Unite Share Price (UTG)

Ok UTG has fallen back down from 860ps to 819p. Presumably this a reaction to the latest Govt lunacy - Labour's new immigration plans - reducing the International Student stay-on after graduation to 18 months from two years and applying a levy (tax) on International Students.

From a UTG perspective this is of negligible impact as UTG has excess demand and is primarily catering to UK students. One might also consider a 6 month reduction as a token gesture that is unlikely to reduce numbers to a significant degree.

However, from a UK viewpoint this is very damaging:

aa) Firstly, it's completely daft to include students in immigration statistics - students overwhelmingly return home - so unnecessarily inflates a controversial headline number.

bb) Secondly, International Students contribute massively to the UK economy in 2023 a report assessed this to be a huge net £42bn. Compare this to legal services exports at £5.5bn (2024 Law Society Stats). This is also a significant income contribution to the cash strapped University Sector.

https://www.hepi.ac.uk/2023/05/16/international-students-boost-uk-economy-by-41-9-billion/ & https://www.lawsociety.org.uk/topics/research/economic-contribution-of-legal-services-2024

cc) The stupidity of introducing a Trumpian trade tariff on this important source of foreign earnings doesn't need to be argued.

dd) UK Soft Power: This is of financially incalculable benefit - but paid for by the recipient - how good is that.

Of course, there are a small percentage that settle in the UK. Without immigration the UK population would be falling - the educated, resourceful, often entrepreneurially minded international graduate is surely those we should be attracting not discouraging.

I thought that we'd have moved beyond the small minded xenophobia that leads to this kind of policy. Hey ho?!?

Apologies my mistake, the RNS from 28th made me think I was being offered shares instead of a dividend… Not too sure they will find many takers if any for the script shares looking at today’s price.. GLA

So I buy these shares originally as an income provider,only to find I can buy more shares instead for £8.67 and the price is now £8.50 anyway!! If I wanted more shares I would have bought them at 7.90 a few weeks ago! Or have I got something wrong here?

Goldman Sachs raises Unite Group price target to 1,218 (1,169) pence - 'buy'

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Excellent trading update from Unite indicating that rental growth has accelerated to 7%. This growth is driving property values up c.3% over the last six months. Unite also mention that the new Labour Govt should be more supportive of the University Education Sector - which is good to hear.

Looks like UTG have another large partnership deal in gestation - similar in size and deal structure to the recent Newcastle deal - they expect to make an announcement late 2H24.

The capital investment has historically been c. £250m p.a. now running at c. £300m but looking at £400m p.a. with Uni deals in the pipeline. Hence the fund raise - to keep the Loan-to-Value highly conservative at c. 30%.

Forecast total accounting return for FY24 is 12% - NAV growth + dividends, but excluding market yield movement. That is, ignoring a change in the interest rate environment. If and when the BoE starts to cut interest rates - there should be a positive effect on NAV valuations. I doubt what we're going back to near zero interest rates but cuts will certainly be beneficial.

The last few years have thoroughly stress-tested Unite's business model, first Covid, then high inflation and interest rates and it has demonstrated its resilience. The outlook is looking very positive. The economic environment remains highly supportive of PBSA with a widening gap between supply and demand. Unite are increasing their development pipeline in response. Add to this the prospect of more university partnership deals and the future is looking highly positive for the share price.