Finals/Placing&OpenOffer,etc
Unite Group PLC
15 March 2000
Not for release, publication or distribution in or into
the United States of America, Canada, Australia or Japan.
The Unite Group plc
Announcement of audited results for the year ended
31 December 1999
Placing and Open Offer to raise £38.5 million
Move to Official List
The Unite Group plc is the UK's leading specialist
provider of student residential accommodation and an
independent provider of key worker accommodation to NHS
Trusts.
Highlights
- Net assets up 155 per cent. to £26.3 million (1998:
£10.3 million)
- NAV per share up 108 per cent. to 104p (1998: 50p)
- Dividend of 1.05p per share
- Earnings per share up 65 per cent. to 3.69p (1998:
2.24p)
- Expansion of geographic coverage
- Placing and Open Offer at 203p to raise £38.5 million
(before expenses)
- Move to the Official List
Geoffrey Maddrell, Chairman, said:
'This has been a momentous year for Unite. Our focused
strategy continues to deliver results ahead of
expectations and we have put in place a flexible
structure for long-term growth.
'We have a series of exciting projects in the pipeline
and a dynamic and determined management team. The
Placing and Open Offer will provide funds for continued
implementation of our strategy. I am fully confident of
the Group's ability to deliver on its growth plans.'
An analysts' meeting will be held at the offices of
Robert Fleming & Co. Limited, 25 Copthall Avenue, London
EC2 at 9.45 am (for 10.00 am) today, 15 March 2000.
For further information, please contact:
The Unite Group plc 15 March: 020 7253 2252
Nicholas Porter, Chief ExecutiveThereafter: 0117 907 8100
David Ransome, Finance Director
Robert Fleming & Co. Limited 020 7638 5858
Simon Gorringe
Teather & Greenwood Limited 020 7426 9073
Richard Thompson/Martin Lampshire
Ludgate Communications 020 7253 2252
Tim Davis/Denise Peplow
Robert Fleming & Co. Limited, which is regulated by The
Securities and Futures Authority Limited, is acting for
The Unite Group plc and no one else in connection with
the Placing and Open Offer and will not be responsible to
anyone other than The Unite Group plc for providing the
protections afforded to customers of Robert Fleming & Co.
Limited.
This announcement has been approved by Robert Fleming &
Co. Limited for the purposes of section 57 of the
Financial Services Act 1986.
Chairman's Statement
Introduction
I am pleased to announce that Unite has had a very
successful year. We have implemented the strategy
outlined when we floated on AIM in June 1999 and have
achieved performance ahead of expectations.
We have continued to drive the expansion and development
of Unite's position as the UK's leading provider of
student residential accommodation and as an independent
provider of accommodation for key workers in the NHS
sector.
Unite's portfolio now comprises some 36 properties. 19
of these properties are completed schemes, providing a
total of 1,592 beds; nine properties are in the course
of development and eight are held for future development,
which are expected to provide over 1,000 beds in
aggregate when fully completed. The Group is in active
negotiations in relation to a further 12 potential
schemes, which the Directors estimate could add over
2,500 beds to the Group's portfolio.
Unite is proposing to raise £38.5 million (before
expenses) by way of a Placing and Open Offer to fund the
continuing expansion of the Group and has applied for its
ordinary shares to be admitted to the Official List.
Financial performance
The results for the year ended 31 December 1999 show an
increase in net assets of 155 per cent. to £26.3 million
(1998: £10.3 million), reflecting the growth of the
business in the year. Net asset value per share
increased by 108 per cent. to 104p (1998: 50p), that
percentage increase reflecting the new shares issued
during the year.
Turnover increased by 102 per cent. to £11.1 million
(1998 alternative basis: £5.5 million; 1998: £3.5
million). Profit before tax amounted to £842,000 (1998
alternative basis: £580,000; 1998: £227,000). Basic
earnings per share are up 65 per cent. to 3.69p (1998
alternative basis: 2.24p; 1998: 2.21p). The Company
ended the year with net cash of £1.8 million. (1998:
£0.4 million).
The Board is recommending a dividend of 1.05p per share,
which will be covered 3.2 times. Subject to the approval
of shareholders, the dividend will be paid on 16 May 2000
to shareholders on the register on 31 March 2000.
