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Latest update just released....all in all very positive as expected I think. http://www.unite-group.co.uk/2013/11/18/interim-management-statement-2013
big 3/4 page spread about these in the financial part................
personally one of my favourite stocks! (mini disclaimer right there) has traded at premium to NAV sporadically over the last 5-6 months and would be interesting to hear if other people think it deserves to do so. mgmt seem to be doing a good job at getting interest costs down and the portfolio in the right shape. hopefully another set of positive results in a few weeks could drive it higher.. "progressing well"...if that doesnt make it sound like a horse but is it a £4 share yet?..feels as if it has re-rated rather fast. not that im complaining or going to sell any time soon. would like to see if get back to where it was peaking pre-crisis.
Mr Burt expects adjusted NAV, which strips out swap revaluations and marks trading properties up to market value, to finish the year at 348p. The shares currently trade 22 per cent below that level. It's always risky to invest in a company with recovery potential but, given Unite's growth profile, that above-average discount looks too wide. .......BUT AS ALWAYS DYOR AND GL.....
That said, the academic year just started - which has been heavily affected by higher tuition fees - will be weaker. Unite reckons student numbers this year are down 55,000 on last year, the main reasons being a reduction in the number of funded places by about 15,000, a low deferral rate last year, and - most importantly - miscalculations by universities, many of which have ended up with fewer students than they wanted. Over half of this fall will probably reverse next year as deferrals normalise and universities recalibrate their systems. But this year Unite has slightly more vacancies than usual, and management has reduced its expectations for rental growth in 2012 from 4 per cent to 3 per cent. Even so, that growth will be sufficient to push up profits, particularly in combination with falling debt costs. Michael Burt, an analyst at broker Espirito Santo, expects "net portfolio contribution" - Unite's primary profit measure - to be £18.5m this year, up from £11m in 2011. Yet rental growth also increases the value of the portfolio, boosting net asset value (NAV). Here, Unite's high debt level, which exaggerates the impact of revaluations on NAV, comes in handy.
The company has also been cleaning up its financial profile by selling assets, including properties worth £94m so far this year. A further £42m of disposals are under negotiation. Meanwhile, Unite has transferred its London development pipeline into a joint venture with the Singapore sovereign-wealth fund, releasing cash and allowing it to earn fees on more projects with less of its own capital. These measures are welcome - Unite's balance sheet looks in much better shape now than 12 months ago. But it's crucial to the investment case that it operates in a strong sector. London student blocks came second only to central London homes in league tables of property performance last year, and the regional market was also robust. With that trend likely to continue, Unite is a rare beacon of rental growth in a recession-stunted market.
However, a landmark deal with Legal & General (LGEN) in May showed it has access to finance. The insurer issued its maiden property loan to the company - £121m for 10 years at a rate of 5.05 per cent - reducing Unite's average cost of debt from 5.7 per cent to 5.5 per cent. The company has also just launched a retail bond, which should bring in £50m-£75m of more flexible debt, albeit probably at a slightly higher rate. The key point is that Unite won't have to tap its shareholders again - and at a big discount - as some feared.
Shareholders in Unite (UTG) have had some tough years. Suppliers of student housing have gone from strength to strength, but Unite - once the poster boy - has been held back by its debt. Yet a second distressed rights issue looks increasingly unlikely and, even after a strong year, the shares trade at a sizable discount to book value. There's still plenty of recovery potential left for investors who buy now. True, unlike many property companies, Unite's problems are self-inflicted. It recovered from the property crash with a rights issue in 2009, but its debt levels still look high for a company that has created more bricks-and-mortar than cash. Including its share of joint ventures, in June the loan-to-value ratio was 54 per cent.
Student accommodation group Unite has launched its first retail bonds, which have a fixed rate of 6.125 per cent and are due in June 2020. The bonds, which are payable twice yearly on June 12th and December 12th, have a minimum initial subscription amount of £2,000 and in multiples of £100 thereafter. The offer period begins November 21st and closes December 5th. Mark Allan, Chief Executive Officer of The UNITE Group, said: "We are delighted to announce the launch of UNITE's debut retail bond. This is an exciting market at the moment, as demonstrated by the significant private investor appetite for bonds issued by well established companies with strong track records of cash generation and positive market fundamentals." Investors are able to sell the bonds at any time during the life of the bond.
