Unite Share Discussion Threads

[allseeingeye] 28/11/2008 16:37

slightly happier story this week - no idea what sparked their fuse today...

[richaims] 22/11/2008 13:02

Unite Group down 9.09% yesterday (Friday) and down 36.59% in one week according to Barclays Stockbrokers website.

[allseeingeye] 20/11/2008 13:24

the chart does look grim and yes there's no shortage of debt - but debt is the nature of the beast with a co like this and they've spread this risk by effectively selling some of it to their own property fund (USAF).

Goldman Sachs have sold out - who knows to what extent the sell off is down to forced inst'l sells or canny investors getting out before...bust I guess. That said the co does have a strong property portfolio and a profitible business letting rooms to students. The student mkt isn't going to go away - it will increase if anything especially in London. I've made a small punt these are oversold - but I'm not betting the house on it.

[richaims] 20/11/2008 13:02

Allseeingeye

As you say, the mkt cap is below £90m and not as shown by ADVFN. My apologies - I'll try and remember to check ADVFN mkt cap data in future.

The Unite chart still looks grim, though !

richaims

[m.t.glass] 20/11/2008 11:09

Allseeingeye - OK. On your figures (£88m cap), the debt is 7.7 times market cap, not four times.

[allseeingeye] 20/11/2008 10:34

Lets get a few facts straight - sadly advfn not great on the fin info.
Mkt cap is £88m approx - about 125m shares in issue. At last results net assets £450m - of course Unite has debts, it has a property portfolio last valued over £1bn.
Nopne of this is to say all is rosy - do your research as they say and clearly asset values ain't going up. So it's a question of whether things are so bad they justify a mkt cap below £90m...

[richaims] 19/11/2008 20:25

Looks like a disaster to me.. Down another 10.45% today. With a mkt cap of £174M, might have much further to fall?

EDIT : The above ADVFN mkt cap is wrong. See next post.

[m.t.glass] 19/11/2008 14:19

- dropped by another third in value since you asked that. Halved in little over a week. Been stuck in a downtrend for 18 months.

Yesterday's announcement (that it was cutting its 2009-10 development projects by half) has evidently not gone well with the market who presumably see that impacting bigtime on rental income and management fees thereafter.

Net debt of £678m is four times current market cap.

[boilinthebag] 18/11/2008 12:52

Warren rang me other day and asked me to sell him my shares - I told him to get his own - at half the price!

[boilinthebag] 13/11/2008 20:56

The Price Drop today now looks over done - or, was there something that the analysts at the site meeting the other day didn't like ?

[ben gunn] 27/10/2008 08:43

Catch a falling knife
and put it in your pocket
then
worry about it all day.

[roughjustice] 12/9/2008 23:47

Tipped by the Naked Trader on - Edition 12

[dvda] 15/8/2008 14:36

Press release from earlier in the week - "Savvy Students Get James Bond Style Accommodation"

[maddox] 06/7/2008 00:41

Unite - Safer than houses!?1?

With house and commercial property prices falling and forecast to fall further still its excellent news that we have today from Unite:

'The Fund's Estimated Net Asset Value as at 30 June 2008 was £1.053 per unit (31 March 2008: £1.002 per unit, 31 December 2007: £1.020 per unit), representing an increase of 5.1% in the quarter (3.2% year to date).'

'In arriving at the value of the Fund's units, its property portfolio was independently valued at £833 million, representing an increase of 0.5% for the quarter and the portfolio is now broadly in line with the 31 December 2007 valuation.'

The value of student accommodation is showing great resilience. However, the contrast with Unite's recent share price performance could not be more stark. Unite's basic net asset value as at 31 December 2007 was 364p so excluding the six months value added since then the discount to the share price is at the very least circa 40%.

Of course the other way of looking at it is that the shares would need to rise by circa 70% to get to parity with the basic net asset value.

Regards, Maddox

[scburbs] 04/7/2008 08:13

Pretty impressive for UTG to announce an increase in the fund valuation amid the gloom. Not holding, but have to said that is good work by the UTG team and rental growth much be strong.

[maddox] 31/5/2008 22:48

Hi high park,

Agreed, its not possible to fight the trend. I'm taking advantage of it to buy more stock - I like the market's irrationality, the larger the anomaly the easier it is to make money, and the greater the return. I can be patient.

