With student numbers growing all the time, Unite (UTG) has plenty of room to expand its portfolio of modern, purpose-built accommodation for the sector. For the 2016-17 academic year, it will be operating 49,000 beds in a market where last year there were 532,000 first-year students.
There is doubt about overseas students from the EU, which comprise 9 per cent of students in Unite accommodation. Their funding has been guaranteed for at least the next three years. But Unite has had little trouble finding takers for its accommodation. Working closely with the major universities, it has already secured 89 per cent reservations for 2016-17, and with such strong demand it expects to drive rents 3-4 per cent higher.
Headline profits were lower due to a lower valuation uplift and fewer property disposals. However, in July Curzon Gateway in Birmingham was sold for £44m and disposals are expected to generate up to £125m in the full year. Crucially, though, rental income grew by nearly 6 per cent to £54.5m, and adjusted net asset value (NAV) was up by 7 per cent to 620p a share.
Analysts at broker Peel Hunt are forecasting adjusted NAV at the December year-end of 639p a share (from 579p a year earlier).
| UNITE (UTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 630p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 629.5-630.5p | 12-MONTH HIGH: | 706p | LOW: 550p |
| DIVIDEND YIELD: | 2.5% | DEVELOPMENT PROPERTIES: | £222m | |
| PREMIUM TO NAV: | 4% | NET DEBT: | 60% | |
| INVESTMENT PROPERTIES: | £1.73bn* | |||
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 512 | 227 | 100 | 5.5 |
| 2016 | 605 | 123 | 48 | 6 |
| % change | +18 | -46 | -52 | +9 |
Ex-div: 6 Oct Payment: 4 Nov *Includes investments in joint ventures | ||||