National expansion
The focus of the Board has been to develop a programme of
national expansion. We are undertaking schemes in
Portsmouth, Manchester and Exeter, as well as in Bath,
Bristol and London. The recent opening of our Leeds
office has enhanced our ability to develop awareness of
our product and brand across the North of England.
Our joint venture in London with Peabody Trust, Peabody
Unite, performed strongly throughout the year. Its first
scheme was opened in October 1999 and let to Barts and
the London NHS Trust. Work also commenced during the
year on two other substantial developments, which
together are set to deliver a further 513 rooms for NHS
key workers during 2000.
Unite's integrated solutions
The Group continues to develop the range of products and
services which it offers institutions as solutions to
their accommodation requirements. Unite adopts an
integrated approach, which includes planning, design,
development, investment, and subsequent leasing and
facilities management.
In addition to the traditional organic development
undertaken by the Group, the Board expects that
opportunities to acquire existing stock of accommodation
from institutions, as well as from other property
developers, will form an increasingly important element
of the Group's activities in the future.
The year has seen significant advances in the procurement
and production facilities at our manufacturing and
finishing division, with a notable highlight being the
successful installation of the Group's innovative pre-
fabricated 'pod' bedrooms in Unite House, our flagship
scheme in Bristol.
We have also grown our facilities management business,
UNITEfm+, in line with the Group's expansion.
Management and employees
We have recruited experienced personnel to head-up the
design & build, finishing and facilities management
operations. Further key appointments have been made in
the areas of finance, human resources, research and
information technology.
Across the Group, recruitment activity at all levels has
been extensive and we have now established an
infrastructure to service a much larger business.
Placing and Open Offer
The Company is proposing to raise £36.5 million (net of
expenses) by way of a Placing and Open Offer of
18,985,473 new ordinary shares. The proceeds will be
used to continue the expansion of Unite's property
portfolio and the growth of its activities. The Group
has a strong organic development pipeline, with some 17
properties either in the course of construction or
refurbishment, or acquired for development. The Group is
also shortlisted for stock transfers with three
institutions and the Board expects further institutions
to adopt this approach to their ongoing accommodation
requirements.
The Open Offer will be made on the basis of three new
ordinary shares for every four existing ordinary shares
held on the record date, which is 6 March 2000. The
offer price is 203 pence per new ordinary share and the
last date for application is 5 April 2000. Robert Fleming
& Co. Limited is acting as the Company's sponsor.
Each of the Directors has undertaken to take up shares in
the Open Offer amounting in aggregate to 44,445 new
ordinary shares. 14,541,305 new ordinary shares,
representing 76.6 per cent. of the Open Offer have been
placed firm by Teather & Greenwood Limited with
institutions and other investors, which will
significantly widen the shareholder base of the Company.
4,399,723 new ordinary shares have been placed subject to
recall to satisfy valid applications under the Open
Offer.
Admission to the Official List
Application has been made to the London Stock Exchange
for the ordinary shares of the Company to be admitted to
the Official List. This represents a significant step in
the development of the Company and the Board believes
that the new listing should enhance the Group's status
and profile and help strengthen the capital base of the
Company. The Company's loan stock will remain on AIM.
Current trading and prospects
Since the year end, we have continued to grow our
portfolio with the acquisition of two properties in
Manchester and a further two in Bristol. The Board
expects to exchange contracts on a third property in
Bristol in the near future.
The Manchester acquisition was particularly significant
as it represented Unite's first purchase of a completed
development from a third party, its first scheme let
directly to students and the first scheme implemented by
the Group's Leeds office.
The Group's rental income has also increased as a result
of the Manchester acquisition and the Directors expect a
further significant uplift following the completion of
the Unite House development in Bristol.
Unite has established a firm foothold for its integrated
products and services in a long-term growth market which
is resistant to major business cycles. We have a
carefully constructed strategy, a series of projects in
the pipeline and a dynamic and determined management.
The Board believes that the prospects for the Group are
excellent and looks forward to the coming year with great
confidence.
