Unite Group (UTG) H2 2025 earnings summary

Executive summary

• 2025 saw strong performance in most of the portfolio, with 4.0% rental growth and 95.2% occupancy, though some cities experienced weaker occupancy due to more students living at home and a decline in international postgraduates.

• Strategic repositioning focuses on high-tariff universities, cost efficiencies, and leveraging the Empiric acquisition, with 67% portfolio alignment and ongoing disposals to improve quality.

• Adjusted EPS for 2025 was 47.5p, up 2%, with adjusted earnings up 9% year-over-year.

• GBP 100 million share buyback program launched, funded by disposals and reduced development CapEx, alongside a £186m asset disposal.

• Integration of Empiric is underway, with synergy target increased to £17 million.

Financial highlights

• Like-for-like income growth was 4.9% in 2025, with net operating income up £18m, offset by a 9-10% rise in operating costs due to staffing, insurance, and council tax.

• EBIT margin fell to 65.9% due to lower occupancy and inflationary costs.

• Adjusted EPS increased 2% to 47.5p, with adjusted earnings up 9%.

• Net tangible assets per share fell 2% to 955p, reflecting a 0.5% revaluation deficit and specific write-downs.

• Dividend per share increased 1% to 37.7p.

Outlook and guidance

• 2026/27 guidance is for occupancy at the lower end of 93%-96% and rental growth at 2%-3%, translating to 0%-2% like-for-like income growth.

• Adjusted EPS for 2026 is guided at 41.5p-43p, including Empiric for 11 months, reflecting lower occupancy, higher funding costs, and initial drag from disposals.

• Dividend to be held flat in 2026, with payout ratio temporarily rising to just under 90%.

• Disposals of £300-400m per annum targeted, with one new JV partnership per year.

• Portfolio repositioning and increased alignment to high-tariff universities are expected to underpin medium-term growth.