Unite Group (UTG) Director name: Ms Manjit Wolstenholme Amount purchased: 7,300 @ 268.00p Value: £19,564
UNITE Group: JP Morgan Cazenove raises target price from 280p to 320p and keeps overweight rating.
Unite Group, which develops and manages student accommodation, has acquired a zone 1 site in Camden, North London, from Travis Perkins, to which it will provide a new trading facility once the development is complete. The transaction cost Unite £23.8m with funding provided by HSBC. Unite secured planning permission for the building in August of last year, allowing it to build a range of cluster apartments and spacious studios. Construction of the 563-bed balance sheet scheme will begin in December 2012 and the property will open in 2014. Richard Simpson, UNITE's Managing Director of Property, said: "Camden Town is the top London location for students and this scheme will provide rare, zone 1 cluster flats at affordable rents. "This site purchase marks a further milestone in our target to expand our presence in the key London market, substantially. We expect London to continue to benefit from strong market fundamentals, with the supply/demand imbalance still a key factor, and we expect it to remain the most attractive and thereby resilient destination for UK and international students."
OLD MUTUAL'S RICHARD WATTS PICKS UNITE GROUP In a video interview, Morningstar journalist Alanna Petroff spoke with fund manager Richard Watts from Old Mutual about his favourite stock picks. One of his choices was real estate company Unite: PETROFF: Okay. We have UNITE, that's in the housing and, well, residential sector. Tell me a little bit about UNITE. WATTS: UNITE is a real estate company. UNITE owns and operates student accommodations. So you think when students go to university, the typical accommodation here would be provided by someone like UNITE. UNITE builds the accommodation and rents the rooms out. I mean it’s that simple. The story here is that UNITE trades at a substantial discount to its net asset value. So this is the book value of the company. It’s roundabout 30% discount today. Now, looking at the company and looking at the prospects, we think net asset value will grow at roundabout 15% per annum. So what you have here is a re-rating story as the discount-to-book value unwinds through time and the fact that that book value should grow at roundabout 15% per annum. So in our view, this is actually very attractive. PETROFF: Why was everyone ignoring this stock? I mean trading at a discount that seems remarkable. WATTS: Yeah. I mean, when we bought into the share, it was trading at roundabout a 50% discount. So 30% today but really substantial discount when we first bought in. There was a lot of fear around basically. Looking at the student market in the UK with the tuition fee increase from £3,000 to £9,000, and many people out there thought that would put a lot of students going off to university. Clearly, obviously, if your business is renting rooms out, the fear was ithat actually your occupancy levels would fall. And it’s not proven to be the case. Actually there has been a little bit of an impact on student numbers but for UNITE, occupancy levels are currently 98% to 99%. So, not really much of an impact at all. PETROFF: And no discounting their rooms for rent, or anything like that? WATTS: No. Rental growth has been pretty good. We think rental growth will be something in the range of 3% to 4% this year. When you actually sort of compare that with other real estate stocks, 3% rental growth is pretty attractive at the current point in time. So, it really does stack up on a number of measures for this company. You can watch the video here: http://www.morningstar.co.uk/uk/news/95243/fund-managers’-favourites-ftse-250-opportunities.aspx P.S. Here's some links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=256596&mode=2 http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=255276&mode=2 http://www.euroinvestor.com/community/discussionthread.aspx?iid=2467508&threadid=257550&mode=2
"From a strategic perspective the transaction allows Unite to accelerate its investment in London development activity at a time when potential returns are particularly compelling and the scale of opportunity is greater than Unite could fund alone," the firm said. The share price rose 2.96% to 261p by 08:42.