Geoffrey Maddrell
Chairman
15 March 2000
The Annual Report and Accounts for the year ended 31
December 1999 will be posted to shareholders today,
together with a prospectus in connection with the Placing
and Open Offer. Further copies of both documents will be
available from the Company up to and including 7 April
2000.
The annual general meeting of the Company will be held at
10.00 am on 7 April 2000 at 10 Old Bailey, London EC4M
7NG. An extraordinary general meeting to approve matters
in connection with the Placing and Open Offer will be
held at the same venue at 10.05 am, or as soon thereafter
as the annual general meeting concludes or is adjourned.
Application forms are personal to shareholders and may
not be transferred except to satisfy bona fide market
claims. Shareholders should be aware that the Open Offer
is not a rights issue and that entitlements to new
ordinary shares which they do not take up under the Open
Offer will not be sold in the market for their benefit.
Notes to Editors
Key data
- In June 1999, Unite was admitted to trading on AIM at
85 pence per share. In October 1999, Unite raised a
further £1.5 million through an institutional placing
at 125 pence per share.
- Assuming full subscription under the Open Offer at the
Placing price of 203 pence per share, Unite will have a
market cap. of £89.9 million, based on 44,299,438
shares in issue. This compares to a price of 225 pence
per share at the close of business on 14 March 2000,
and a market cap. at that date of £57.0 million.
- It is expected that admission to the Official List will
become effective, and dealings on the Official List
will commence, on 11 April 2000.
Peabody Trust
Peabody Trust is London's longest-standing housing
association and its primary aim is to provide social
housing in London. It is London's largest charitable
housing provider and currently owns or manages over
19,000 homes, housing approximately 40,000 people, and
employs approximately 600 full time staff. Peabody Trust
has an established reputation with London borough
councils and planning authorities, having worked with
most of them over many years.
Consolidated balance sheet
at 31 December 1999
Note 1999 1998
£000 £000 £000 £000
Fixed assets
Intangible assets 65 63
Tangible assets
Investment and
development properties 2 72,974 36,452
Other tangible fixed
assets 1,989 420
------ ------
74,963 36,872
Joint venture undertaking 3
Share of gross assets 12,967 76
Share of gross liabilities(8,411) (50)
------ ------
4,556 26
------ ------
79,584 36,961
Current assets
Stocks 1,658 3,372
Debtors 6,164 2,966
Liquid resources - 2,663
Cash at bank and in hand 1,864 401
------ ------
9,686 9,402
Creditors: amounts falling
due within one year
Build facilities and other
short term borrowings (24,246) (10,982)
Other creditors (10,959) (6,144)
------ ------
Net current liabilities (25,519) (7,724)
------ ------
Total assets less current
liabilities 54,065 29,237
Creditors: amounts falling
due after one year
Long term borrowings
(including convertible debt) (26,503) (18,722)
Other creditors (986) -
Provisions for liabilities
and charges (244) (248)
------ ------
Net assets 26,332 10,267
====== ======
Capital and reserves
Called up share capital 5 6,329 5,136
Share premium account 3,101 2
Revaluation reserve 16,178 4,988
Profit and loss account 724 141
------ ------
Equity shareholders' funds 26,332 10,267
====== ======
Consolidated profit and loss account
for the year ended 31 December 1999
Note 1999 1999 1998 1998
Alternative
basis
£000 £000 £000 £000
Group turnover and share of
turnover of joint venture 11,147 5,505 3,480
Less: share of turnover of
joint venture (90) - -
------ ------ ------
Group turnover 11,057 5,505 3,480
Cost of sales (7,906) (2,965) (2,225)
------ ------ ------
Gross profit 3,151 2,540 1,255
Administrative expenses (1,009) (851) (399)
------ ------ ------
Group operating profit 2,142 1,689 856
Share of operating
profit/(loss) in
joint venture 66 (24) (23)
Profit on disposal of
investment properties - 354 -
