Unite Share Discussion Threads

[wirralowl] 29/2/2016 09:39

Hi Maddox

Things still seem to be ticking along nicely with UTG, I see..

As an income investor, the news of their intended conversion to REIT status, means that I'm finally likely to buy a stake in UTG this year, to go alongside my UTG1 holding. Suspect I won't be the only one, as we move closer to the conversion date...

I'd expect the REIT yield will be circa 4-5% as a result, which combined with the prospect of a continued growing NAV (and hopefully share price too!), would make me more than happy to hold the shares.

BR,
WO

[maddox] 24/2/2016 15:31

Unite posted their 2015 full year results yesterday, the highlights being:

'Excellent financial performance on all fronts

>> EPRA earnings up 84% to £61.3 million from £33.3 million. Excluding the yield related element of the USAF performance fee, Adjusted EPRA earnings up 49% to £49.5 million.
>> EPRA earnings per share up 66% to 28.6 pence from 17.2 pence in 2014. Excluding the yield related element of the USAF performance fee, Adjusted EPRA EPS up 34% to 23.1 pence.
>> EPRA NAV per share up 33% to 579 pence (2014: 434 pence) making, together with dividends paid, a total return of 37% for the year. The calculation of EPRA NAV per share now reflects an assumption that the convertible bond will fully convert, resulting in dilution of 10 pence.
Full year dividend of 15.0 pence up 34% (2014: 11.2 pence). Final dividend declared of 9.5 pence (2014: 9.0 pence).
Like for like rental growth of 3.8% for the full year (2014: 3.3%).'

Also the outlook is also exceedingly positive, the 2017 pipeline of new build complete and good progress on 2018. The other important news is that Unite will convert to a Real Estate Property Trust (REIT). This provides a beneficial tax status in exchange for Unite paying out 90% of its rental income as dividends - and this will further enhance the dividend yield.

So it's difficult to explain the c.25p near 4% drop in the share price! One explanation might be that Mr Market was expecting even better results or another that perhaps an FI was taking the opportunity to cash-in their winnings? On the face of it - it looks to me that Unite beat the market consensus forecasts - so will need to take a closer look.

Regards Maddox

[maddox] 29/1/2016 13:53

26/01/2016 - 15:10 StockMarketWire

Numis today reaffirms its add investment rating on Unite Group PLC (LON:UTG) and set its price target at 732p.

[maddox] 26/1/2016 10:53

RNS today indicates that UTG's development pipeline is progressing as planned. Another well located site acquired right in the center of Coventry for 2017/18. The scheme is expected to hit UTG's development targets: that is yield on cost for regional developments of >8%. This is significant as it means that UTG is able to find and acquire attractive sites at the right price.

Also, another nice nugget in the RNS is that demand for places at Coventry Uni were up 14% (~3000 more students) this year - so there is unlikely to be a problem filling the rooms.

The RNS.......


Unite Students, the UK's leading developer and manager of student accommodation, has acquired a development site, subject to planning, in the centre of Coventry. It is envisaged that the site will provide a home for approximately 370 students and is scheduled to be open in time for the 2017/18 academic year.
The scheme is expected to achieve returns in line with Unite's targets for regional development and the total development cost, including the cost of the land, is expected to be approximately £24 million. The delivery of the scheme will continue to drive the Group's earnings visibility and NAV growth.
The site is in a prime city centre location in close proximity to the Coventry University campus. Coventry University continues to perform well and has seen UCAS acceptances increase 14% this year. It was named 'University of the Year' at the 2015 Times Higher Education Awards and is home to over 25,000 students.

[maddox] 11/1/2016 14:36

As well as fully owned property Unite run a couple of student property funds of which they own a percentage as well earn management fees, specifically:

USAF - Unite own 22%
LSAV - Unite own 50%

These funds are independently valued - as announced this morning:

'At 31 December 2015, USAF's property portfolio was independently valued at £2,074 million representing a like-for-like increase of 2.3% during the quarter and 13.9% over the full year. The portfolio comprises 26,813 beds in 75 properties across 24 University towns and cities in the UK.

LSAV's investment portfolio was independently valued at £738 million, up 2.5% on a like-for-like basis in the quarter and 17.4% over the full year. LSAV's investment portfolio comprises 4,636 beds across 12 properties in London and three properties in Edinburgh.'

As you can see the growth in value continues to be excellent and as a result they are getting a performance bonus fee.....

'"The strong performance in 2015 has resulted in Unite Students receiving a net performance fee in the region of £20 million."'

....and so will we in due course, as Unite will pay-out 65% of earnings as dividends.

Regards, Maddox

[maddox] 08/10/2015 08:26

Unite went x-Div yesterday for a 5.5p per share payment. This seems to have triggered some selling that has triggered stop-losses and further falls. On the back of the positive valuation and occupancy news it's difficult to see what else might explain the drop. Any other thoughts?

