138 Student Living Limited is seeking new revenue sources as the company continues to be impacted by the COVID-19. These include engaging the government about use of its facilities for quarantine for returning Jamaicans.
A disclosure signed by company chairman Ian Parsard states, “In its response the COVID-19 crisis, the management of 138 SL has taken the necessary steps to align the business with current realities.”
These actions include but are not limited to consolidation of remaining students on one building of each hall of residence, thus reducing utility and staff costs which are mainly security and housekeeping.
The company reduced staff costs between 30 to 35 per cent, but said it has not laid off anyone.
It also deferred capital expenditure for the rest of the year and reduced maintenance spending to only essential activities.
The company said discussions have been held with its bankers and financiers to ensure that operations can continue to be sustained.
The school operates halls of residence under companies 138SL and 138LR which are governed by concession agreements from its partner the University of the West Indies. The concession guarantees 90 per cent occupancy.
The company indicates that it continues to discuss with the University the resumption of face to face classes and the health protocols which will be required when this occurs.
Since March 2020 the company has been faced with finding new sources of revenue when thousands of students left the campus under COVID conditions.
138 Student Living Limited, which achieved $1.05 billion in revenues in the year ended September 2019, had been projecting a further 20 per cent growth in the 2020 financial year.
The real estate company which operates around 1,460 rooms over four halls, benefitted during the last year from a variation in the rate of return for Irvine hall which was expected to positively impact results.
Average occupancy across all three halls for December 2019 quarter was 99 per cent.
For second quarter March 2020, the group recorded a profit before taxation of $261 million with an after-tax profit of $270 million.