Share Name Share Symbol Market Type Share ISIN Share Description
Unite Group Plc LSE:UTG London Ordinary Share GB0006928617 ORD 25P
  Price Change % Change Share Price Shares Traded Last Trade
  9.50 1.14% 842.00 928,471 16:35:15
Bid Price Offer Price High Price Low Price Open Price
837.00 838.00 844.00 823.50 830.50
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment & Services 156.20 -101.20 -31.50 3,352
Last Trade Time Trade Type Trade Size Trade Price Currency
17:47:35 O 2,193 842.00 GBX

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Unite Daily Update: Unite Group Plc is listed in the Real Estate Investment & Services sector of the London Stock Exchange with ticker UTG. The last closing price for Unite was 832.50p.
Unite Group Plc has a 4 week average price of 823.50p and a 12 week average price of 823.50p.
The 1 year high share price is 1,351p while the 1 year low share price is currently 577p.
There are currently 398,142,599 shares in issue and the average daily traded volume is 1,226,558 shares. The market capitalisation of Unite Group Plc is £3,352,360,683.58.
maddox: in addition to Unite’s wholly owned student digs Unite runs two student property funds of which they own a percentage. Unite report their independent quarterly valuations of their funds today - there has been virtually no change in value since the last quarter. The two funds are: USAF – Unite own 22% - like-for-like asset value decline of 2.2% for the half year; and, LSAV – Unite own 50% - like-for-like asset value decline of 1.5% for the half year. The decline being driven by the loss of rental income as a result of Covid-19. There is clearly a read across to Unite's directly held PBSA. This decline of 1.5% - 2.2% is in contrast to the magnified c. 30% decline in Unites share price (1325p to 924p).
maddox: Agreed Richard, however i find it difficult to understand how the share price got so low. Mr Market is indiscriminate in a crash but quality bounces back.
maddox: Good news from UTG on their Covid-19 response. UTG were very quick to respond positively to the predicament that both Universities and Students faced as a result of Covid. By waiving their contracts they will have given great relief to Students that will have been facing major stresses. However, at that point there was huge uncertainty as to what this and Covid would cost Unite. Today's update provides a much clearer picture, albeit uncertainty remains, and guess what - the impact isn't as bad as first estimates, or anyway near as bad as the share price appears to reflect. Also, the mitigation measures that Unite are taking are producing results: >> Cost-savings measures of £12 - £15m (on-top of £6m Liberty synergy savings); >> Pay cuts of 30% for Directors and bonuses deferred (20% cuts for Snr Mgrs); >> Development pipeline deferred to save cash; and >> Switching focus on recruiting UK Students to displace the anticipated fall in new Intl. Students in 20/21 academic year. This accompanied by reassuring comments from Richard Smith, CEO: "We are committed to doing the right thing for our customers, colleagues and other stakeholders, despite the unprecedented times we face." and "We will emerge stronger from this challenging time, building on our enhanced reputation with students and Universities." Having confidence in the management team is an absolute must for me as an investor. How a team responds to an unforeseen crisis is an 'acid test' moment as it reveals whether they can make the right often difficult decisions quickly and implement them effectively. Unite have risen to the challenge and are clearly managing the crisis effectively and communicating well. This is an excellent confidence builder in the midst of this awful crisis. Hope you all are staying safe, well and Covid-free. Maddox
maddox: The student property funds performance will clearly be reflective of Unite as a whole. So, the quarterly valuations indicate a current fall in property values of, say 3% (rounding-up). The cashflow impact of Covid-19 Unite currently estimate at between £90-£125m in 2020/21. This based on the assumption that the next academic year starts pretty much as planned. I estimate that this impact is roughly 26-36% of rental income which seems high. Unite's shares are trading at 821p, as I post, down 39% on 21 Feb Covid Virus Crash Day Zero share price of 1339p. The share price decline appears to reflect a far worse position than what the current available facts present. For what I consider to be my most resilient investment I'm repeatedly surprized by the share price volatility (the Brexit vote dip in 2016 is a similarly extreme example). On the one-hand this might be the end of capitalism and the only solution is to climb under the bed with a bottle of whisky and a resolver. On the other, we might get on-top of Covid-19 and the economy survives and this is a painful blip. I'm thinking the latter scenario is likely, students will return and the share price will recover. Anyway, I'd be interested to understand why Unite exhibits such exaggerated volatility - what is Mr Market seeing that I'm not? Regards Maddox
