Unite Group (UTG) H2 2024 earnings summary

Executive summary

• Achieved 5% EPS and dividend growth in 2024, with 9.6% return on equity and a strong balance sheet supporting future growth.

• Outperformed sector peers despite a decline in international students, driven by strong university partnerships and mid-market price positioning.

• Maintained high occupancy at 97.5% and delivered 8% rental growth, supporting a 5% increase in dividend.

• Portfolio 93% aligned to Russell Group cities, with robust student demand and limited impact from international demand changes.

• Entering 2025 with strong momentum, supported by a fully funded pipeline and a strong balance sheet.

Financial highlights

• Adjusted EPS grew 5% to 46.6p; dividend per share increased to 37.3p (+5% YoY); net tangible assets per share increased 6% to 972p.

• Like-for-like rental growth of 8.2% and occupancy at 97.5% for 2024/25.

• Net operating income rose 8% for like-for-like properties, driven by high occupancy and rental growth.

• EBIT margin stable at 68.1%, with expectations to improve to 68.5% in 2025.

• Loan-to-value reduced to 24% (from 28%); net debt:EBITDA at 5.5x.

Outlook and guidance

• Targeting 4%-5% rental growth and 97%-98% occupancy for the next academic year.

• 2025 guidance: 2%-4% adjusted EPS growth, 8%-10% total accounting returns before yield movements.

• Medium-term outlook: mid-single digit EPS growth, EBIT margin >70%, and £250-300m annual development completions.

• Rental growth outlook normalizing to CPI plus 50-100bps as inflation moderates.

• Expecting margin improvement as cost pressures ease and development activity accelerates.