The UK’s biggest university accommodation provider has said it remains confident of continued growth despite the pressure of the cost of living crisis on students and their families.
Unite Students, which is headquartered in Bristol but runs properties around the country, said reservations for the 2022-2023 academic year were now ahead of pre-pandemic levels.
In a trading update for the first half of the current financial year, the firm reported the removal of the last remaining Covid restrictions on higher education had yielded a “strong” financial performance, with earnings of £96m - up 32% from £72.6m a year earlier.
Pre-tax profit leapt to £334.1m in the six months to June 30, compared to £130.4m for the same period a year earlier, approaching the year-end total for 2021 (£343.1m).
Bosses recommended an interim dividend of 11p per share (H1 2021: 6.5p), targeting 80% payout of adjusted earnings per share for the full year.
The board said in its outlook, university applications for 2022-2023 were up 7% on pre-pandemic levels. Reservations for space at Unite’s entire portfolio, which as of March 31, 2022, comprised almost 30,000 beds in around 70 properties across 19 university towns and cities, was at 92% - up from 83% last year and the pre-Covid level of 91%.
Unite said it was confident of achieving 97% occupancy and rental growth of between 3.5% and 4.0% for 2022-2023, and 4-5% rental growth for the following academic year.
Chief executive Richard Smith said the firm’s business model would offer protection from inflation.
He added it was “not immune” from the impact of rising costs and interest rates, with the group previously saying in April inflated build costs had hit its development pipeline.
Mr Smith said: “Despite increased economic uncertainty, we remain confident in our ability to deliver significant growth over the medium to long term. Demand for higher education has proven to be resilient through economic cycles and we have significant opportunities for growth through our alignment to the strongest universities and by leveraging our best-in-class platform.”
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