maddox: 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
maddox: 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: The full year 2018 results are as strong as expected. The highlight for me being the uplift in the dividend by 28% year-on-year to 29p. With the share price closing at 916p as I write the yield is 3.71% which is in it's range of 3 - 4%. However, the advantage of buying into a share like Unite that is growing its income year after year and increasing the dividend pay-out is that on my historic cost of purchase I'm now getting an equivalent yield of over 15%. The much used description of a share like Unite as being a 'bond proxy' couldn't be more wrong in my opinion: It ignores the key attribute that these shares tend to have of increasing their payout whereas bonds don't. Other key highlights: EPRA earnings - +25% EPRA eps - +13% (less due to share issue to buy properties) EPRA NAV - +10% (following some disposals for re-investment) The LTV is a highly conservative 29% with the cost of debt falling to 3.8% (4.1% - 2017) and destined to fall to 3.6% as they increase the debt to build-out their current forward development pipeline of 6,579 beds. When this current pipeline (further additions will be made to it) Unite forecast an EPRA eps of 47p - 51p so a circa 38% - 50% uplift. As 85% of these earnings will be paid-out as dividends we are looking at 39.95p - 43.35p in divs and a projected share price of 1077p - 1168p (based on the current yield). On top of this there are prospective Unite's university partnership deals - that are taking longer to come to fruition than I had hoped. I'd recommend anyone interested in Unite to look at their H2 Results presentation: hTTp:// that gives excellent background information on the market. There is still a large under capacity of student accommodation, numbers are rising and supply is falling. All this underpins an optimistic outlook despite Brexit or further economic travails. Regards Maddox
maddox: Unite has staged a dramatic climb in share price from the recent low of 797p on the 27th Dec to what today looks to be if it holds a new all-time high. Currently c.920p as I post. So c.15% in about a month. I get the impression that there aren't many personal investors in Unite and that it's Financial Institutions that are moving the sp; which is why the moves can be large in either direction as they transact in scale. What is also interesting is that looking at the recent reported daily transaction volumes seem to be declining whilst the share price is rising? This suggests that the Unite stock is tightly held and that the price rise is not managing to entice out sellers to satisfy demand. Regards Maddox
maddox: Another insightful RNS from Unite - a disposal of a student property in London for £135m. This time the buyer is another quoted specialist student property REIT GCP Student Living (DIGS). GCP will be getting an initial yield on purchase of 4.5%. What is interesting is that the property was in Unite's books valued at 6% lower which puts it on a yield of 4.7% indicating how conservatively valued UTG's assets might be. Unite's share price is already well below the last reported NAV of 647p - if this 6% underestimation of asset values is consistent across the portfolio the NAV would be 710p. HTTP://
maddox: Hi Chaps, I've been having a look at this dip in the share price and it appears that we have a couple of hedge funds shorting the stock just prior to the Morgan Stanley down grade report - Basso Capital Management & CQS (UK)LLP. Far be it for me to suggest that this is a coordinated bear raid. What is interesting is that the report is based on the student market contracting and this affecting Unite. However, it might also be expected to also affect ESP and DIGS - whereas their share prices have remained very resilient - DIGS is up as I post. Also, I'm far from persuaded by the report. There is a huge under supply of student accommodation. Last year 25,000 beds were added but student numbers increased by 60,000. There would have to be some cataclysmic event to bring this market into balance - so I'm satisfied that Unite is still an attractive investment in the short, medium and long-term. Unite's NAV was 620p at 30th June and Morgan Stanley share price target is 590p, other analysts targets are up to 770p so UTG are looking good value at the 550p share price as I post. What we are being presented with is a great opportunity to buy on the dip. However, as we have seen on previous Unite dips - it tends to be a spike - so you may need to be quick before the hedgies cover their positions and it charges back up again. Regards, Maddox
Unite share price data is direct from the London Stock Exchange
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