Pre seen/ Industry Analysis

Question 1

Describe FLATTHALLS revenue ?

Answer 1

735 million in 2023, up 15.6% from 636 million in 2022.

Question 2

What happened to FLATHALL Groups direct costs in 2023

Answer 2

Grew by 34%. Reason not clear but possible reasons could be high material inflation along with supporting revenue growth. (However, revenues only grew by 15.6%)

Question 3

What happened to FLATTHALL’s operating expenses in 2023 ?

Answer 3

FLATHALL managed to reduce operating expenses by 38%, leading to EBIT growth, reason unclear.

Question 4

What happened to FLATHALL’s profit for the year?

Answer 4

FLATTHALL managed to see growth of 19.5% and an increase in net margin by 3.3%

FLATTHALL Groups management were able to reduce operating expenses to reduce the impact of increased direct costs. DUVETT where unable to do the same, this is only 1 KPI however, staff turnover would be interesting to compare.

Question 5

Describe FLATTHALL’s financial position?

Answer 5

Leverage at 27.6 % in 2023, up 17.4% ? from 23.5% in 2022.
Additional 0.6m on loan balance assumed to fund construction works.
Interest cover is strong at 2.5 times
Large amount of PPE relative to debt indicating good security for future funding.
PPE to long term debt ratio of 28%
Positive NAV growth of 8.54% having also issued annual dividend.
Div payout ratio of 37% indicating plenty of retained earnings for future investment
Strong Div cover of 2.7
27million cash position

Question 6

What is FLATTHALL Groups ROCE

Answer 6

5.53%, up from 4.90% in 2022

Question 7

What is FLATTHALL Groups Div payout ratio and Div cover

Answer 7

37% payout ratio
2.72% Div cover

Question 8

What is FLATTALLs current liquidity position in reference to current ratio / interest cover

Answer 8

0.43 current ratio
0.17 cash ratio
2.5% Interest cover

Question 9

What is FLATTHALL Groups current cash position / NAV

Answer 9

Cash - 27.3 million
NAV - 10301 million with net asset growth of 8.54% from 2022

Question 10

Industry KPI’s ?

Answer 10

Accounting return
EPRA NTA per share
Occupancy rates
Loan to value ratio (rather than D/E)

Question 11

Describe FLATHALL’s Gross margin ?

Answer 11

Fell 2% from 86% to 84%

Question 12

Describe FLATHALL’s Operating Margin?

Answer 12

Grew 4% to 76% up from 72% last year

Due to operating costs decreasing 38%?

Question 13

Describe FLATTHALL’s working capital position?

Answer 13

Current and quick ratio’s of less < 1 doesn’t show the true picture due to timings and frequency of income and large construction work. Ie small amount of rental invoices due at month end compared with large construction bills.

The working capital cycle is overall negative indicating good liquidity. check working capital cycle ?

Question 14

Flathall strategy

Answer 14

Strategy is what keeps the business model relevent to the current ecosystem.
That’s the connection
CGMA business model framework integrates strategic and operating models

The businesses model should be able to respond to changes in the ecosystem?

Examples for Flathall?

Room timeshare model
Increased regulation
Student mental health ?
Society .. LGBTQ?
Travel habits inline with green/ sustainability targets .. public transport
Tenant law, leasehold reform etc ..
accommodation build targets & supply / demand equilibrium
Advanced technology…. App development for operations
Student demand … cinemas / deliveroos etc / gyms

Question 15

What is Flathall’s mission/ vision statement ?

Answer 15

A commitment to quality enables Flathall to maintain a strong brand that attracts students and enables the company to develop relationships with academic institutions.

Flathall aims to grow steadily through the acquisition of new buildings that will enable it to remain the market leader in PBSA in Towland.

Question 16

Approximately, how many home country students still live in parental homes ?

Answer 16

840,000 = 2.1m *.40

Question 17

What percentage of the PBSA market do FLATTHALL currently house?

Answer 17

78,000/ 297,600 = 26%

(PBSA = 16% of total market)

Question 18

How many students currently occupy PBSA in TOWLAND ?

