The UK’s student population seized upon Unite Group’s (UTG) offer of rent refunds for the summer term as coronavirus threatened to sweep through accommodation blocks. Unite expects income for the 2019/20 academic year to drop by around 15 per cent, with a £139m valuation loss driving a collapse in the student landlord’s interim pre-tax profits. It anticipates losing 10 to 20 per cent in revenue for the upcoming academic year.
The group took swift action in response to the damage left by vacating students on its accounts, raising £300m via a placing in June and scrapping its final dividend. Unite said that it intends to reinstate payouts this year upon the achievement of EPRA earnings per share (those calculated in line with the recommendations of the European Public Real Estate Association) reaching guidance of 22-25p.
It will continue with asset disposals, targeting £100m-£150m of sales in 2020 with increased activity planned for the subsequent two years, although Unite acknowledged that this will be harder to execute in the short term owing to coronavirus.
Analysts at Peel Hunt forecast an adjusted net asset value (NAV) of 780p for the full year, rising to 797p in 2021.
| UNITE GROUP (UTG) | ||||
| ORD PRICE: | 944p | MARKET VALUE: | £ 3.76bn | |
| TOUCH: | 943-944p | 12-MONTH HIGH: | 1,351p | LOW: 577p |
| DIVIDEND YIELD: | Nil | DEVELOPMENT PROPERTY: | £458m | |
| PREMIUM TO NAV: | 13% | |||
| INVESTMENT PROP: | £4.2bn* | NET DEBT: | 42% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 820 | 126 | 53.3 | 10.25 |
| 2020 | 833 | -73.6 | -20.4 | nil |
| % change | +2 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes investments in joint ventures | ||||
