Interim Results
Unite Group PLC
5 September 2001
UNITE ANNOUNCES INTERIM RESULTS
For the six months ended 30 June 2001
The UNITE Group plc, the UK's leading specialist provider of student and NHS
key worker accommodation services, today announced its interim results.
HIGHLIGHTS
* Increase in number of secured bedspaces to 19,609 from 10,450 at the
end of 2000
* Successful acquisition of UniLodge Holding Ltd for a total
consideration of £108.8m and raising of £85.8m of equity through a
placing and open offer
* Confirmation by University of Sheffield as sole Preferred Bidder in
the UK's largest accommodation transfer scheme of 5,500 beds
* Announcement today of a 438-bed scheme in Sheffield
* Agreements signed on schemes for Swindon and Marlborough NHS Trust
and the University of Northumbria
* Net assets up 204% to £180.9m (31/12/00: £88.7m)
* Net assets per share up 34% to 268p per share (31/12/00: 200p per
share)
* Profit Before Tax up 54% to £1.31m (June 2000: £0.85m)
* Earnings per share up 14% to 2.93p (June 2000: 2.52p)
* Interim dividend up 22% to 0.833p per share (June 2000: 0.683p)
Commenting on the results, Geoffrey Maddrell, Chairman of UNITE, said:
'UNITE has created a new industry sector for accommodation services to
students and NHS key workers. Today we own 70 properties in 17 cities across
the UK and have made major progress in achieving our strategic target of
60,000 bedspaces by the end of 2003, in particular through our acquisition of
UniLodge. The announcement by the University of Sheffield of our status as
sole Preferred Bidder for the UK's largest accommodation transfer scheme,
confirms the strength of UNITE's reputation and its market leading position.'
Chairman's Statement
In the first six months of 2001, UNITE has made a number of important moves
reinforcing its position as the UK's leading provider of accommodation
services to students and NHS key workers. Of particular importance has been
the acquisition of UniLodge and the associated capital raising, as well as the
confirmation as sole Preferred Bidder in The University of Sheffield's highly
significant accommodation transfer scheme. As a result we now have 19,609
secured beds spaces and have raised funding to support our growth targets.
UNITE is a service business with strong asset backing which has successfully
created a new industry sector for accommodation services to students and NHS
key workers. From a substantial leadership position, our priority during the
reporting period has been to demonstrate major progress in implementing the
strategy and in achieving our target of 60,000 secured bed spaces by the end
of 2003.
We currently own 70 properties in 17 cities across the UK, providing
comprehensive development, accommodation and facilities management services to
our customers via a regional office network in 5 cities - Bristol, London,
Leeds, Salford and Edinburgh. We are building services around this regional
structure and beginning to achieve critical mass with over 1,000 bed spaces in
five of our key target cities across the UK.
Key Strategic Moves
On 1 June 2001 we announced the acquisition of UniLodge and the placing of
23,205,557 million shares to raise £85.8 million of new equity through a
placing and open offer. This acquisition not only added 4,091 secured bed
spaces, but more importantly enabled us to gain critical mass, key to our
acquisition plans in Manchester, Liverpool and Newcastle. It has also
supported our plans in Scotland, adding three new properties. The well planned
integration of UniLodge was put into action immediately upon announcement and
is progressing ahead of schedule, operational benefits and synergies are
forecast to come through in the second half of the year.
A further key success has been the progress achieved in securing arrangements
with Universities and NHS Trusts under the Government's Public Private
Partnership Initiative. In a highly significant development for our sector, we
were delighted to be confirmed as Preferred Bidder in the accommodation
transfer scheme of some 5,500 beds for the University of Sheffield.
Significant management time was devoted to the UniLodge acquisition and the
University of Sheffield transaction in the first half of the year.
Financial Highlights
In the first six months net assets grew to £180.9 million (267.7 pence per
share) from 88.7 million or 200.0 pence per share at 31 December 2000. After
adjusting for the impact of the placing and open offer and before dividends,
net assets grew in the first six months by 9.89 million which is 26% ahead of
the comparable period last year (£7.85 million). Profit before tax for the six
months increased by 54% to £1.31 million from £0.85 million in the first half
of 2000. Earnings per share grew to 2.93 pence per share from 2.52 pence in
the comparable period.
