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Half year results: Focus on quality and partnerships driving income growth – 26 July 2017

25 July 2017

The Unite Group plc, the UK’s leading manager and developer of student accommodation, announces its half year results for the six months to 30 June 2017.


Strong financial performance: increased earnings, dividend and NAV

  • EPRA earnings up 12% to £40.4 million or 18.0p (30 June 2016: £36.1 million, 16.3p)
  • Profit before tax £83.9 million or 36.7p basic EPS (30 June 2016: £122.8 million, 48.3p) due to lower level of revaluation surplus as a result of yield compression in 2016
  • Interim dividend increased 22% to 7.3 pence per share (2016 interim: 6.0 pence). Policy remains to distribute 75% of full year recurring EPRA earnings by way of dividend each year
  • EPRA NAV per share up 4% to 669 pence (31 December 2016: 646 pence)
  • Reduced leverage to 30% LTV with net debt at £696 million (31 December 2016: 34% and £776 million)

Highest quality income, portfolio and University relationships

  • 91% of rooms reserved at 25 July for 2017/18 (2016: 89%) at pricing that supports full-year rental growth of 3.0-3.5%, with 59% of rooms let under nominations agreements with an average unexpired term of six years
  • Increased alignment to strongest Universities and enhancement of portfolio following disposals of £472 million (Unite share: £181 million), generating a profit on sale of £5 million on a see-through basis
  • Acquisition of Aston University’s 3,100-bed student village for £227 million (Unite share: £113 million), enhanced by 2017/18 nominations agreement
  • Continued enhancement of customer service through ‘Living with Unite’ app and initiatives to address major needs of students

Highly visible earnings growth trajectory

  • Focus on quality of brand, operating system, portfolio and University relationships underpin future performance
  • Student numbers remain strong, with applicants expected to outnumber University acceptances by around 150,000 in 2017/18
  • Focus on operational efficiencies delivering £5 million of full-year savings (Unite share: £3.8 million) to deliver cost efficiency targets in 2018 and fund ongoing customer service enhancements
  • Highly accretive development pipeline of over 8,500 beds combined with stable rental growth could add 14 to 16 pence to earnings over the next few years

Richard Smith, Chief Executive of Unite Students, commented:

“It has been a highly active and successful first half of the year in which we have aligned the portfolio to the strongest Universities and enhanced the service we provide, based on our unique insight into the needs of today’s students.


“Our high levels of service combined with our quality properties in attractive locations have resulted in continued demand from both first, second and third year students as well as from our University partners, with reservations currently at record levels of 91% for the 2017/18 academic year.

“Safety and fire safety is a key priority for us. Our buildings are specifically designed for students and have a wide range of fire detection and prevention measures in place, supported by our fire management processes and fully trained staff. Following the tragedy at Grenfell Tower, we have completed a full review of fire safety of our estate, together with advice and support from the relevant local fire authorities, our buildings remain safe for occupation.

“Looking ahead, our market leading brand, scalable operating platform and active development pipeline leave us on track to deliver earnings and dividend growth for the full year.”


There will be a presentation for analysts this morning at 09:30. The live webcast will be available at: Please contact Bell Pottinger for further details. Dial-in number for the presentation: + 44 20 3059 8125. Participants will need to quote “Unite Students”.

The company announces that it will be hosting a Capital Markets Day in Birmingham on 26 September 2017. Further details of the event will be circulated in the coming days.

For further information, please contact:

Unite Students
Richard Smith / Joe Lister / Candice Macdonald Tel: +44 117 302 7109

Bell Pottinger
Clinton Manning / Elizabeth Snow Tel: +44 20 3772 2582

Read the full statement here

View the presentation here