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1. Company Snapshot

1.a. Company Description

Unite Students is the UK's largest owner, manager and developer of purpose-built student accommodation serving the country's world-leading Higher Education sector.Following our successful £1.4bn acquisition of Liberty Living's UK assets in November 2019, we now provide homes to 76,000 students across 177 properties in 27 leading university towns and cities.Our people are driven by a common purpose: to provide a 'Home for Success' for the students who live with us and to be the most trusted brand in the sector.


We do this through quality service, quality people and quality properties, all designed on the basis of an excellent insight into students' needs and preferences.Unite's accommodation is high quality, affordable, safe and secure, and located where students want to live.Students live predominantly in en-suite study bedrooms with rents covering all bills, insurance, 24-hour security and high-speed Wi-Fi. MyUnite, our mobile app, provides practical support such as instant messaging and maintenance requests.


We hold a five-star British Safety Council audit rating (out of five) following an Occupational Health and Safety audit.The audit measured our performance against a number of key safety management indicators, providing an international benchmark for safety management systems and indicating best practice for continual improvement.Our commitment to customer service is powered by an innovative, in-house operating platform.


It provides a wide range of benefits to our students, such as an optimised online booking process, as well as providing us with a unique ability to drive value from our portfolio through scale efficiencies and revenue management.Our other strategic priority is delivering growing and sustainable earnings, underpinned by a strong capital structure.A key part of this strategy is growing the number of beds let through partnerships with the strongest UK universities which are experiencing record levels of student demand.


We currently partner with 60 universities across the UK, guaranteeing that 52% of our rooms are let under 'nomination agreements' providing high visibility of forward occupancy and rental growth.Unite Students has spent years helping young people thrive in new situations and help them manage the big ‘Leap' to university life.Our insight has identified a significant gap between student expectations and reality.


To support this leap, we have developed the Leapskills programme, helping to prepare prospective students for independent living.The programme introduces students to a number of student life scenarios to provoke group discussion on conflict resolution, problem solving and gives a general insight into shared living to help closer match expectations to reality.Unite is the founder of and major donor to the Unite Foundation, a charitable trust established to support talented students facing challenging financial circumstances through the provision of free accommodation scholarships.


The Foundation has so far provided scholarships for 434 young people working in close collaboration with 27 partner universities.Unite is invested in and operates two specialist funds and joint ventures with institutional investment partners: the £3 billion Unite UK Student Accommodation Fund (USAF), and the £1 billion London Student Accommodation Vehicle (LSAV).Founded in 1991 in Bristol, Unite Group is an award-winning Real Estate Investment Trust (REIT), listed on the London Stock Exchange and a member of the FTSE 250 Index.

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1.b. Last Insights on UTG

Unite Group faces near-term headwinds, driven by evolving factors such as international student demand and property market dynamics. The company's consensus analyst price target has decreased from £9.68 to £9.40, indicating a subtle shift in sentiment. Recent Form 8.3 filings suggest ongoing investor activity, but no significant catalysts. With the sector awaiting clarity on key trends, investors are advised to monitor developments shaping Unite Group's narrative. Decreased analyst targets reflect increased caution amid emerging industry uncertainties.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Form 8.3

Dec -04

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Form 8.3

Dec -03

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Form 8.3

Dec -02

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Form 8.3

Dec -01

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Form 8.3

Nov -28

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UK mid-caps outperform in calm post-Budget trade

Nov -27

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Form 8.3

Nov -27

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Form 8.3

Nov -26

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.00%)

6. Segments

Operations

Expected Growth: 8%

Unite Group Plc's 8% operational growth is driven by increasing demand for student accommodation, strategic expansion into new markets, and effective cost management. Additionally, investments in technology and operational efficiencies have improved yields and margins. Strong partnerships with universities and a focus on customer experience have also contributed to the growth.

Reconciling Items

Expected Growth: 10%

Unite Group Plc's 10% growth driven by increasing demand for student accommodation, expansion into new markets, and strategic partnerships. Rising university enrollment, limited supply, and growing appeal of PBSA (Purpose-Built Student Accommodation) also contribute to growth. Effective cost management, investment in technology, and focus on customer experience further support revenue expansion.

7. Detailed Products

Student Accommodation

Unite Group Plc provides purpose-built student accommodation, offering a range of room types and amenities to students in the UK.

Nomad Student Homes

Nomad is Unite's brand for student accommodation, offering a range of room types and amenities to students in the UK.

Liberty Living

Liberty Living is Unite's brand for student accommodation, offering a range of room types and amenities to students in the UK.

Property Investment

Unite Group Plc invests in and manages a portfolio of student accommodation properties in the UK.

Property Development

Unite Group Plc develops new student accommodation properties in the UK, working with universities and local authorities.

8. Unite Group Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Unite Group Plc operates in a niche market, providing student accommodation, which reduces the threat of substitutes. However, the company still faces competition from other student accommodation providers, which keeps the threat level at medium.

Bargaining Power Of Customers

Unite Group Plc has a large customer base, comprising of students, which reduces the bargaining power of individual customers. Additionally, the company has a strong brand presence, which further reduces the bargaining power of customers.

Bargaining Power Of Suppliers

Unite Group Plc relies on a network of suppliers for construction, maintenance, and other services. While the company has some bargaining power due to its scale, suppliers still have some negotiating power, keeping the threat level at medium.

Threat Of New Entrants

Unite Group Plc operates in a highly regulated industry, and new entrants would need to comply with various regulations, which creates a barrier to entry. Additionally, the company's established brand and scale of operations make it difficult for new entrants to compete.

Intensity Of Rivalry

Unite Group Plc operates in a competitive market, with several established players competing for market share. The company needs to continuously innovate and improve its services to maintain its market position, which increases the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.09%
Debt Cost 3.95%
Equity Weight 78.91%
Equity Cost 9.82%
WACC 8.58%
Leverage 26.73%

11. Quality Control: Unite Group Plc passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
MERLIN Properties

A-Score: 6.4/10

Value: 5.8

Growth: 4.0

Quality: 6.9

Yield: 6.9

Momentum: 6.5

Volatility: 8.7

1-Year Total Return ->

Stock-Card
LondonMetric Property

A-Score: 6.4/10

Value: 4.5

Growth: 5.7

Quality: 7.3

Yield: 8.8

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

Stock-Card
Cofinimmo

A-Score: 6.4/10

Value: 4.8

Growth: 2.3

Quality: 5.9

Yield: 10.0

Momentum: 7.0

Volatility: 8.3

1-Year Total Return ->

Stock-Card
Covivio

A-Score: 5.7/10

Value: 4.0

Growth: 4.2

Quality: 3.9

Yield: 9.4

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

Stock-Card
LandSec

A-Score: 5.7/10

Value: 4.5

Growth: 3.2

Quality: 6.2

Yield: 8.1

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

Stock-Card
Unite

A-Score: 5.6/10

Value: 4.5

Growth: 6.3

Quality: 6.2

Yield: 6.9

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.3$

Current Price

5.3$

Potential

-0.00%

Expected Cash-Flows