UNITE Group plc · LSE:UTG
UNITE — H1 2006 Earnings Presentation
19 slides from UNITE's earnings presentation, 2006
Slide 1: Interim Results 2006
Interim Results 2006 Six months ended 30 June 2006
Slide 2: Key themes
Key themes 15% adjusted NAV per share growth • Healthy development pipeline • Rental growth • Yield compression Strong portfolio performance • Portfolio operating profit up 12% • Expected like-for-like revenue growth of 6.5% for 2006/07 academic year • Operating margin stable Increasing invest
Slide 3: Headline results
Headline results H1 2006 YE 2005 H1 2005 Change Net Asset Value Basic NAV per share (IFRS) 365p 314p ↑16% Adjusted NAV per share 420p 367p ↑ 14% Adjusted NAV per share (fully diluted) 416p 363p ↑ 15% Earnings Portfolio operating profit (inc share of JVs) £28.7m £25.7m ↑ 12% Profit before tax £61.5m
Slide 4: Operating update
Operating update Hospitality Services • Beds under management up 14% • New customer facing teams in place and delivering improved experience for our customers • Solid occupancy performance and improved tenancy mix across portfolio • First shop opened in London Development • Margins being maintained
Slide 5: Market update
Market update Student demand • Overall demand - 1.4 million full time students Projected demand for student accommodation • Exceptional increase in applications for 2005/06 1,250 Students demanding accommodation partially reversing in 2006/07 1,200 • Annualised growth of 2.3% over two years 000's
Slide 6: Net asset value growth
Net asset value growth Key Indicators Jun 06 Jun 05 Dec 05 NAV Growth Components £m pps % NAVPS pps pps pps fd NAV per share (IFRS) 365 287 314 Investment portfolio Provision for deferred tax 53 42 38 − Net rental growth 15 12 3% − Yield compression 41 33 9% MTM of interest rate hedges 2 17 15 Adjus
Slide 7: The investment portfolio
The investment portfolio 30 June 2006 : Beds £m Capital growth % total Completed properties £m portfolio - wholly owned 25,438 1,079 Net rental growth 15 1.4% - JVs 2,276 155 Yield compression 41 3.8% JV partner share (1,361) (98) UNITE share 26,353 1,136 56 5.2% Average stabilised yield 6.05% (Dec
Slide 8: The development portfolio
The development portfolio Secured future developments Completed Average Beds Value £m stabilised yield 2006 – UNITE 2,468 117.2 6.24% – JV 1,808 120.6 6.22% – subtotal (net UNITE share) 4,276 (3,203) 237.8 6.23% 2007 – UNITE 3,080 158.7 6.13% – JV 967 139.3 5.80% – subtotal (net UNITE share) 4,047 (
Slide 9: Joint ventures
Joint ventures Capital Cities Joint Venture Student Village Joint Venture Beds Value £m Beds Value £m Investment portfolio 1,114 101.3 Investment Portfolio 1,162 53.7 Developments - 2006 completion 844 73.5 Developments - 2006 completion 964 47.1 - 2007 completion 746 125.3 - 2007 completion 221 14.
Slide 10: Portfolio Performance
Portfolio Performance H1 2006 performance 2006/07 Academic Year H1 06 H1 05 06/07 05/06 £m £m Gross rental income 48.9 41.8 Total beds in operation 35,005 30,729 Direct operating costs (13.2) (10.5) Occupancy (% of available 92% 94% rooms) Rentals under sale & (3.2) (1.5) 50+ week tenancies 5,156 4,
Slide 11: Adjusted Profit Performance
Adjusted Profit Performance H1 06 H1 05 £m £m Revenue - Investment 49.5 41.8 - Development 5.6 19.1 55.1 60.9 Portfolio operating profit (inc share of JVs) 28.7 25.7 Net interest charge (20.9) (21.2) 7.8 4.5 Non rental activities (inc pre-contract costs) (2.5) (0.3) Corporate costs (3.0) (2.6) Adjus
Slide 12: Student Accommodation Fund
Student Accommodation Fund Strategy behind the creation of the fund • More flexible, scaleable financing structure • Further establishes investment demand • Develops new revenue streams • Releases capital to fund further growth Outline of the fund • Acquire substantially all of UNITE’s stabilise
Slide 13: Summary and outlook
Summary and outlook Strong NAV performance • Development activity • Rental growth • Yield compression Solid rental outlook for 2006/07 academic year Investment market now clearly established UNITE business model evolving with planned creation of dedicated fund • Building on financing strateg
Slide 14: Appendices
Appendices UNITE top 10 Markets Our property portfolio Portfolio operating margin NNNAV calculation Debt 13
Slide 15: UNITE Top Markets
UNITE Top 10 Markets Expected FT Student Projected 3 Yr Growth in 2006 2005 Completed City Completed Numbers Market Share FT Student Rank Rank Beds 2005 Beds 12/06 (04/05) 12/06 Numbers 1 (3) London 3,179 2,564 204,993 2% 12% 2 (4) Sheffield 3,132 2,365 39,993 8% 7% 3 (1) Bristol 3,082 3,082 32,677
Slide 16: Our property portfolio
Our property portfolio Beds Properties Completed Average value stabilised £m yield Completed Portfolio: 2004 and prior 23,028 89 965 6.07% 2005 completions 2,410 6 114 5.97% Joint venture properties 2,276 7 155 5.62% 27,714 102 1,234 6.01% Beds under management 3,015 8 - - Development portfolio: 200
Slide 17: Portfolio operating margin
Portfolio operating margin (includes 100% of Joint Ventures) H106 H105 £m £m £m £m Rental Income: - wholly owned 48.9 41.8 - operated in joint ventures 5.7 1.0 54.6 42.8 Property operating costs - wholly owned (16.4) (12.0) - operated in joint ventures (1.1) (0.2) Overheads attributable to property
Slide 18: NNNAV
NNNAV 30 June 2006 31 Dec 2005 £m £m Net assets 448.0 382.7 Fair value of fixed rate debt (11.5) (22.1) Deferred tax 3.4 6.6 NNNAssets 440.0 367.2 NNNAV per share 359p 302p 17
Slide 19: Debt
Debt 30 June 2006 31 Dec 2005 Net debt £748m £739m Gearing 145% 162% Average life of investment debt 7.7yrs 8.2yrs Average cost of investment debt 6.53% 6.57% % hedged/fixed 90% 95% 18