Unite Share Discussion Threads

[maddox] 06/3/2020 16:45

So we've just taken a second leg down as the market responds to the Covid-19 concerns. UTG has fallen 17% as I post to 1112p. Italy has decided to close schools and Universities until mid-March and the infection rate in the UK is climbing and accelerating, currently 163, and probably more by the end of the day.

Trying to put the risk to Unite's business into context, I just had a look at the latest mortality rates and the 10-19 and 20-29 age bands are both at 0.2%. It is also likely that this reflects those with other medical conditions. Listening to Sir Patrick Vallance, the Chief Scientific Adviser to the Government, this morning on BBC R4 Today these numbers are probably maximums due to the number of under-recorded infections.

This suggests to me that it would be better policy to keep the students at college to ride-out this infection rather than sending them home to potentially contaminate their more vulnerable elders.

Regards, Maddox

[maddox] 06/3/2020 09:11

Hi Ben,

FYI UTG are a REIT - which means that they HAVE to distribute 90% of their income to investors - this confers tax advantages.

Immediately prior to the Liberty Living takeover the share price was 957p the shares then ran up to c. 1340p (+40%) - before the market correction.

I think you are whinging.

Regards Maddox

[ben gunn] 04/3/2020 16:11

Maddox
Returning to my perennial beef that this board short changes their shareholders by ignoring the majority of their profit steam in setting the divi; this year I now have a new beef:
*They don't pay any taxes either, so instead of paying me a catch-up dividend the shareholders funds have grown from £2,073 Mn to £3,071 Mn.
*By overpaying for the assets of liberty they have paid out some of this bunce but to Liberty shareholders but not to me and the other owners.
*Of course, only a cynic would ask "who are those Liberty shareholders who got my divi instead of me?"

[maddox] 04/3/2020 10:52

Well its been a long couple of weeks in the market, so thought I'd better revisit my last post on 'UTG knocking on the door of the FT100'. When I wrote that post UTG's share price was 1336p and mkt cap £4.84bn. Now the share price is 1160p (down 13%) and mkt cap £4.2bn and UTG's chances of making the draft are looking far less likely.

UTG are now in ninth place from the top of the FT250 and now only larger than the bottom four firms in the FT100. So it appears that UTG have dropped disproportionately in this market correction triggered by Covid-19 virus fears.

Regards Maddox

[gswredland] 02/3/2020 17:01

Ah yes RA
Thanks for response

[redalert] 02/3/2020 11:42

gsw- only thing i can see is potential risk to their summer income re covid, as stated in the results statement. RA

[gswredland] 28/2/2020 17:21

Can really see a lot not to like here. Immune to covid?

[maddox] 19/2/2020 14:10

With the completion of the takeover of Liberty Living on 29 Nov an additional 72,6 million Unite shares were admitted to the stock market. This has thus lifted the market capitalisation significantly (Mkt cap on 16 Nov19 was £3.41bn (sp 1176p) on 7 Dec 19 mkt cap £4.49bn (sp 1234p).

A279;This together with the subsequent share price appreciation has led Unite's market capitalisation to rise to £4,84bn currently - where it is knocking on the door of the FT100 index.

The next quarterly review of the FT100 constituents will take place on the 11 March - so just three weeks away. As things currently stand Unite is larger than the bottom nine firms in the FT100 but ranks 6th from the top of the FTSE 250 index. So promotion is far from certain and Unite may just fall short and end up on the FT100 Reserve List.

On the other hand we may see a run-up in the share price as Financial Institutions position themselves to take advantage ahead of the Tracker Funds.

Anyway nice to have a nag in this derby!

Regards, Maddox

[ben gunn] 06/2/2020 19:36

Thanks Maddox...I have filed away the Chronic Investor piece.

Considering a long position for the run up to the 26th Feb results and new divi
declaration.

[ben gunn] 12/12/2019 16:03

Nice pre-election results price weakness this afternoon.

Would top up but really fully exposed

Maddox- going back to your point a couple of months ago that private investors seem shy of this stock, I have raised it with colleagues at the Society of Technical Analysts and they seem to blank it too, Seems very odd as I see lots of headroom for the price as well as excellent trends over the last few quarters.

[jonut] 03/12/2019 10:30

From Liberty Living website,


www.libertyliving.co.uk/corporate-info/,

details of their UK wide portfolio, average 400-600 beds/site (London & Glasgow 300). Total 51 sites/ ~24,000 beds.


Location/Residences
Aberdeen/4
Bedford/1
Birmingham/4
Bristol/1
Cardiff/8
Coventry/2
Edinburgh/1
Glasgow/2
Leeds/2
Leicester/2
Liverpool/4
London/5
Manchester/5
Medway/1
Newcastle/4
Nottingham/1
Sheffield/1
Southampton/2
Wolverhampton/1

I imagine a fair few sites will be surplus to requirements and 2020 will see the beginning of Unite rationalising it's expanded estate, using the funds to increase it's offering in preferred locations.

Interesting year in prospect.

[maddox] 26/11/2019 22:33

Hi arja,

Yes too true, I know of similar sad cases.