------ ------ ------
Profit on ordinary
activities before
interest and taxation 2,208 2,019 833
Interest receivable 341 113 121
Interest payable and
similar charges 6
Group (1,626)
Joint venture (81)
------
(1,707) (1,552) (727)
------ ------ ------
Profit on ordinary
activities before
taxation 842 580 227
Taxation 7 7 9 9
------ ------ ------
Profit for the financial
year 849 589 236
Dividends paid and
proposed 8 (266) (100) (100)
------ ------ ------
Retained profit for the
financial year 583 489 136
====== ====== ======
Earnings per share 9
Basic 3.69p 2.24p 2.21p
Diluted 3.62p 2.24p 2.20p
====== ====== ======
Consolidated cash flow statement
for the year ended 31 December 1999
Note 1999 1998 1998
Alternative
basis
£000 £000 £000
Cash flow from operating
activities 10 6,549 1,092 4,272
Returns on investment and
servicing of finance 11 (2,937) (1,981) (846)
Taxation (133) (183) (15)
Capital expenditure and
financial investment 11 (29,713) (4,448) (9,863)
Acquisitions and disposals 11 - (1,431) (2,887)
Equity dividends paid - (100) (100)
------ ------ ------
Cash outflow before management
of liquid resources and
financing (26,234) (7,051) (9,439)
Management of liquid
resources 2,663 (2,663) (2,663)
Financing 11 25,052 9,732 12,371
------ ------ ------
Increase in cash in the year 1,481 18 269
====== ====== ======
Reconciliation of net cash flow to movement in net debt
for the year ended 31 December 1999
1999 1998 1998
Alternative
basis
£000 £000 £000
Increase in cash in the year 1,481 18 269
Cash flow resulting from
movement in liquid resources (2,663) 2,663 2,663
Cash flow from increase in
debt and lease financing (20,760) (9,732)(12,371)
------ ------ ------
Change in net debt resulting
from cash flows (21,942) (7,051) (9,439)
Loans and finance leases
acquired with subsidiary - -(15,580)
New hire purchase contracts (216) (120) -
Amortisation of loan stock
issue costs (83) - -
------ ------ ------
Movement in net debt in
the year (22,241) (7,171)(25,019)
Net debt at beginning
of year (26,644) (19,473) (1,625)
------ ------ ------
Net debt at end of year (48,885) (26,644)(26,644)
====== ====== ======
Consolidated statement of total recognised gains and losses
for the year ended 31 December 1999
1999 1998 1998
Alternative
basis
£000 £000 £000
Profit for the financial year
Group 864 613 259
Share of joint venture (15) (24) (23)
------ ------ ------
849 589 236
Unrealised surplus on
revaluation of properties 6,645 6,551 5,350
Unrealised surplus on
revaluation of joint venture 4,545 - -
Provision for deferred
tax on revaluations - 188 188
------ ------ ------
12,039 7,328 5,774
====== ====== ======
Note of consolidated historical cost profits and losses
for the year ended 31 December 1999
1999 1998 1998
Alternative
basis
£000 £000 £000
Reported profit on ordinary
activities before taxation 842 580 227
Realisation of property
revaluation gains of
previous years - 697 -
------ ------ ------
Historical cost profit on
ordinary activities before
taxation 842 1,277 227
====== ====== ======
Historical cost profit for the
year retained after taxation
and dividends 583 1,186 136
====== ====== ======
Reconciliation of movements in shareholders' funds
for the year ended 31 December 1999
1999 1998 1998
Alternative
basis
£000 £000 £000
Profit attributable to ordinary
shareholders 849 589 236
Dividends paid and proposed (266) (100) (100)
------ ------ ------
583 489 136
Net surplus on revaluation 11,190 6,551 5,350
Provision for deferred tax on
revaluations - 188 188
Net proceeds of new share
capital subscribed 4,292 - 3,938
Capital distribution to
shareholders - (2,975) -
------ ------ ------
Net addition to shareholders'
funds 16,065 4,253 9,612
Opening equity shareholders'
funds 10,267 6,014 655
------ ------ ------
Closing equity shareholders'
funds 26,332 10,267 10,267
====== ====== ======
Notes to the accounts
1 Basis of preparation
The Group accounts include the accounts of the Company
and its subsidiary undertakings all of which are made up
to 31 December 1999.