The new equity raised in conjunction with the acquisition of UniLodge will
stand us in good stead to deliver the growth that we see in our expanding
market place. We were very encouraged by the support we received from both
existing and new shareholders.
Cash at bank and in hand as at 30 June 2001 was £34.0 million as a result of
the equity raising. We continue to fund ourselves on a flexible basis, so as
to enable us to refinance our portfolio as the large planned construction
programme is completed. Net debt as a percentage of property value was 43% at
30 June 2001 compared to 53% at 31 December 2000, although this ratio will
increase as the cash raised from the equity issue is invested in new projects.
Dividend
The Board is proposing an interim dividend of 0.833 pence per share (2000:
0.683 pence per share). The interim dividend will be paid on 14 November 2001
for shareholders on the register at close of business on 19 October 2001. The
shares become ex-dividend on 17 October 2001. We remain committed to providing
shareholders with growth in income in line with increases in our
profitability, whilst taking into account the considerable investment
opportunities inherent in our strategy.
Operations
Alongside the UniLodge acquisition, we have continued to focus on our long
term targets and, to this end, we acquired a number of new schemes, including
two properties (the acquisition of which was announced in June 2001),
representing a total of 1,117 beds in Manchester and Sheffield. We also
acquired a 505 bed site at Market Gate in Bristol and have made progress in
completing the construction of a number of existing schemes such as Margaret
Rule Hall in Portsmouth and Hotwells Road in Bristol. These will be ready for
the student in-take this Autumn.
In addition to the University of Sheffield stock transfer opportunity, we have
signed agreements on a 141 bed scheme for Swindon and Marlborough NHS Trust
and a 345 bed scheme for the University of Northumbria.
Within our Accommodation Services division, we have continued to deliver value
added services and to roll out our on-line booking service, signing contracts
with a number of Universities. For the coming academic year we have also
initiated a test programme of added value services such as insurance.
People
The Group continues to grow in number in line with our plans. The Board is
particularly pleased with the smooth integration of the UniLodge team who have
brought with them valuable skills and experience. We warmly welcome all who
have recently joined us. We are also very pleased to welcome to the Board
Simon Bernstein who joined as Group Finance Director. At senior management
level we welcome Andy Doyle, who joined us as Head of Accommodation Services,
Paul Morland as Head of Strategy and Added Value Services, David Livingstone
as Director of Project Services and John Tonkiss as head of our manufacturing
operation.
It was a great tribute to the whole UNITE team, that in July, the Company was
awarded the title of South West Business of the Year 2001. This award
recognises the significant achievements of the group in expanding nationally
and developing new services, such as the NHS Hotel in London that offers
accommodation on a nightly basis to key workers in the capital.
All of these developments are being supported by training and development
programmes, which have been stepped up on a well structured basis.
Outlook
The Group is making major progress in the achievement of its strategy. We have
not only increased the number of secured bed spaces from 10,450 at the end of
2000 to 19,609 at the end of June 2001, but also significantly increased the
number of schemes in our uncontracted pipeline, which we plan to convert into
value for money accommodation over the coming months.
At the same time major investment in people and processes is underway, to
ensure that we implement our growth strategy in a controlled ad effective
manner.
In summary, I remain confident of our ability to achieve the strategic
objectives inherent in our three year plan and in particular, our target of
60,000 secured bed spaces by 2003.
