Unite Group Q2 2026 TU Earnings Report

Unite Group EPS Results

• Actual EPS: GBX 27.10
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Unite Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Unite Group Announcement Details

• Quarter: Q2 2026 TU
• Date: 7/28/2026
• Time: After Market Closes
• Conference Call Date: N/A
• Conference Call Time: N/A

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. We provide homes to 70,000 students across 157 properties in 23 leading university towns and cities. We currently partner with over 60 universities across the UK. Our people are driven by a common purpose: to provide a 'Home for Success' for the students who live with us. Unite's accommodation is safe and secure, high quality and affordable. Students live predominantly in ensuite study bedrooms, with rents covering all bills, insurance, 24-hour security and high-speed Wi-Fi. We also achieved a five-star British Safety Council rating in our last audit. We are committed to raising standards in the student accommodation sector for our customers, investors and employees. This is why our new Sustainability Strategy, launched in 2021, includes a commitment to become net zero carbon across our operations and developments by 2030. Founded in 1991 in Bristol, Unite Group (LON:UTG) is an award-winning Real Estate Investment Trust (REIT), listed on the London Stock Exchange and a member of the FTSE 100 Index. 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 £2 billion London Student Accommodation Vehicle (LSAV). For more information, visit: Unite's corporate website www.unite-group.com The student site www.unitestudents.com

Unite Group Q2 2026 TU Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Reservations improved to 86%, one percentage point ahead of last year, with occupancy guided at 94%–96% and rental growth at 1%–2%. Unite expects income growth of 0%–2% for the 2026–27 academic year, as pricing adjustments and marketing support conversion.
• Positive Sentiment: The Empiric portfolio’s reservations reached 71%, 10 percentage points ahead of last year, supported by expanded sales channels, international recruitment and repricing. Unite raised its academic-year outlook and expects GBP 17 million of synergies, GBP 3 million above the original target.
• Positive Sentiment: Unite has completed GBP 130 million of disposals and has a further GBP 500 million of assets on the market across more than a dozen processes, supporting its GBP 300 million–GBP 400 million annual target. About half of future disposal proceeds may be available for reinvestment, including potential share buybacks.
• Negative Sentiment: Property valuations are expected to decline by 6%–6.5% at the half year as yields widen and rental growth remains broadly flat, with additional pressure on development-asset carrying values and net tangible assets.
• Neutral Sentiment: Full-year EPS guidance was reaffirmed at GBP 0.415–GBP 0.430, although management expects slightly stronger occupancy to be offset by lower pricing growth and noted a one-off impact from students giving notice under the Renters’ Rights Act.

Presentation

[Joe Lister, CEO at Unite Group]

Good morning, everyone, and thank you for joining the call, where I'll be giving a short update covering the positive momentum and reservations since we last spoke, progress on disposals and capital allocation, and valuation movement in the first half. Please do pop any questions into the webcast, Mike and I will cover off at the end. Overall, we're performing well with reservations. We're seeing the strongest universities underpin this. It does continue to be a competitive leasing market, we are seeing the value of our relationships with universities and the benefits of our leading operating platform. It's fair to say that no two sales cycles are the same, we still have a few important weeks to run, we are guiding to 94%-96% occupancy and 1%-2% rental growth.

[Joe Lister, CEO at Unite Group]

Reservations are currently at 86%, which is one point ahead of the same time last year, having been one point behind in our last update. It is clear that our platform is making an impact. We've got a real focus on sales and marketing across the business, if any of you happen to be watching "Love Island," you may have seen our Live. Your. Now. campaign. It's driving inquiry levels, which our teams are chasing down hard. We're seeing good conversion rates across both our web and direct channels, it's great to see our tech investment making a difference. We've made targeted pricing adjustments, this has allowed us to secure bookings earlier and reducing our reliance on sales in August and September. We are outperforming the market and winning share from both HMO and PBSA.

[Joe Lister, CEO at Unite Group]

We expect to see slightly stronger occupancy to be offset by lower growth in pricing, we'll continue to focus on securing income through occupancy through the back end of the cycle. We're on track to deliver 0%-2% income growth for the 2026, 2027 academic year. Nominations are down by one point from the last update, this is mainly at weaker universities. We have been successful in selling these beds again, showing the power of our platform. We continue to have positive discussions with the universities about nominations beds when A-level results are announced. We are not holding back where we see the opportunity to sell these beds on a direct let basis. We are disappointed about the demand for universities, it is clear that they have remained cautious about making a financial commitment until they've got absolute certainty on their student numbers.

[Joe Lister, CEO at Unite Group]

Our occupancy guidance does not assume an increase in nominated beds, we'll get there with direct let sales. Competitive pricing and incentives remain sensible, we're gearing up for the peak weeks of the sales cycle ahead with better visibility than last year. U.K. and international undergraduate intake is still expected to be strong, up 1%-3% on last year. International postgraduates is expected to be soft again this year, driven by the policy environment, although this does feel like it is now stabilizing. These, again, are both factored into our guidance. Moving on to Empiric, we're starting to see the benefits of our platform on the Empiric portfolio. Reservations are now at 71%, meaningfully ahead of last year, this comes having taken over the business when we were significantly behind the prior year.

[Joe Lister, CEO at Unite Group]

Using our platform, we've broadened sales channels, we've introduced a dedicated international team, and we've repriced in certain markets, and that has all made a difference. We've successfully reduced reliance on postgraduates and are demonstrating demand from rebookers, both U.K. and international. We've increased our expectation for the 2026, 2027 academic year by a couple of percentage points, and we expect to deliver rental growth broadly in line with the Unite performance. As with the Unite portfolio, we will trade price for occupancy where we see the opportunity to secure rooms later on in the cycle. On the integration side, we've made good progress, having recently closed Empiric's head office and transferred all operational staff onto our platform, and we're on track to deliver synergies of GBP 17 million, GBP 3 million ahead of our original target.

