LSE:DIGS

Stock Analysis Report

Executive Summary

GCP Student Living plc was the first real estate investment trust in the UK to focus on student residential assets.

Rewards

PE ratio (8.6x) is below the UK market (18.5x)

Revenue is forecast to grow 7.82% per year

Earnings grew by 52% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -12.1% per year for the next 3 years

Unstable dividend track record

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Proven track record second-rate dividend payer.


Similar Companies

Share Price & News

How has GCP Student Living's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DIGS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.3%

DIGS

2.5%

GB REITs

1.4%

GB Market


1 Year Return

36.3%

DIGS

16.9%

GB REITs

12.4%

GB Market

Return vs Industry: DIGS exceeded the UK REITs industry which returned 10.7% over the past year.

Return vs Market: DIGS exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

DIGSIndustryMarket
7 Day3.3%2.5%1.4%
30 Day6.5%2.1%1.8%
90 Day17.4%3.6%8.8%
1 Year41.6%36.3%22.1%16.9%18.3%12.4%
3 Year62.3%44.0%34.4%15.5%23.8%8.0%
5 Year119.2%78.6%29.3%3.6%41.8%8.9%

Price Volatility Vs. Market

How volatile is GCP Student Living's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is GCP Student Living undervalued compared to its fair value and its price relative to the market?

8.92x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DIGS (£1.98) is trading above our estimate of fair value (£1.6)

Significantly Below Fair Value: DIGS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DIGS is good value based on its PE Ratio (8.6x) compared to the REITs industry average (15.2x).

PE vs Market: DIGS is good value based on its PE Ratio (8.6x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: DIGS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: DIGS is overvalued based on its PB Ratio (1.2x) compared to the GB REITs industry average (1x).


Next Steps

Future Growth

How is GCP Student Living forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-13.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DIGS's earnings are forecast to decline over the next 3 years (-12.1% per year).

Earnings vs Market: DIGS's earnings are forecast to decline over the next 3 years (-12.1% per year).

High Growth Earnings: DIGS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: DIGS's revenue (7.8% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: DIGS's revenue (7.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if DIGS's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has GCP Student Living performed over the past 5 years?

33.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DIGS has a large one-off gain of £73.9M impacting its June 30 2019 financial results.

Growing Profit Margin: DIGS's current net profit margins are higher than last year .


Past Earnings Growth Analysis

Earnings Trend: DIGS's earnings have grown significantly by 33.8% per year over the past 5 years.

Accelerating Growth: DIGS's earnings growth over the past year (52%) exceeds its 5-year average (33.8% per year).

Earnings vs Industry: DIGS earnings growth over the past year (52%) exceeded the REITs industry -21.1%.


Return on Equity

High ROE: DIGS's Return on Equity (13.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is GCP Student Living's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: DIGS has a high level of physical assets or inventory.

Debt Coverage by Assets: DIGS's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: DIGS's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if DIGS has a sufficient allowance for bad loans.

Low Risk Liabilities: DIGS reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if DIGS has an acceptable proportion of non-loan assets held.

Low Risk Deposits: DIGS has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if DIGS has an appropriate level of bad loans.


Next Steps

Dividend

What is GCP Student Living's current dividend yield, its reliability and sustainability?

3.07%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.8%markettop25%5.0%industryaverage3.8%forecastin3Years3.2%

Current dividend yield vs market & industry

Notable Dividend: DIGS's dividend (3.17%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: DIGS's dividend (3.17%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, DIGS has been paying a dividend for less than 10 years.

Growing Dividend: DIGS's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (95.9%), DIGS's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DIGS's dividends in 3 years are forecast to be covered by earnings (88.5% payout ratio).


Next Steps

Management

What is the CEO of GCP Student Living's salary, the management and board of directors tenure and is there insider trading?

1.9yrs

Average board tenure


CEO

GCP Student Living has no CEO, or we have no data on them.


Board Age and Tenure

1.9yrs

Average Tenure

64yo

Average Age

Experienced Board: DIGS's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.3%.


Management Team

  • Nick Barker (39yo)

    Director of Gravis Capital Management Limited

    • Dion Di Miceli

      Head of Investment Companies - Gravis Capital Management Limited

      • Chloe Marlow

        Head of Fund Financial Control - Gravis Capital Management Limited

        • Saira Johnston

          Chief Financial Officer of Gravis Capital Management Limited

          • Tenure: 2.8yrs
        • Harry Daws

          Associate Director of Gravis Capital Management Limited

          • Paul White

            Fund Financial Controller


            Board Members

            • Robert Henry Peto (68yo)

              Independent Chairman of the Board

              • Tenure: 6.8yrs
              • Compensation: UK£49.28k
            • David Hunter (64yo)

              Non-Executive Director

              • Tenure: 0.7yrs
              • Compensation: UK£6.32k
            • Robert Naish (66yo)

              Senior Independent Director

              • Tenure: 1.2yrs
              • Compensation: UK£37.90k
            • Marlene Wood (57yo)

              Independent Director

              • Tenure: 4.8yrs
              • Compensation: UK£45.04k
            • Gillian Lyndsay Day (55yo)

              Non-Executive Director

              • Tenure: 1.9yrs
              • Compensation: UK£37.93k

            Company Information

            GCP Student Living plc's company bio, employee growth, exchange listings and data sources


            Key Information


            Number of Employees


            Location

            • GCP Student Living plc
            • Beaufort House
            • 51 New North Road
            • Exeter
            • Devon
            • EX4 4EP
            • United Kingdom

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            DIGSLSE (London Stock Exchange)YesOrdinary SharesGBGBPMay 2013
            DIGSLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMay 2013

            Biography

            GCP Student Living plc was the first real estate investment trust in the UK to focus on student residential assets. The Company seeks to provide shareholders with attractive total returns in the longer term through the potential for modest capital appreciation and regular, sustainable, long term dividends with inflation linked income characteristics. It invests in properties located primarily in and around London where the Investment Manager believes the Company is likely to benefit from supply and demand imbalances for student residential accommodation and a growing number of international students. The Company has a premium listing on the Official List of the FCA and trades on the Premium Segment of the Main Market of the London Stock Exchange. The Company had a market capitalisation of £670.9 million at 30 June 2019. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/20 22:02
            End of Day Share Price2020/01/20 00:00
            Earnings2019/06/30
            Annual Earnings2019/06/30


            Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.