Fundamentals will win out in the end, its just a matter of time.

Regards, Maddox

[high park] 31/5/2008 13:17

Unite may be solid, Maddox, but you can't fight the trend. One of my favourite quotes is "the market can stay irrational for longer than you can stay solvent"

Flavour of the month is coal, and you can always switch back when property is on the rise again.

[maddox] 31/5/2008 13:00

Unite has survived eviction for the first two weeks of Investors' Chronicle Share Champions contest. This week's test is cash flow, and one of the 'Experts' Views are negative on Unite:

"At the opposite end of the spectrum lies Unite, which has reported a negative number for the past five years." and "The negative cash flow number indicates that it is having to delve in to cash reserves which could put the company at risk for this week's eviction" James Hughes, Chief Analyst, CMC Markets.

I'm afraid its all too obvious that he hasn't got a clue about Unite. I had thought this coverage would generate awareness of Unite's attractions. Hmmm ...might have got that wrong.

Regards, Maddox

[maddox] 28/5/2008 16:43

Here we go again. Despite the reassurance of the recent results and further update (on disposals) the share price has decined to sub 300p. Looks like this is a reaction to the House Builders declines of yesterday, Barratts slumped 18p to a two year low after an institutional investor dumped a big line of stock.

When you see Unite likewise drop 10p you cannot help but wonder - what's up? ...what does the market know that I don't. You have to be brave to buck the market!

Regards,Maddox

[maddox] 21/5/2008 15:30

So what does the latest asset sale news tell us?

Well, firstly I'm sure that UTG can find a better use for the £54m raised than sitting on the assets. This can be recycled into the new development pipeline to grow NAV. Unite will continue to manage 990 of the 1308 beds on behalf of the purchasers so will retain the fee income.

Secondly, the sales were to outside parties and the price paid, equivalent to an initial yield of 5.7% indicates that the prices for these assets, i.e. student accommodation, is holding up well despite market conditions.

All in all then some further reassurance that UTG appears in sound condition.

Regards, Maddox

[maddox] 21/5/2008 14:40

I note that Investors' Chronicle have selected Unite as a prospective "Share Champion". This is a 'The Apprentice' style feature where the pros and cons of the various shares are discussed and one voted off each week.

This may generate some wider awareness for Unite's somewhat unique qualities irrespective of how far it gets in the contest. Their summary on Unite can be found:



Regards, Maddox

[maddox] 25/4/2008 12:03

dcomd99,

Okay dokey, bit of info from the annual report, paraphrased by me:

As at 4/3/2008 they had £1,382m debt available. On 31/12/07 b/s figures £744 of this was committed to projects and £595m of this actually drawn. With a gearing of 106%. The unexpired term on the debt was four years and the average cost of debt was 6.7% with 89% of the debt fixed or hedged for 5.6 years.

I'm not a financing expert but that looks pretty healthy to me, not too expensive and plenty of headroom.

I also noted that they financed the early redemption of the Unite Finance One Bonds in October 2007, when market conditions were already bad, to the tune of £318m. So they have a good track record of securing what they need and in an adverse market.

USAF: There is £150m capacity in the USAF which should be used to buy assets off Unite later in 2008. However, they intend to raise more capital for the USAF (£125m minimum)this year that will give £350m capacity through to end 2009. Clearly, the timing for this fund raising is far from ideal currently so it'll be interesting to see how it goes. They don't seem to be in immediate need so they might just hang back until conditions ease.

Regards, Maddox

[maddox] 25/4/2008 10:15

dcomd99,

Good point. Unite did used to have high gearing when they had all their property on their own books. This came down substantially with the launch of the Unite Student Accomodation Fund which raised funds and bought the mature developed properties off them. Their debt exposure will now rest on the property in-development and 'stabilising' (whilst establishing the yield on the property)prior to being sold to the USAF. I'll have a look at this and see what I can find.

Your point has sparked another thought. The valuation of the USAF will vary dependent upon its yield in relation to the market yield on other similar assets. The crunch has certainly increased interest rates and presumably yield expectations and thus can be expected to decrease the value of the fund.

Food for thought.

Regards, Maddox

[dcomd99] 24/4/2008 23:10

Maddox,
Surely Unite has lots of gearing which will become much more expensive. This will affect margins.