Unite Share News (UTG)

(Sharecast News) - Unite Group reported on a "successful and transformational" year on Wednesday, with EPRA earnings rising 25% to £110.6m.

The FTSE 250 student accommodation company said EPRA earnings per share were ahead 15% at 39.1p, although it did report a loss before tax of £101.2m for the year ended 31 December, swinging from a profit of £245.8m in 2018.

It said its profit before tax, excluding items relating to the Liberty Living acquisition, was up 24% at £305.3m.

The board declared a 14% improvement in the dividend per share to 33.2p.

Unite's total accounting return was 11.7% for the year, down from 13.2%, while its like-for-like rental growth rose marginally to 3.4% from 3.2%.

Its EBIT margin was also slightly higher, at 71.7% compared to 71.3%.

As at 31 December, Unite Group's EPRA net asset value per share stood at 853p, up 8% year-on-year, while its net debt was 120% higher at £1.88bn and its loan-to-value ratio was 37% up from 29%.

"2019 was a successful and transformational year for Unite," said chief executive officer Richard Smith.

"We made good progress against all of our key metrics and continued to deliver meaningful growth in our recurring earnings.

"We also leveraged our best-in-class operating platform to complete the acquisition of Liberty Living's 24,000-bed portfolio."

Smith said the company's "strong results" remained underpinned by the quality of its product, and its long-term relationships with universities.

"These qualities differentiate Unite in a sector that remains undersupplied and is anticipating strong growth in student numbers over the next decade, as UK higher education maintains its global standing.

"A UK university education is highly valued by young people around the world."

Smith said the outlook for the business remained "strong", with reservations for the 2020-2021 academic year in line with record levels, supporting its like-for-like rental growth guidance of between 3.0% and 3.5% through a combination of further utilisation enhancements and value-driven price increases.

"Together with our development and university partnership pipeline of over 5,000 beds, this provides high visibility over sustainable earnings growth and we maintain our positive outlook.

"While Brexit negotiations and the ongoing review of higher education funding provide some uncertainty, our strategy of aligning to the best universities and providing good-quality, value-for-money accommodation for growing segments of the market underpins our long-term confidence in the business."

At 0957 GMT, shares in Unite Group were down 1.18% at 1,256p.