Unite Group, the UK's largest developer and manager of student accommodation, has announced an extension of its existing joint (JV) with GIC Real Estate, the real estate arm of the government of Singapore Investment Corp. as well as the creation of a new partnership through which Unite will undertake its next phase of London development activity. The life of the JV will be extended until September 2022 from its original maturity date of March 2013, and Unite will be able to increase its stake in the JV from 30% to 50% by the 2016 year-end. Approximately £100m of the JV's existing assets, equivalent to around 25% of its total portfolio at June 30th 2012, will be sold over the next four years. The disposals will be targeted so as to focus it's remaining holdings on its highest quality London locations and the majority of proceeds will then be applied to de-leveraging in the JV. The JV's existing senior debt facility of £236m, provided by a syndicate of lenders headed by HSH Nordbank, matures in September 2014 and will need to be replaced with a new facility. It is UNITE's intention to have the replacement facility arranged and in place during 2013. A separate 50/50 JV between the two organisations will be established with the aim of investing £330m in development activity in London. As part of this, Unite will sell two of its existing London development projects to the new JV for cash consideration in line with previously disclosed valuations on completion. The two JVs can be combined once Unite increases its stake in the original JV to 50%.
Student property specialists, Unite Group, gets the thumbs up from Tempus in the Times after revealing profits from operations that were nearly double analysts' expectations on Thursday. The £14.4m figure almost gets Unite to its full year targets and the demographics of student accommodation are in its favour. Applications for places haven’t fallen by as much as had been feared despite the rise in fees. Early progress may be slow after a big surge yesterday but Unite Group is a buy.
development pipeline suggests this will be maintained for the full year," he added. Unite said significant achievements in asset sales and the arrangement or extension of important debt facilities mean that the group's financial position continues to strengthen. It has a new £121m 10-year senior debt facility arranged with Legal and General. Commenting on the trading environment it said: "The UK economy remains challenging and we continue to be vigilant to the risks that are present as a result. However, demand for UK University places, and consequently accommodation, continues to be strong and UNITE remains well placed for the future." Furthermore with the 2014 London development pipeline committed and with 2012 completions it is on track to deliver £44m of NAV uplift (27p per share) by December 2014. The interim dividend has been increased to 1p pence per share, up from 0.5p. The full year dividend is expected to represent 25% of net portfolio contribution.
Student accommodation provider UNITE said recurring profits from operations doubled to £14.4m in the half year to 30 June amid high occupancy levels across the entire portfolio. Adjusted, diluted NAV per share climbed 5.3% to 335p while adjusted earnings per share increased 190% to 9p. Like for like rental grew 1.8% during the six months since December 2011. Current reservations for 2012/13 are at 87% compared to 89% in 2011 when there was a surge of applications ahead of increased tuition fees and 87% in 2010. UNITE said it was on track for 3-4 per cent full year rental growth. Chief Executive Mark Allan said: "During the first half of 2012, the business has built on the strong operational momentum created in 2011. High occupancy, solid rental growth and cost efficiencies have underpinned a further significant improvement in the group's profitability." "The healthy level of forward reservations and the successful completion of our 2012 d
Merrill Lynch upgrades UNITE Group from neutral to buy, target price raised from 175p to 240p.
Not sure if the makes much difference to anyone but all the shop floor staff in Stonehouse have been put on 45 days notice, my brother in law is one of them
is that UNITE are about to post better than expect results for 2012... anyone else hearing this?
Unite took an axe to its senior management yesterday, promising savings of £2.5m annually after a £1.5m upfront cost has been absorbed. Among casualties was the student accommodation group's chief operating officer of 10 years; he cost nearly £400,000 in 2010. Given that one analyst estimated that admin costs had mushroomed by 27% over the past three years, this is welcome, if somewhat overdue. On the downside, Unite's debt is higher than we'd like, but the shares trade on a ridiculous discount of more than 50% of their 2011 forecast net-asset value. Even with the potential challenges, that's too high, says the Independent, which says buy.
Shares in Unite (UTG) climbed 2p to 213.5p after the student dormitory developer received planning permission to build a 563-bed accommodation in Camden. The site is part of the group's London development pipeline, with aims to construct rooms for 4,000 beds by 2014. Of this figure, 1,900 have planning permission and funding and a further 900 are awaiting permission. Development director Richard Simpson said: "we expect [London] to remain the most attractive and thereby resilient destination for UK and international students."
Espirito Santo upgrades Unite Group from hold to buy, target price raised from 226p to 248p.