The financial information set out in this announcement
does not constitute the Company's statutory accounts for
the years ended 31 December 1999 or 1998. Statutory
accounts for 1998 have been delivered to the registrar of
companies, and those for 1999 will be delivered following
the company's Annual General Meeting. The auditors have
reported on those accounts; their reports were
unqualified and did not contain statements under section
237(2) or (3) of the Companies Act 1985.
Prior to the formation of the present Group on 24 June
1998, its activities were not carried on by a single
statutory group of companies. Accordingly, for
comparative purposes, financial information prepared
under two bases is shown in respect of profits for the
year to 31 December 1998. The alternative basis
financial information presented for the year to 31
December 1998 has been prepared under the principles of
merger accounting and has been extracted from the
accountants' report on the Group set out in the Company's
AIM admission document dated 24 May 1999. The
comparative information provided from the financial
statements for the year ended 31 December 1998 has been
prepared under the principles of acquisition accounting.
2 Investment and development properties
Completed Developments Properties Total
developments in progress held for
future
development
£000 £000 £000 £000
Group
Cost or valuation and
net book value
At beginning
of year 23,870 10,114 2,468 36,452
Additions 7,728 19,557 2,667 29,952
Revaluations 3,768 820 1,982 6,570
------ ------ ------ ------
At 31 December
1999 35,366 30,491 7,117 72,974
====== ====== ====== ======
At 31 December
1998 23,870 10,114 2,468 36,452
====== ====== ====== ======
3 Joint venture undertaking
At 31 December 1999, the Group's investment in joint
venture represented a 50% shareholding of the ordinary
shares of Peabody Unite plc.
The amounts included in respect of the joint venture
comprise the following:
1999 1998
£000 £000
Share of assets
Fixed assets 12,447 63
Current assets 520 13
------ ------
12,967 76
Share of liabilities
Due within one year (8,411) (13)
Due after one year - (37)
------ ------
Share of net assets 4,556 26
====== ======
4 Analysis of net debt
1999 1999 1998 1998
£000 £000 £000 £000
Bank loans, other loans and
overdrafts fall due:
In one year or less,
or on demand 24,130 10,923
Between one and two
years 1,292 4,310
Between two and five
years 10,354 3,078
In five years or more 14,707 11,255
------ ------
50,483 29,566
Obligations under hire
purchase agreements
In one year or less 116 62
Between two and five
years 150 76
------ ------
266 138
Less: Liquid resources and
cash at bank and in hand (1,864) (3,060)
------ ------
Net debt at end of year 48,885 26,644
====== ======
The Group has various borrowing facilities available to
it. The undrawn committed facilities available at 31
December 1999 in respect of which all conditions
precedent had been met at that date were as follows:
1999 1998
£000 £000
Expiring in one year or less
Build facilities 11,676 6,229
Other facilities 657 770
------ ------
12,333 6,999
====== ======
5 Called up share capital
1999 1998
£000 £000
Authorised
45,000,000 ordinary shares of 25p each 11,250 -
10,000,000 ordinary shares of £1 each - 10,000
------ ------
11,250 10,000
====== ======
Allotted, called up and fully paid
25,313,965 ordinary shares of 25p each 6,329 -
5,136,000 ordinary shares of £1 each - 5,136
------ ------
6,329 5,136
====== ======
On 5 March 1999, each of the issued and unissued ordinary
shares of £1 each was divided into four ordinary shares
of 25p each.
On 20 May 1999, the Company increased its authorised
share capital by £1,250,000 to £11,250,000 divided into
45 million shares by the creation of 5 million ordinary
shares of 25p each.
On 26 May 1999, the Company allotted and issued 3,564,549
ordinary shares of 25p each by way of a placing at 85p
per share upon admission to trading on AIM. The net
proceeds of the issue were £2,800,000.
On 5 October 1999, the Company allotted and issued
1,205,416 ordinary shares of 25p each by way of a placing
at £1.25 per share, the mid market price at the date of
allotment. The net proceeds of the issue were
£1,500,000.