Regards Maddox

[maddox] 24/11/2019 15:57

Hi andytr,

Unfortunately Theresa May did significant damage to the UK as a destination for foreign students first as Home Secretary then as PM. She is deeply xenophobic and foreign students were an easy target in her attempt to get immigration numbers down. Several legitimate students from India were deported on the eve of their third year - they'd already spent a considerable amount on their first two years! Un-fair and unforgivable treatment that had a predictable effect on Indian students coming to the UK.

Thankfully, she's gone and there is recognition of the huge contribution this sector makes to the economy, our intellectual capital and soft power around the Globe. The target is to grow foreign student numbers by 30% by 2030 - see my post 595 above.

2018/19 figs are that non-EU student numbers were up 8% and even EU students were up 1%. So far healthier numbers and of course they are just part of the market. Applications from 18-year-olds for uni places are at an all-time high. Also, more second and third-year students are opting to stay in purpose built student accommodation.

So, whilst I see your point if anything we are in a better position now than we have been for many years.

Regards, Maddox

[andytr] 20/11/2019 11:57

The UK’s population of international students is growing the slowest of any large country – up 0.6% in 2015 and 0.3% in 2016. Despite government promises, the UK's increasingly inward policies cause reputational damage, making it tricky to see long term growth potential. Unfortunately I'll have to bow out.

[maddox] 08/11/2019 16:23

I've been waiting for the CMA to sign-off on the takeover of Liberty Living. Now received, this is a huge step forward for Unite - the number one in the market taking over the number three. It consolidates Unite's position as the market leader and delivers a significant operational scale-up and with it the prospects of efficiency gains.

What I was somewhat surprised by was the quality of the Liberty Living property portfolio, focused similarly to Unite, on top-flight universities and how good the fit is with Unite's own portfolio. There is certainly no drop in quality as a result of this takeover.

One aspect where Liberty were performing better than Unite is half-term lets - filling vacant rooms when the students are at home or on holiday. So there may be a few learning points to be taken on board along with the portfolio.

The deal also brings Liberty's owner, Canada Pension Plan Investment Board ("CPPIB"), on-board as an investor. It is having deep-pocketed long-term strategic investors that gives Unite the fire-power for similar large deals. This is a huge differentiator from the other purpose-built student accommodation (PBSA)specialist developers and managers.

So a fantastic deal in a market that still exhibits positive demand and rental growth. This set against an increasingly worrying macro-economic back-drop. The un-correlated nature of this sector of the property market is a highly attractive characteristic. If, as seems possible, the Treasury feels the need to drop interest rates - our asset-backed cash machine will look ever more a safe haven for financial institutions' money.

Needless to say my Dec 2020 share price target of 1035p has been passed a year early (1135p as I post). So congratulations to all holders and I'm looking forwards to see how the portfolio integration proceeds and additional value is generated.

Regards Maddox

[maddox] 13/9/2019 09:57

The Govt now is aiming to increase the number of International Students to 600k from the current 450k over the next 10 years.



On the basis that PBSA beds are being built at a rate of 25,000 per year - and UK demand is still rising - it appears that the under-supply that supports rental growth is likely to be maintained.

Regards, Maddox

[jonut] 11/9/2019 15:13

Very reassuring update today, topped up to full weight on the strength of it. Intended to take a trading stake around £10 anyway but will probably keep them tucked away long term.

Thanks for the posts Maddox - always of interest. Well kept secret, this board.

[maddox] 11/9/2019 12:33

Unite report strong demand in their trading update today should deliver on-target rental growth.

The Competition and Markets Authority have started their investigation into their £1.4bn acquisition of Liberty Living.

This takeover is the number one in the PBSA sector taking over the number three. However, the market is far larger than the PSBA Sector and includes University-owned accommodation and also large number of HMOs(home of multiple occupation).

The review is expected to report in 4Q 2019.

Regards, Maddox

[maddox] 11/9/2019 11:45

Excellent news today for all UK Universities and Purpose-Built Student Accommodation (PBSA) providers. The Govt is to change the rules to now allow foreign students studying in the UK to stay-on work for a further two years unrestricted. There are currently 450k international students in the UK. This move will undoubtedly boost numbers as the UK has been far less attractive than other top destinations, specifically Australia and US that already allow students to stay-on to work.

This thankfully reverses the disastrous bone-headed approach introduced by Theresa May as Home Secretary to require students to leave after 4 months. May saw students as a soft target to hit her hopeless immigration targets - despite the hard evidence that very few were over-stayers.

This move applies to all trusted higher education providers and will thus exclude the dodgy language schools that were flouting the immigration rules.



Regards, Maddox

[bothdavis] 18/8/2019 11:55

BBC reports over 364,000 A-level students flood clearing.

[maddox] 12/7/2019 12:00

Hi Ben,

Certainly, nothing I like better. Where are you based?

I'm based in London and often at Mello events, ShareSoc, Stockopedia Stockslams, Proactive and the like...

it's more a personal stream of consciousness that a BB - lol.

Best regards Maddox