(Alliance News) - Student accommodation provider Unite Group PLC on Wednesday said its net asset value fell in the first half of 2020 and it swung to a loss from a profit due to revaluation loss.
Unite's EPRA net asset value per share fell 2.3% to 833 pence as at June 30 from 853p at the end of 2019. With no dividends paid in the period, that means a negative total accounting return of 2.3% for the half-year.
Bristol-headquartered Unite recorded a pretax loss of GBP73.9 million for the six months ended June 30, swinging from a GBP125.5 million profit. The company said this loss was "driven by a valuation loss resulting from income reductions as a result of Covid-19".
Total revenue was higher, however, at GBP122.6 million, compared to GBP73.5 million the year before, due to an increase in rental income.
Unite axed its interim dividend, having paid 10.25 pence per share a year before. It intends to reinstate dividend payments after the 2021 academic year begins, providing occupancy and income meet
expectations and the 2022 outlook looks good.
"We have growing visibility and confidence over our income for the 2020/21 academic year, reflective of the strength of our University relationships and demand from UK students," said Unite.
"There remains a higher risk than usual of cancellations to reservations by international students for 2020-21 and we continue to closely monitor the risks surrounding a potential second wave of Covid-19," the company added.
Looking further forward, Unite is forecasting "strong student demand" in the 2022 academic year "bolstered by an enhanced campus experience, a significant recovery in international student numbers as well as an increase in the 18-year-old population". This supports a positive rental growth outlook for Unite's portfolio.
Shares in Unite were down 0.3% at 937.50 pence in London at midday Wednesday.
By Anna Farley; annafarley@alliancenews.com
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Unite (UTG)