Regards, Maddox

[eggbaconandbubble] 07/10/2015 16:45

Was ist los?

[maddox] 05/10/2015 11:28

Despite the share price volatility we're experiencing Unite is progressing extremely well as confirmed by their fund valuations announced today:

'At 30 September 2015, USAF's property portfolio was independently valued at £2,017 million representing a like for like increase of 2.1% during the quarter (11.1% in the nine months to 30 September). The portfolio comprises 26,813 beds in 75 properties across 24 University towns and cities in the UK.

LSAV's investment portfolio was independently valued at £720 million, up 2.3% on a like-for-like basis in the quarter (14.8% in the nine months to 30 September). Following the practical completion of the 759 bed Angel Lane development in Stratford in August, LSAV's investment portfolio now comprises 4,636 beds across 12 properties in London and three properties in Edinburgh.

The increase in valuations is driven primarily by rental growth and eight basis points of yield compression in both USAF and LSAV on a like-for-like basis in the quarter (54 and 69 basis points respectively in the nine months to September). The overall USAF portfolio is now valued at an average yield of 5.8% and LSAV's portfolio at 5.1%.'

....and the letting demand remains extremely robust:

'The lettings cycle for the 2015/16 academic year is now largely complete. Unite's total portfolio of over 46,000 beds has achieved strong occupancy levels, with 99% of bed spaces let delivering rental growth of 3.8%.'

This last piece of news obviously bodes well for the rest of the year. Place this organic growth on top of the further developments and acquisitions and the stars appear to be very much aligned for Unite.

Regards, Maddox

[maddox] 21/9/2015 16:33

Hi e&b,

my postcard: As I've been highlighting in my posts that UTG is transforming - and this is reflected in the pe metrics question you raise.

UTG was viewed as a NAV growth story (with low earnings and thus high pe) but now UTG's earnings are growing strongly (higher earnings and thus lower pe).

This transformation can also be seen in the strongly rising dividends.

Regards, Maddox

[eggbaconandbubble] 21/9/2015 08:15

According to ADVFN financials the PE to PE average over the last 5 years stands at 37%

Current PE 12.37
PE average over last 5 years 33.31

What am I missing here???

"Answers on a post card to....."

[wirralowl] 28/8/2015 09:50

Cheers for the 'heads up' Maddox. Yeah, interest rate rises look likely to be postponed, but they will still materialize eventually. The FED look as though they're now targeting December or even later, and I think we'll still be a fair while after this (Spring 2016?), so all in all fairly positive for UTG.

UTG is still on my watchlist, but in the recent rout, I spent most of my cash on the likes of IMT, ULVR and DGE, where the yields are larger. I still suspect the market will lurch lower again in the Autumn, and drag everything including quality like UTG down with it, so I've kept some powder dry. The premium to NAV (521p) is still a concern for me and I'd also prefer a higher yield, but I'd be tempted at an entry price around £6 or slightly under, where I see some decent support.

BR,
WO

[mike740] 27/8/2015 17:44

UTG tipped on a US trading site earlier today. Analyst aswel.

8 hours ago - UNITE GROUP
An opportune reversal
BUY.



UNITE Group : An opportune reversal

08/27/2015 | 04:35am
Opinion : Bullish above GBp 0
Target price : GBp 700
Stop loss: GBp 604.5
LONDON STOCK EXCHANGE
Real Estate Development & Operations
The upward trend could come to support UNITE Group in the coming sessions.

Graphically, buyer flows are reduced. If the trend is now neutral in the short term, profit taking is part of a rebound on the GBp 627 and therefore does not affect the upward trend in the medium and long term.

Investors should watch the security close to GBp 627 to take advantage of a new upward acceleration in the direction of recent highs near GBp 700. A stop loss is placed under GBp 627.

[eggbaconandbubble] 27/8/2015 15:49

Great idea! Build a block of flats and rent them out to students. Or maybe just buy a load more UTG shares!

[maddox] 27/8/2015 14:17

Hi Wirral Owl if you are watching,

As we have discussed above, low interest rates are good for Unite – and it is highly unlikely the UK would lead the US in raising rates. So the news that in response to the market turbulence Bill Dudley, the president of the New York Federal Reserve, made it pretty clear that the Fed will not be putting up rate rise soon has got to be positive. As they say 'Every cloud….

Regards, Maddox

[maddox] 27/8/2015 14:12

Hi e&b,

lol. A variable tone LED lamp...not as romantic as a lava lamp.

Away nice to have a real-life example. Universities look to have all first years in student accommodation - Bath is not alone in no longer being able to fulfill this goal. Demand far exceeds supply.

Regards, Maddox

[r ball] 26/8/2015 22:07

is EPR a Unite proxy?

[eggbaconandbubble] 26/8/2015 22:03

No offence taken.

