4th Nov 2014 10:49
LONDON (Alliance News) - Shares in Unite Group PLC were among the best performers in the FTSE 250 on Tuesday morning after it said it is performing well across all parts of its business, with strong lettings for the new academic year, and expects to meet its earnings per share target on its net asset value a year early.
Shares in the student accommodation company were up 2.5% to 437 pence in mid-morning trade after it said it has 99% of rooms occupied for the 2014-15 academic year, a slight improvement on the 98% occupation for the previous year.
On the back of the strong occupation numbers, the group said it is on track to hit its like-for-like rental growth target of at least 3% for the full year.
It also expects to meet its target of 4.5% earnings per share yield on its net asset value in 2014, a year ahead of its initial forecasts.
Unite said the student intake by universities in the UK is likely to have exceeded 500,000 for the first time in the 2014-15 academic year, up 4% on the year before and reflecting the decision by the UK government to increase the number of funding places by 30,000 against the previous year.
The plans by the UK government to entirely remove the cap on funding places in the next academic year is likely to lead to further significant rises in student numbers in the short and medium term, Unite said.
Unite said its Stratford One and St Pancras Way projects were both completed on time and on budget and are both folly occupied for the academic year.
It said construction at Angel Lane in Stratford is progressing well and it intends to start work soon on the Stapleton House project in Islington and the Olympic Way site in Wembley, with both scheduled for completion in 2016.
In its regional operations, the company said its 2016 pipeline if secured and is has received planning consent for the Greetham Street project in Portsmouth. It expects to secure planning consent for the remaining sites in its 2016 programme, in Aberdeen, Edinburgh and Newcastle, in coming months, it said.
For 2017, the company said it was making good progress on its pipeline, and recently acquired sites in Liverpool and Aberdeen.
"Unite Students continues to perform strongly in all areas. Demand for our accommodation remains very high, reflecting the appeal of our buildings and quality of service provided, resulting in 99% occupancy and strong like-for-like rental growth across the portfolio," said Unite Chief Executive Mark Allan.
"We also continue to make good progress growing our development pipeline, providing excellent visibility of the material future earnings growth potential of the business," Allan added.
Liberum echoed the positive feeling on Unite's performance, saying the strong lettings performance for the 2014-15 academic year "substantially de-risks" Unite's guidance for 3% rental growth this year.
In addition, the site acquisitions made by the group in the regions means it has secured 2.5 years of future development output, putting in on track to meet its target for earnings per share growth in excess of 120% by the end of 2018.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Unite