Unite Dividends - UTG

Unite Dividends - UTG

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Unite Group Plc UTG London Ordinary Share GB0006928617 ORD 25P
  Price Change Price Change % Stock Price Last Trade
-12.50 -1.1% 1,120.00 16:35:18
Open Price Low Price High Price Close Price Previous Close
1,130.00 1,113.00 1,143.00 1,120.00 1,132.50
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Industry Sector

Unite UTG Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

Top Dividend Posts

maddox: The Brokers Analysts opinions are gradually improving post the full year results and the more positive outlook: Strong Buy........3(1) Buy...............1(1) Neutral...........6(7) Sell..............0(0) Strong Sell.......1(1) ..................11(10) (brackets the figs captured 22 March) Source: Share.com Also, great to get the dividend (12.75p)on Friday.
speedsgh: Hi Maddox. UTG had been on my radar/watchlist for a long time but it's thanks to you and your excellent StockSlam presentation from Feb this year that pushed me into pulling my finger out and doing some hard research. So I owe you one but only a small one at this stage due to the limited size of my position :o) With hindsight, yes, I probably should have been bolder when I first attained a better understanding of the investment case here but the share price had already started running uphill and, being the ultra cautious type, I held off which, to date, has merely been to my cost. Que sera. As I say, if I have missed the boat, I will not lose sleep over it. There are always opportunities elsewhere and there will doubtless be further opportunities here as well at some point in the future [said in hope more than confidence!] ATB
maddox: Hiya speedsgh, Yes, great announcement and good to see the performance fees quantified at 'approximately £20-30 million (5-8 pence per share), to be recognised in 2021' and paid in cash 4Q. The other welcome comment is the intention of CIG/UTG to look for further acquisitions. This is built upon their successful acquisition of Aston Uni's campus accommodation. This gives he green light and financial fire power for Unite to source similar deals. Unite is uniquely well placed through its capital structure in comparison with ESP and DIGS etc. Their exemplary management of the Covid-19 challenge has enhanced their already excellent reputation and makes them the default choice for University deals. Good luck speedsgh with your scaling-in - timing the market is always a challenge. Regards Maddox
maddox: Positive update this morning, and optimistic outlook: '2021/22 reservations We have seen a strong sales performance since our preliminary results on 16 March, reflecting increased confidence from both UK and international students as lockdown restrictions begin to ease. Across the Group's total property portfolio, 73% of rooms are now reserved for the 2021/22 academic year with the deficit in sales to prior year continuing to narrow over recent weeks (2020/21: 80%).' This is then reflected in the portfolio valuations. As at 31 Mar 2021 the two funds are: USAF – Unite own 22% - like-for-like asset value increased 0.5% during the quarter; and LSAV – Unite own 50% - like-for-like asset value increased 1.3% during the quarter. Overall UTG are forecasting a "2-3% rental growth in 2021/22." So looks like we're going in the right direction and back to normality.
maddox: Investors Chronicle 17 Mar 2021 has a positive write-up and buy recommendation on UTG but no share price target. They make a favourable comparison with Empiric (ESP) based on UTG 21/22 advance bookings at 66% to ESP's 20%. With this reflecting UTG's less reliance on overseas students.
maddox: I can't remember the last Broker Research I've seen on UTG. The Brokers Analysts are apparently undecided on UTG: Strong Buy........1 Buy...............1 Neutral...........7 Sell..............0 Strong Sell.......1 .................10 Source: Share.com I've no idea as to the timeliness of the data here. Regards, Maddox
maddox: Hi me, Couldn't agree with you more. The prospects and market dynamics are not changing as rapidly or as dramatically as the share price might suggest. However, I wonder whether UTG's resilience might actually be counting against it - there are far larger yields available elsewhere if that's what FIs are seeking. If you are brave an optimistic on a retail recovery you could see New River Reit (NRR) on 9% plus as attractive. Similarly, British Land (BLND) is offering 4% if you think we're not going to be working from home on a permanent basis. UTG is a bit of a hybrid offering resilience, growth and income might not be appealing atm. Any other thoughts?
maddox: My StockSlam pick is a property company specialising in Purpose Built Student Accommodation (PBSA) –called Unite (LON:UTG) . It is by far the largest in this sector with c. 75,000 beds a Mkt Cap £3.4bn and features in the FT250. Its shares peaked at £13.38 in Feb 2020 but was then hit by Covid-19 and is now down at 963p (down about 27%). This price I think presents a good short-term buying opportunity with the end of Covid restrictions in sight. Student Accommodation is a resilient investment, its asset backed and its market is uncorrelated with the general economy. Student Accommodation was the best performing property asset class during the Global Economic Crisis of 2008/9. One of Unite’s strengths is that 55% of its beds are guaranteed to be occupied by its agreement with Universities. Unite (LON:UTG) is a REIT (Real Estate Income Trust), which allows exemption from UK corporation tax on its rental profits and to qualify as a REIT it has to distribute 90% of its income to investors by way of dividends. Which should be attractive to income seekers, but Unite's yield is relatively low, this is because it is expected to grow, both by its development pipeline and also by acquisition. It took over the markets' third largest player Liberty Living in 2019. The Covid Impact: Covid-19 has hit Unite’s business - they released students from their contracts very early on, also given discounts and rental free periods. Typically, they would achieve 98% occupancy – but managed only 89% in 2020. So Covid has hit its income and consequently its property values have fallen. Unite has published a Student Survey this morning: https://www.investegate.co.uk/... The findings are: >> 77% students struggled with mental health and wellbeing as a result of Covid-19, but 84% say engaging in