HIGHLIGHTS
Strong financial performance
Net Portfolio Contribution ("NPC") up 74% to £19.1 million (2011: £11.0 million);
Adjusted earnings per share up 280% to 9.9 pence (2011: 2.6 pence), representing a yield on opening adjusted NAV of 3.1%;
Adjusted net asset value ("NAV") per share up 10% to 350 pence (2011: 318 pence), equating to a total return on equity (including dividends) of 11.3%;
Final dividend increased to 3.0 pence per share (2011: 1.25 pence), making 4.0 pence for the full year (2011: 1.75 pence).
Portfolio quality enhanced further
£209 million development programme completed on time and to budget;
£128 million of non-core assets sales target achieved;
90% of the UNITE investment portfolio (including share of co-investment vehicles) is now classified as core (2011: 82%);
London weighting of 45% increasing to over 50% when portfolio built-out.
Capital structure strengthened
Adjusted loan-to-value ratio reduced to 52% from 54% at December 2011;
Weighted average loan maturity extended to 4.9 years (2011:2.9 years) and average cost of debt reduced to 5.5% (2011: 5.7%);
Strategically important joint venture with GIC extended (to 2022) and expanded (to £1 billion), providing greater visibility of development pipeline financing and returns and allowing UNITE to accelerate London development activity while returns remain compelling.
Positive outlook
Student numbers for 2013/14 academic year likely to increase by 25,000 to 30,000 following positive Government policy announcements and 3.5% growth in applications;
Net positive demand/supply movement of approximately 18,000 after taking into account 9,500 new beds in the market for 2013/14;
Reservations for 2013/14 at 62% as at 5 March 2013 (2012: 59%);
Three developments secured for delivery in 2014 and 2015, expected to contribute a further 19 pence per share of NAV uplift;
Good progress with LSAV London development plans, with first project secured (759 beds) and a second scheme (950 beds) under lock-out.
Rental growth expected to be in line with recent years.
Mark Allan, Chief Executive of The UNITE Group, commented:
"2012 was a year of continued momentum for UNITE, with the benefits of the work we have done to enhance our business model and strengthen our footprint in the sector reflected in our financial results. Our deep understanding of the Universities we work with, our student customers and knowledge of the market context ensure we can continue to build a sustainable, market-leading position in the months and years to come. The extension of our significant joint venture with GIC during the year also illustrates the continued appeal of the student accommodation sector for UK and international investors.
"In light of the progress made during the year and our strong performance across all our key financial metrics, we are pleased to announce a substantial increase in the total dividend for the year, demonstrating our confidence in the strength of our business and the prospects it offers for attractive future returns."