Geoffrey Maddrell
Chairman
5 September 2001
Enquiries to:
Nicholas Porter, Chief Executive Tel: 0117 907 8112
Simon Bernstein, Finance Director
The UNITE Group plc
Emma Kane, Chief Executive Tel: 020 7955 1410
Redleaf Communications Ltd Mob: 07876 338339
Richard Thompson, Director Tel: 020 7426 9000
Martin Lampshire, Director
Teather & Greenwood Limited
Consolidated Balance Sheet
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 Dec
30June 30 June 2000
2001 2000
Note £'000 £'000 £'000
Fixed assets
Intangible assets 12,717 53 524
Tangible assets
Investment and development properties 3 253,686 126,417 151,438
Other fixed assets 5,208 2,292 4,474
Investments 275 - 273
259,169 128,709 156,185
Joint venture undertaking 4
Share of gross assets 41,985 18,279 41,390
Share of gross liabilities (28,995) (12,763) (28,448)
12,990 5,516 12,942
284,876 134,278 169,651
Current assets
Stock and work in progress 9,112 936 5,689
Debtors 26,113 7,672 11,044
Cash at bank and in hand 33,964 19,429 4,276
69,189 28,037 21,009
Creditors: amounts falling due within 5 (56,895) (42,347) (31,512)
one year
Net current assets/(liabilities) 12,294 (14,310) (10,503)
Total assets less current liabilities 297,170 119,968 159,148
Creditors: amounts falling due after 6 (116,051) (49,481) (70,252)
more than one year
Provisions for liabilities and charges (240) (241) (240)
Net assets 180,879 70,246 88,656
Capital and Reserves
Called up share capital 16,889 11,075 11,075
Share premium account 71,684 34,722 34,752
Merger reserve 40,178 - -
Revaluation reserve 48,051 22,704 39,513
Profit and loss account 4,077 1,745 3,316
Equity shareholders' funds 180,879 70,246 88,656
Net assets per ordinary share (pence per 267.7 158.6 200.0
share)
Consolidated Profit and Loss Account
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 Dec
30 June 30 June 2000
2001 2000
Note £'000 £'000 £'000
Group turnover and share of joint 10,109 5,669 30,444
venture
Less: share of turnover of joint venture (770) (191) (492)
Group turnover 7 9,339 5,478 29,952
Cost of sales (2,868) (3,380) (21,359)
Gross profit 6,471 2,098 8,593
Administrative expenses (2,576) (789) (3,013)
Group operating profit 3,895 1,309 5,580
Profit/(loss) on disposal of investment
properties (50) 361 372
Share of results of joint venture 4 552 115 381
Profit on ordinary activities before 4,397 1,785 6,333
interest and taxation
Net interest payable (3,089) (935) (3,307)
Profit on ordinary activities before 1,308 850 3,026
taxation
Taxation 8 - - -
Profit on ordinary activities after 1,308 850 3,026
taxation
Dividends paid and proposed (585) (303) (908)
Retained profit for the financial period 723 547 2,118
Basic earnings per share (pence per 9
share) 2.93 2.52 7.71
Fully diluted earnings per share (pence 9
per share) 2.86 2.41 7.54
The results in both 2000 and 2001 arose from continuing operations.
Statement of Total Recognised Gains and Losses
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 Dec
30 June 30 June 2000
2001 2000
£'000 £'000 £'000
Profit for the financial period 1,308 850 3,026
Unrealised surplus on revaluation of 6,669 6,272 15,082
properties
Unrealised surplus on revaluation of joint - 728 8,336
venture
Unrealised profit on trading with joint 1,907 - 391
venture
Total recognised gains and losses relating 9,884 7,850 26,835
to the period
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 Dec
30 June 30 June 2000
2001 2000
£'000 £'000 £'000
Cash flow from operating activities (4,156) 1,167 2,836
Returns on investments and servicing of (3,573) (820) (5,045)
finance
Taxation (7) - (28)
Capital expenditure and financial investment (16,573) (43,162)(63,749)
Acquisitions and disposals (1,216) - -
Equity dividends paid (605) (266) (569)
Cash outflow before management of liquid
resources and financing (26,130) (43,081)(66,555)
Financing
Issue of shares (net of costs) 38,088 36,367 36,397
Increase in debt and financing 17,730 24,279 32,570
55,818 60,646 68,967
Increase in cash in the period 29,688 17,565 2,412
Reconciliation of Net Cash Flow to Movement in Net Debt
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 Dec
30 June 30 June 2000
2001 2000
£'000 £'000 £'000
Increase in cash in the period 29,688 17,565 2,412
Cash inflows from increase in debt (17,730) (24,279) (32,570)
financing
Loan notes issued (9,300) - -
Loans acquired with subsidiary (31,865) - -
New hire purchase contracts (181) (42) (477)
Amortisation of loan stock issue costs (72) (72) (143)
Movement in net debt in the period (29,460) (6,828) (30,778)
Net debt at beginning of the period (79,663) (48,885) (48,885)
Net debt at end of the period (109,123) (55,713) (79,663)
Note of Consolidated Historical Cost Profit and Losses
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 Dec
30 June 30 June 2000
2001 2000
£'000 £'000 £'000
Reported profit on ordinary activities before 1,308 850 3,026
taxation
Realisation of property revaluation gains of 38 474 474
previous years
Historical cost profit on ordinary activities 1,346 1,324 3,500
before taxation
Historical cost profit for the year retained
after taxation and dividends 761 1,021 2,592
Reconciliation of Movement in Shareholders' Funds
Unaudited Unaudited Audited
6 months 6 months Year to
to to 31 Dec
30 June 30 June 2000
2001 2000
£'000 £'000 £'000
Profit attributable to ordinary 1,308 850 3,026
shareholders
Dividends paid and proposed (585) (303) (908)
723 547 2,118
Net surplus on revaluations 8,576 7,000 23,809
New share capital subscribed (net of 82,924 36,367 36,397
issue costs)
Net addition to shareholders' funds 92,223 43,914 62,324
Opening equity shareholders' funds 88,656 26,332 26,332
Closing equity shareholders' funds 180,879 70,246 88,656
Notes to the Interim Report
1 Basis of preparation
The Interim Results do not constitute statutory accounts within the meaning of
S240 of the Companies Act 1985.