university life has been positive for their mental health; >> Students' biggest challenge this year is the lack of face-to-face teaching, practical experience or facilities; >> Traditional face-to-face university experience is key for students: 86% are keen to get onto university campus once it is safe to do so; 75% agree that living in university accommodation and being on campus is as important a part of the university experience as lectures and tutorials; and >> Four in five (79%) students would like a return to face-to-face tuition after the Easter break. This based on a survey of 2000 students. Covid-19 has been very instructive: It has demonstrated just how robust the demand is for the 'university experience'. Going to University is clearly a culturally entrenched 'right of passage' for the UK's young adults. It has often been postulated that on-line learning would disrupt this tradition. Covid-19 has provided the opportunity to test this hypothesis. Whilst, on-line learning has clearly allowed teaching to continue during the Covid-19 Lockdowns - it is certainly not a substitute for the uni experience. Students want the 'real-life' full-fat university experience - it's not just about learning (https://www.bbc.co.uk/iplayer/...) ;-) These are two extremely significant points for anyone assessing the risks of investing in this sector. So, I’m expecting a full recovery in demand once Covid-19 restrictions are removed. The market back-ground is supportive: The market is under-supplied, there is a short-fall of c. 243k beds of those required for first years and international students - that universities like of offer 'in-hall' accommodation. Secondly demand is growing: Demographics are positive - the number of 17/18 year olds is increasing - and, a higher proportion of them are opting to go to university. The Government has at long last recognised the value of international students to the UK. The Govt has changed the rules to now allow foreign students studying in the UK to stay-on to work for a further two years. Also, the Govt are targeting to increase the number of international students by c. 33% to 600k by 2030 - from c. 450k previously. In addition to income Unite also offers growth: It has a development pipeline of 5000+ new beds to be delivered by 2024. It raised £300m in June 2020 by way of a placing at 870p – now you might think that this was to repair the balance sheet – but no it was to take advantage of depressed land prices and fund the acquisition of three more prime development sites. It has a strong balance sheet with a 33% debt to asset value ratio. To summarise: Covid-19 presents the opportunity to get on-board this high quality REIT that offers the prospects of both growth and income. With the end of Covid restrictions now in-sight I’m expecting to see a full recovery in demand for Unite's accommodation and a bounce in the share price. But, due to its resilient market, this is a share I’m very happy to hold in the face of a possible UK recession. Maddox (Declaration: I am very long Unite (LON:UTG)) ///////////////////////////////////////////////////////////////////// and in answer to some questions: Watkin Jones (LON:WJG) is a great business but I haven't invested. I particularly like that they de-risk their business by pre-selling their developments and thus finance their developments using the customer's cash - perfect. I favour Unite (LON:UTG) because it retains its developed PBSA assets and is thus inexorably growing in size and efficiency. WJG OTOH has to keep expanding its development operations in order to grow - this will at some point cause difficulties. £UTG has a further advantage over Empiric Student Property (LON:ESP) and CPG Student Living (LON:DIGS) in its unique capital structure that provides substantially greater financial deal capacity. Its property development and management company is supported by two own managed property funds. This distinguishes it strategically from it's competitors, the funds are: USAF £2.8bn – Unite own c.22%; and LSAV £1.3bn – Unite own 50%. This means that Unite (LON:UTG) is not restrained by its own balance sheet debt capacity (a conservative 33% debt to value), once the yield on a developed property matures it can sell the property into the funds and re-finance its development pipeline. The funds can also be leveraged in takeovers, such as Aston University's Campus and Liberty Living. The financial firepower that this structure provides is a key strategic advantage in what is likely to be a consolidating sector. \\\\\\\\\\\\\\\ Cladding - Grenfell tragedy Unite have been hit by this dreadful scandal but are in a good position to quickly fix it. They have 19 buildings with unsafe cladding, which will be removed within the next 12 months at a total estimated cost of about £15 - £20m.
maddox: I've written-up and fleshed out my StockSlam pitch on Stockopedia: www.stockopedia.com/content/my-stock-slam-pick-unite-group-utg-a-post-covid-recovery-opportunity-764584?order=createdAt&sort=desc&mode=unthreaded Apologies to non-subscribers but you'll be very familiar with the points made. Now that the 'road to freedom' is now in view UTG's re-rating appears to have started. The next issue beyond-Covid will be the dyer state of the UK economy. Once Mr Market starts to look for resilient performers that are uncorrelated with the economy UTG will look a very attractive prospect.
maddox: Hi speedsgh and thank you. The Stockopedia figs are one year 'rolling' figures so partly historic and forward looking. As the dividends are suspended I'm not clear how that yield is derived. A few thoughts on dividends: >> My base case is that when income fully recovers in fin year 2022 I would see UTG paying 33p (equal to expected but shelved 2019) and a 3.45% yield (on current 955p share price); >> Then there are further synergies and cost efficiencies from the integration of Liberty Living to be gained. This might add 6p and give a prospective 4% on current share price, but I'm unsure whether or not Covid-factors might off-set some of this. >> The NAV is directly linked to the rental yield - so when income is hit so are the values, similarly reversed when income recovers. The premium to NAV I interpret to reflect the growth potential (pipeline and uni deals). Whilst I'm persuaded that demand will return, has their been some re-setting of rental prices that will take longer to recover? Regards Maddox
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