Unite Group increases dividend despite profit fall

Unite Group (LSE: UTG), the UK’s leading student accommodation provider, reported mixed results for 2023. While annual revenue rose 6.5% to £276.1 million compared to £259.3 million in the previous year, pre-tax profit significantly dropped by 72% to £102.5 million, down from £361.9 million.

The revenue increase stemmed from a 7.2% rise in rental income, reaching £259.2 million from £241.7 million. However, revaluation losses, including property valuations and interest rate swaps, contributed to the decline in profit.

Despite the profit drop, Unite Group remains confident in its future growth. CEO Joe Lister highlighted positive aspects, stating “This is a strong set of results, driven by full occupancy, rental growth, and substantial investment into our platform and portfolio.”

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Lister further highlighted future growth opportunities, pointing to “a substantial growth opportunity for the business” stemming from:

  • A robust development pipeline
  • Ongoing asset management projects
  • New university partnerships

He also underscored the company’s commitment to “tackling the acute and intensifying supply-demand imbalance” in student accommodation across the UK.

Despite the drop in profit, Unite Group demonstrated confidence in its future by raising its final dividend by 8.8%, bringing it to 23.6 pence per share. Unite Group’s share price remained unchanged on Tuesday morning.