The Interim Report is prepared on the basis of the accounting policies set out
in the most recent set of annual Financial Statements.
The Interim Report will be sent to all shareholders in early September 2001.
Copies will be available to the public from the Company's registered office at
Lawrence House, Lower Bristol Road, Bath.
2 Goodwill
On 28 June 2001 the Group completed the acquisition of UniLodge for a
consideration (including the costs of the acquisition) of £56 million,
satisfied by the issue of shares, £45 million, loan stock, £9 million, and
cash £2 million. The fair value of the net assets acquired, adjusted for the
costs to complete properties, has been provisionally assessed at £44 million,
net of £32 million of debt, resulting in £12 million of goodwill.
3 Investment and development properties
Completed Developments in Properties
developments progress held for future
development Total
£'000 £'000 £'000 £'000
Cost or valuation
At 1 January 2001 119,450 22,396 9,592 151,438
Additions- acquisitions 57,055 20,122 853 78,030
- other 3,444 15,651 304 19,399
Transfers 3,646 (1,717) (1,929) -
Disposals (1,850) - - (1,850)
Revaluations 3,095 3,574 - 6,669
At 30 June 2001 184,840 60,026 8,820 253,686
At 31 December 119,450 22,396 9,592 151,438
2000
At 30 June 2000 92,750 26,186 7,481 126,417
4 Joint venture undertaking
Unaudited
30 June 2001
£'000 £'000
Group
Cost or valuation and net book value
At beginning of period 12,942
Share of operating profit for period 552
Share of interest payable for period (504)
Share of retained profit for period 48
Revaluation -
At end of period 12,990
Notes to the Interim Report continued
5 Creditors: amounts falling due within one year
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2001 2000 2000
£'000 £'000 £'000
Build loans and other short term 27,035 25,662 16,387
financing
Other creditors 29,860 16,685 15,125
56,895 42,347 31,512
6 Creditors: amounts falling due after more than one year
Unaudited Unaudited Audited
30 June 2001 30 June 2000 31 Dec 2000
£'000 £'000 £'000
Long term borrowings 116,051 49,481 67,552
Other creditors - - 2,700
116,051 49,481 70,252
7 Segmented analysis of operations
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 June 2001 30 June 2000 31 Dec 2000
£'000 £'000 £'000
Turnover
Investment activities 5,036 2,015 8,173
Development activities 4,303 3,463 21,779
9,339 5,478 29,952
Profit before interest and tax
Investment activities 3,367 1,490 5,615
Development activities 1,030 295 718
4,397 1,785 6,333
8 Taxation
There is no corporation tax charge in the period due to the availability of
capital allowances and tax losses to offset against the taxable profits
accrued.
9 Earnings per Share
The calculation of the earnings per ordinary share is based on the profit
available to ordinary shareholders of £1,308,000 (2000 interim - £850,000;
2000 final - £3,026,000) and on a weighted average number of ordinary shares
in issue during the six months ended 30 June 2001 of 44,699,277 (2000 interim
- 33,659,228; 2000 final - 39,225,847).
On a fully diluted basis the weighted average number of ordinary shares was
45,726,249 (2000 interim - 35,234,886; 2000 final - 40,128,789).
ENDS
Latest directors dealings
- 4 minutes ago Real Estate Investors
- 19 minutes ago WPP
- 21 minutes ago Spectris
- 43 minutes ago Clarkson
- 51 minutes ago Smithson Investment Trust