26th Jul 2016 07:25
LONDON (Alliance News) - Unite Group PLC on Tuesday said the fundamentals across the student accommodation sector remain strong despite the UK's vote to leave the European Union, but said its pretax profit almost halved in its first half due to fewer property sales and a smaller valuation gain.
The FTSE 250-listed student accommodation provider posted a pretax profit of GBP122.8 million for the six months ended June 30, down from GBP227.3 million the same period a year earlier, as revenue fell to GBP63.3 million from GBP141.8 million.
The revenue decline was primarily due to a decline in property sales, with none for the six months ended June 30 compared to GBP77.1 million a year earlier, as rental income rose to GBP54.5 million from GBP51.6 million.
Unite Group's net valuation gains on property also dipped to GBP48.7 million from GBP82.9 million the same period a year earlier.
However, Unite Group said its earnings per share rose 15% in the six months ended June 30, to 16.30 pence per share from 14.20p per share a year earlier. Its net asset value per share increased 7.0% to 620p per share when compared to the 579p per share reported at the end of December.
Unite Group said demand continued to grow for student accommodation, after the student number cap was removed in 2015, and funding has been guaranteed for EU students for the next three years providing students and universities with confidence in the near term.
"Student numbers are expected to grow by around 90,000 to 100,000 in total over the next three years, exceeding the anticipated level of new supply of around 75,000 beds over the same period with the potential that supply levels will start to slow beyond 2018 as a result of the referendum," Unite Group said.
Unite Group declared an interim dividend of 6.00p per share, up 9.0% from 5.50p per share a year earlier.
"Despite the uncertainty caused by the result of the EU referendum, the fundamentals of our business and the student accommodation sector remain strong," said Chief Executive Richard Smith.
Shares in Unite Group were down 1.9% at 621.00p on Tuesday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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