked to inflation, and inflation is not rising so quickly. Lower occupancy has an effect on the non-linked contracts). On balance, I'm leaning towards 'neutral-ish' here.

3. Earnings estimates for FY2025 are unchanged. Good.

4. Earnings estimates for FY2026 are expected to be 7-10% lower due to "lower occupancy, property activity, and rising finance costs". But, this appears to be short-term frictional effects rather than decline. Bad.

5. Dividends per share will not increase for FY2026. Bad, compared to most of their history, understandable, but bad.

6. Return to earnings growth in 2027. Matches projections from earlier in the year in the investor presentation for the Empiric bid where they described the bid as accretive to earnings in 2027. Neutral.

7. Acceleration of disposals to enable buybacks. With net asset value about 2x the share price, I'm delighted to hear this. Excellent.

8. Occupancy projections for FY2026 at 93-96%. Neutral or slightly bad? 96% would be better than FY2025, 93% would be disappointing.

On balance: for me, this set of announcements is neutral. I am not happy about the earnings projections downwards for FY2026, but I am delighted that uncertainty about the acquisition will no longer interfere with business operations, and that they'll do buybacks funded by sale of assets. The drop in earnings for FY2026 seems likely to be from frictional short-term effects relating to e.g. asset sales and the acquisition rather than general business decline.

The price spiked briefly downwards to 510-520p this morning for a few minutes, then rose to 530p.

I have purchased some additional shares at 530p by selling off some other REITs that rallied in the last few days. I feel the bad news is being dumped all at once here and there are compelling signs of good news to come.

If anyone sees any errors in what I've written above, or anything I've missed from the announcements which is important, or if you take a different view on any part of the announcements, I would be interested to hear it.

TRS.