Answer 18

2.1 - 840,000 = 1.26m, + .6m *.16 = 297,600

Circa 300,000

Question 19

How many students are there in the private rented sector (HMO,s)?

Answer 19

1.86m * .51% = 948,600

Circa 950,000

Question 20

How many students currently occupy halls of residents ?

Answer 20

1.86m *.33% = 613,800

Circa 614,000

Question 21

How many students do leading competitor Duvet house?

Answer 21

59,000

Question 22

How old is Flatthall ?

Answer 22

Founded 30 years ago

Question 23

Describe DUVETT Groups revenue ?

Answer 23

Grew 19%

547 million in 2023, up 19.06% from 459 million in 2022

Question 24

How many students can Flatthall
properties accommodate and how
many students needed
accommodation in the 2022-23
year?

Answer 24

78k

&

1.86 million

Question 25

Which team at Flatthall has most responsibility for ensuring buildings adhere to safety regulations?

Answer 25

Property portfolio management team

Question 26

Which head office teams deal with the concierges?

Answer 26

Concierges & cleaners report to, and are supervised by operations. However, they work closely with Customer service as it’s here they report more serious issues

Question 27

Who is responsible for the Flatthall website?

Answer 27

IT department CS responsible for content No marketing team

Question 28

What opportunities exist for Flathall?

Answer 28

- New market developments (luxury rentals, overseas market, postgrad rentals. - Development in new technology (smart heating etc) / tenant app - Development in building materials (EPC) - Expansion via acquisition, construction firm - Scope for increased rental ie summer - Scope for multifunction accommodation / Cinema, Gyms, supermarkets - Improvements in Risk management governance change management decision making techniques budgeting / cost control

Question 29

What are key threats to flathall?

Answer 29

failure to control rising costs failing institutions reliance on economic stability for revenue increased online learning change in preference / en-suites etc Security / data breaches

Question 30

How could Flathall improve ESG?

Answer 30

Partner with a leading consultant that specialises in a sustainability strategy service.

Question 31

How could Flathall improve yields and optimise voids?

Answer 31

Via a flex rental strategy due to evolving property management software, allowing them to adjust to high and low periods of demand ie summer months.. would need a change in planning law however. Or offer short term rentals for other students to holiday?

Question 32

How could Flathall mitigate rising costs of utilities and improve energy use?

Answer 32

Via centralised heating controls or a building energy management system designed specifically for student accommodation. It's important not to restrict the heat available but to avoid unnecessary energy consumption.

Question 33

How might Flathall improve the efficiency of buildings?

Answer 33

via sustainability features including triple glazed windows, high levels of insulation, air tight buildings and a mechanical ventilation system. As a fossil fuel-free development, any heating required will be generated by air-source heat pumps and electricity from solar panels. Partner with low energy accreditor (passivhaus)

Question 34

How might Flathall improve data security?

Answer 34

PCI DSS Payment card industry data security standard

Question 35

How could Flathall mitigate cyber security risk?

Answer 35

- outsourcing to cyber security firm - Increased budget - Increased training via professional development - Warnings of scams (phishing/ deepfakes)

Question 36

What things could impact student design preferences?

Answer 36

socio demographic determinants such as income age education nationality

Question 37

What amenities does recent research suggest students prefer?

Answer 37

Wifi Laundry utilities furniture parking study facilities dishwasher

Question 38

What partnership oppertunities exist for Flathall?

Answer 38

Unlimited in the sense that anything that applies to life Mental health support Wellbeing Fitness Groceries Social events Transport perks or initiatives hygiene good practice / products Food services .. takeways Meal prep suppliers

Question 39

Whose heads operations for Flathall?

Answer 39

Dai Linlin

Question 40

Who do you report to ?

Answer 40

Susanna - senior finance manager

Question 41

Who is Flathall’s finance director ?

Answer 41

Marina Delgado

Question 42

Who Is head of customer service at Flathall ?

Answer 42

Hamid Abbasi

Question 43

Who is the property portfolio director ?

Answer 43

Taisha Abbot