Student Living boosted by payout from UWI
REAL ESTATE stock 138 Student Living Jamaica, 138SL, climbed more than 15 per cent for the month since its fourth-quarter results surprised the market, with a reported profit of $72.2 million, but then lost some of its momentum on Thursday. Revenues for the quarter ending totalled $373 million, a 110 per cent gain compared to the corresponding period last year. And earnings per share more than tripled, from five cents to 17 cents. The company, which became operational in 2014, is in the business of developing and managing dorms at The University of the West Indies, under concession from the Mona campus. The audited results are pending, but the preliminary numbers puts 138SL’s yearly revenue just above $1 billion and profit at $11.8 million or three cents per share. That compares to revenue of $834 million and a loss of four cents per share in 2018. Ian Parsard, who became chairman of 138SL in July, told the Financial Gleaner that the gain in the fourth quarter resulted from the settlement of a claim related to Irvine Hall, one of projects it worked on. “This resulted in an increase for fourth-quarter revenues and operating profits,” he said. The claim was not a courtadjudicated settlement, explained Parsard. Rather it was part of 138SL’s administration of an existing concession agreement with UWI. Under the agreement, 138SL has certain guaranteed returns and conditions. If these are unmet from normal operations, then 138SL can claim for the difference from UWI. In its September quarter earnings report, the company also disclosed in its expenses a $54.2 million arbitration award over a dispute with Prime Developments, the contractor hired for the first phase of the dorm developments in 2016. Without the court settlement to Prime, earnings would have grown even further. 138SL rents to students when classes are in session and shortterm visitors, such as travellers, during semester breaks and other off-peak periods. The company holds $11 billion in assets and $5.5 billion of equity. Parsard said 138SL could announce new developments and plans in the 2020 financial year. “Opportunities are under consideration, but it’s too early to make a firm decision,” he said. 138SL closed trading down at $3.92 on Thursday, but the stock is still up 20 per cent for the quarter. steven.jackson@gleanerjm.com