The 138 Student Living Jamaica Limited has only once paid dividends to holders of its common stock since its listing nearly a decade ago, but now the company says it plans to start making regular distributions.
The announcement comes amid plans to pay down a portion of its $4.2-billion debt utilising some of the proceeds from the sale of shares that was concluded in late October.
138SL listed on the stock market in 2014 as a start-up developer and operator of student housing on the Mona campus of the University of the West Indies. Since then it has paid dividends once – 13 cents per share totalling nearly $54 million in February of this year.
In a statement, 138SL Chairman Ian Parsard said going forward, the company would pay half-yearly dividends “of up to 90 per cent of its distributable profits”. Its annual earnings in the past three years has ranged from $220 million to $318 million. Its most recent financials show that year to date ending June, the company collected revenue of about $1 billion and made a profit of $270 million.
The company is bullish on business, saying the current academic year which kicked off in September has seen an increase in demand for dorm rentals, and that the UWI Mona campus could potentially accommodate a 60 per cent increase in room stock, or an additional 842 rooms. Currently, 138SL offers long- term student accommodation in 1,464 rooms, and short-term rentals in 72 rooms under two concession agreements with UWI Mona.
The additional public offering of shares was priced to raise around $3 billion. 138SL offered up to 770.96 million more shares at prices of $4.05 for existing shareholders and $4.40 for other members of the investing public.