6 Interest payable and similar charges
1999 1998 1998
Alternative
basis
£000 £000 £000
On loans not wholly repayable
within 5 years 1,083 1,349 616
On loans wholly repayable
within 5 years 1,908 701 329
On bank overdrafts - 41 21
On convertible unsecured loan
stock 272 - -
Finance charges payable in
respect of hire purchase
agreements 15 3 1
Amortisation of issue costs
of loan stock 83 - -
------ ------ -----
3,361 2,094 967
Transfer to cost of investment
and development properties (1,735) (542) (240)
------ ------ -----
1,626 1,552 727
Share of interest payable
by joint venture 81 - -
------ ------ -----
1,707 1,552 727
====== ====== =====
7 Taxation
1999 1998 1998
Alternative
basis
£000 £000 £000
UK corporation tax at 30%
(1998: 31%) 373 263 263
Tax relief for capital allowances
on non-depreciated property (179) (119) (119)
Tax relief on capitalised interest(194) (87) (87)
------ ------ -----
- 57 57
Adjustment relating to an
earlier year (7) - -
Movement in deferred taxation - (66) (66)
------ ------ -----
(7) (9) (9)
====== ====== =====
8 Dividends
1999 1998 1998
Alternative
basis
£000 £000 £000
Equity
Interim dividend paid of
1.95p per £1 ordinary share - 100 100
Final dividend proposed of
1.05p per 25p ordinary share 266 - -
------ ------ -----
266 100 100
====== ====== =====
The proposed final dividend of 1.05 pence net per ordinary
share will be paid on 16 May 2000 to holders of ordinary
shares on the register at the close of business on 31
March 2000.
9 Earnings per share
Basic earnings per share of 3.69p (1998 alternative basis:
2.24p; 1998: 2.21p) have been calculated on earnings of
£849,000 (1998 alternative basis: £589,000; 1998:
£236,000) divided by the average number of ordinary shares
in issue during the year of 22,983,112 (1998 alternative
basis: 26,315,661; 1998: 10,694,137).
Diluted earnings per share of 3.62p (1998 alternative
basis: 2.24p; 1998: 2.20p) have been calculated on
earnings of £849,000 (1998 alternative basis: £589,000;
1998: £236,000) and after including the effect of all
dilutive potential ordinary shares, which increase the
average number of shares to 23,457,981 (1998 alternative
basis: 26,335,387; 1998: 10,745,452).
10 Reconciliation of operating profit to operating cash
flows
1999 1998 1998
Alternative
basis
£000 £000 £000
Operating profit 2,142 1,689 856
Depreciation and amortisation
charges 209 196 22
Decrease/(increase) in stocks 1,714 (2,104) (383)
(Increase)/decrease in debtors (3,198) (1,535) 1,069
Increase in creditors and
provisions 5,675 2,846 2,708
Loss on sale of fixed assets 7 - -
------ ------ -----
Net cash inflow from operating
activities 6,549 1,092 4,272
====== ====== =====
11 Analysis of cash flows
1999 1998 1998
Alternative
basis
£000 £000 £000
Returns on investment and
servicing of finance
Interest received 341 113 121
Interest paid (3,263) (2,094) (966)
Interest element of finance
lease rental payments (15) - (1)
------ ------ -----
Net cash flow from returns on
investment and servicing of
finance (2,937) (1,981) (846)
====== ====== =====
Capital expenditure and financial
investment
Purchase of tangible fixed
assets (29,704) (12,248) (9,863)
Purchase of intangible fixed
assets (9) - -
Disposal of tangible fixed
assets - 7,850 -
Purchase of investment in
joint venture - (50) -
------- ------- ------
Net cash flow from capital
expenditure and financial
investment (29,713) (4,448) (9,863)
======= ======= ======
Acquisitions and disposals
Purchase of subsidiary undertakings - (1,431) (3,045)
Net cash acquired with subsidiaries - - 158
------- ------- ------
Net cash flow from acquisitions
and disposals - (1,431) (2,887)
======= ======= ======
Financing
Issue of share capital 4,292 - -
Issue of convertible loan stock 5,406 - -
Movement on build facilities 12,919 8,053 7,511
Movement on bank loans 2,527 1,726 4,722
Capital element of hire
purchase payments (92) (47) 138
------ ------ ------
Net cash flow from financing 25,052 9,732 12,371
====== ====== ======
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