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Unite Group Posts 7% Increase in Profit Before Tax

Posted by Richard Ward in

Image courtesy of Flickr, Creative Commons

Unite Group has published its results for the year, reporting a 7% rise in profit before tax to £245.8m.

Commenting on the results, Richard Smith, Chief Executive of Unite Group, said: "2018 was another successful year for Unite. We made good progress against all of our core objectives and continued to deliver sustainable growth in our recurring earnings and cash flows. Our strong results remain underpinned by our brand, our sector-leading operating platform, the quality of our portfolio, our deep and valuable University relationships and sector fundamentals. These qualities set us apart in a sector that remains undersupplied and, more than ever, has a need for accommodation that is delivered efficiently and with a focus on value for money."

The company has posted a 25% increase in EPRA earnings to £88.4m (2017: £70.5m) and increased its dividend by 28% to 29.0p.

Its current reservation levels (75%) are in line with those expected for this time of the year, supporting the company's like-for-like rental growth guidance of 3.0%-3.5%.

The business has continued to focus high and mid-level ranked Universities, disposing of 3,436 beds for £180m that did not meet these criteria.

New university nominations were secured on 50% of the beds delivered in 2018, with 70% expected in 2019.

A development and University partnership of 6,579 beds has been secured and will be delivered over the next four years, generating a 7.0% yield on cost.

Rental income for the period increased by 10% to £188.3m (2017: £170.8m), as a result of new openings and rental growth, which was offset by the impact of disposals made in the year.

Looking ahead Unite warned that the Augar Review could result in the reduction in fees and potentially create some restrictions for Universities or courses that are assessed to offer lower-quality outcomes.