For a start not all Chinese are going to back out. This years new intake will have already paid fees rent etc and handed over a deposit. Other students will be 1/3rd or 2/3rds through their degree so doubtful to pull out + any slack should easily be taken up by other students.

Just by chance got talking to a English student today who is going up to Bath Uni as a fresher and is renting a Unite room. She says that 150 new students were not automatically provided with rooms and had find their own accommodation.
Her first year's course is 33 weeks and she wanted to rent for 39 but Unite insisted on a min of 42!

She did add that TV was provided communally but each room has a LED lamp with varying tones!!!!! I guess the modern equivalent of a lava lamp!

[discodave4] 26/8/2015 21:17

Apologies, how many of the 3.75% are in Unite Student rental accommodation?. Let's say 50%, pick a number, either way it's potentially lost income.DD

[discodave4] 26/8/2015 21:15

No offence intended, 3.75% of their £130m pa rental income!. Please read my last post.ThanksDD

[discodave4] 25/8/2015 21:55

Suppose if not Chinese students the places will still be filled....or would they?.Was just trying to show that the current issues with the Chinese economy does impact, or could impact, on more sectors in the UK than you would imagine.GLDD

[maddox] 25/8/2015 21:16

Hi DD,

Yep agreed. Nevertheless, it is difficult to construct a scenario that will undermine Unite's growth prospects.

Will the current market turbulence cause fewer or more Chinese students to travel abroad? With the demand for and supply of accommodation already hugely out of balance and shifting further (the cap on students removed)....will Unite miss their numbers? I doubt it.

Regards, Maddox

[discodave4] 25/8/2015 19:50

MaddoxAccording to UKCISA the number of Chinese students far exceeds any other nationality (nearly 88,000 in 2013/14).http://tinyurl.com/mohqc8lHave UTG on my watch list so no hidden agendas!.Apologies if the link doesn't work properly, always have problems when using an IPad.GLDD

[maddox] 25/8/2015 14:00

Hi Guys,

I'm intrigued that Unite hasn't yet started its recovery back up to c.700p. Whilst I appreciate that Mr Market has a tendency to mark down shares that have recently made big gains - this is particularly perverse in Unite's case.

Firstly, Unite is an extremely defensive investment in the nature of its business model, market and conservative capital structure.

Secondly, it is very difficult to see any adverse consequences for Unite from the China fall-out, quite the reverse. This market turbulence is likely to further postpone the envisaged rise in interest rates - that's good news for Unite. Also, there is probably an even greater incentive to park ones off-spring in the UK for their education than there was before.

It'll probably take a little while for Mr Market to take these points on-board but I expect he'll get there.

Regards, Maddox

[mike740] 07/8/2015 13:28

UTG UNITE GROUP PLC.....

UNITE Group plc Given Add Rating at Numis Securities Ltd (UTG)
August 6th, 2015

Numis Securities Ltd re-affirmed their include evaluation on shares of UNITE Group plc (LON:UTG) in a resaerch note released onWednesday, MarketBeat Scores reports. The broker currently has a GBX 710 ($11.09) price target on the stock. !

In other UNITE Group plc news, insider Allan,Mark sold 12,000 shares of the business’s stock in a trade on Thursday, June 25th. The shares were offered at an average price of GBX 5.85 ($0.09), for a whole trade of GBP702 ($1,096.53).

Several other research analysts have issued reports on UTG. Finally, Jefferies Group reiterated a buy rating and set a GBX 610 ($9.53) price target on shares of UNITE Group plc in a investigation notice on Monday, July 20th. The stock has been rated by two investment analysts with a hold rating and a buy rating has been imputed by three to the stock. The stock has an average rating of Purchase and an average cost target of GBX 678.60 ($10.60).

UNITE Group plc (LON:UTG) opened at 654.50 on Wednesday. UNITE Group plc has a-12 month low of GBX 395.60 and a 12 month high of GBX 658.16. The business ‘s 50-day moving typical price is GBX 606.67 and its 200-day moving average price is GBX 577.57.

The company also recently announced a dividend, which will be distributed on Friday, November 6th. Stockholders of record on Thursday, October 8th will be compensated a GBX 5.50 ($0.09) dividend. The ex-dividend date is Thursday, October 8th. This represents a dividend yield of 0.84%. !

The properties of the Company’s provide accommodation close to University campuses, transportation and nearby facilities. It operates under two sections: Property and Businesses. The Businesses segment manages rental properties, owned directly by the Business or by joint ventures. The Property segment of the Company’s undertakes improvement and the acquisition of qualities. It runs across the UK in 25 cities. Its services include Wireless Lan, utilities, insurance, maintenance, round-the-clock security and fortnightly specialist cleaning of communal areas. It operates a small number of specialist funds and joint ventures with investment partners and has also invested in.