With student numbers expected to reach record levels in 2015-16, and a shortage of modern student lets, growth at student landlord Unite Group (UTG) was little short of prolific in the first half of the year.
Profits were boosted by a net valuation gain on the property portfolio of £82.9m, up from £14m a year earlier, while profits from property sales jumped from £5.2m to £77.1m. These impressive gains helped to push adjusted net asset value ahead by 20 per cent to 521p. The valuation uplift also helped to reduce the loan-to-value ratio from 44 per cent to 35 per cent.
Net rental income, including Unite's share in joint ventures, grew by 20 per cent to £58.5m, and the group remains on track to deliver like-for-like rental growth of 3.5 per cent to 4 per cent for the full year, up from a 3.3 per cent rise in 2014. To cater for the rising demand, there are plans to acquire three development sites that could deliver around 1,800 beds by 2018. Overall, the development pipeline alone could double adjusted earnings per share without taking into account the scope for rental growth, while boosting net asset value by 79p per share.
Analysts at Numis have revised their forecasts up by 3 per cent, and now expect year-end net asset value of 572p per share for 2015, rising to 640p the year after.
| UNITE (UTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 647p | MARKET VALUE: | £1.44bn | |
| TOUCH: | 643-647p | 12-MONTH HIGH: | 653p | LOW: 396p |
| DIVIDEND YIELD: | 2.2% | DEVELOPMENT PROP: | £83.9m | |
| PREMIUM TO NAV: | 26% | |||
| INVESTMENT PROP: | £1.49bn* | NET DEBT: | 55%* | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 392 | 45 | 23 | 2.2 |
| 2015 | 512 | 227 | 100 | 5.5 |
| % change | +31 | +410 | +328 | +150 |
Ex-div:08 Oct Payment:06 Nov *Including share of joint ventures | ||||