[Joe Lister, CEO at Unite Group]

In summary, we are tracking ahead of last year on occupancy, but slightly behind on pricing, but overall, therefore in line on income. The sales performance across the two brands on both direct let and nomination supports our strategy to focus on the leading universities, first years and returners. We're seeing a marked performance difference between by university type and also supply constrained markets. We have a critical few weeks to go, but we feel in a good place. Our trading performance in H1 is in line with expectations, and we're reconfirming our GBP 0.415-GBP 0.430 EPS guidance for the year. This does reflect the one-off impact of students giving notice under the Renters' Rights Act, which we outlined in the statement. Turning to property activity, our new development, Hawthorne House in Stratford, has now reached completion.

[Joe Lister, CEO at Unite Group]

We've done everything we can to get the accommodation and school ready for September, and we're working closely with the Building Safety Regulator in one of the first Gateway three processes for the sector. The building is fully let for September, and we are looking forward to welcoming students at the start of term. On disposals, it is clear that our focus on leading university is central to our strategy. Given the changes that we're seeing in the sector, the portfolio repositioning remains a key focus for us to return to more predictable and earnings growth. We're making good progress towards our disposals target. We've seen a high level of interest across the spectrum of assets. Capital is still attracted to the sector, with strong operational cash flows and assets priced significantly below replacement cost. We've delivered GBP 130 million so far this year.

[Joe Lister, CEO at Unite Group]

We have a further GBP 500 million on the market with over a dozen live processes, including a portfolio of lower growth assets, development land, non-PBSA assets, and Empiric assets. A number of these are at more advanced stage, although generally smaller lot sizes, and we expect to make progress through H2. We're not dependent on any single transaction to meet our GBP 300 million-GBP 400 million target for the year, which reflects the breadth of activity underway. We'll continue to assess offers based on our conviction in the future returns implied by an offer price rather than by reference to historic valuations. Following our announcement in April, we're continuing to make good progress in determining how to further accelerate disposals and faster reposition the portfolio, and we'll share more details with you at the interim results.

[Joe Lister, CEO at Unite Group]

On valuations, whilst transaction volumes are lower in H1, valuers have reflected increased capital costs and the more uncertain operating backdrop in the valuations. As with other sectors, yields have moved out and rental growth has been broadly flat over the first half. Encouragingly, valuers are starting to recognize the income visibility that nomination agreements provide and how this becomes more valuable to us owners. This reverses the trend seen a couple of years ago where the nominations premium was eroded in a particularly strong direct let market. Values have moved most in London, where starting yields are the lowest, and in the more provincial markets where operating dynamics are less certain.

[Joe Lister, CEO at Unite Group]

Flowing this through, we expect valuations at Unite share to be down between 6% and 6.5% at the half year, and there will also be an impact on the carrying value of development assets which will be reflected in NTA. We've reduced leverage in recent years, and we're well-placed to manage changing asset values with our strong balance sheet and flexible sources of funding.

[Joe Lister, CEO at Unite Group]

Finally, on buybacks, we've completed GBP 165 million of buybacks so far in H1. This was done at an average of GBP 5.05 and will partially offset some of the NTA dilution from the valuation decline. Today, share buybacks remain the most attractive use of surplus capital for the business, and we see it as the most effective way to invest in high-quality accommodation well below book value. We will make decisions about extensions to the buybacks as we make further progress with disposals.

[Joe Lister, CEO at Unite Group]

Wrapping up, we've had a productive quarter. Reservations are progressing well. Empiric is starting to perform. Earnings and income guidance have been confirmed at high levels of disposal activity, and we are on track to deliver on target. Valuations are adjusting and our balance sheet is positioned to absorb this. With that, we'll now turn to questions, so please do submit them if you haven't already, and we will work through them over the next 10 or so minutes.

[Mike Burt, CFO at Unite Group]

Hey, guys. We'll wait for some questions to roll in. It's Mike here, with Joe. We've got a first question, though, on the call from Tom Lousson at Berenberg. You mentioned 71% Hello Student reservations, which is 10 percentage points ahead of this point last year. What's stopping you from expecting occupancy to recover all the way to at least last year's level of 89%, given that your new guidance is still at least 87%, which is back year-on-year?

[Joe Lister, CEO at Unite Group]

Yeah, look, we're really pleased with the progress that we've made over the last quarter, both on sales and integration. I do want to call out the great work the teams have performed, and particularly the Empiric and Hello Student teams in the way in which they've sort of bought into the Unite family and the Unite Group, and really clear to see the two businesses working well together. Yes, we've made some real wins. I think that's from the fact we've introduced an international sales team. That really is helping to drive conversion rates. A number of those teams are Mandarin speakers. We've unblocked what were some clunky sales processes within the Hello Student way of selling. We've also been cross-selling from the Unite portfolio and targeting domestic students.

[Joe Lister, CEO at Unite Group]

We are feeling more confident, but as I say, this is our first time through this sales cycle. It is a different demographic. We don't have that same level of confidence over our ability to sell volumes of bed through clearing, just given that slightly different customer dynamic. We are remaining at a fairly cautious approach at this stage, but we will work really hard to see, and hopefully we'll be able to outperform that number that we've guided to today.

[Mike Burt, CFO at Unite Group]

Great. Next question is from Ana Escalante at Morgan Stanley. Any update on buybacks and use of proceeds from disposals to be completed in the second half? Maybe I can just expand on what Joe said earlier, and maybe it's helpful just to sort of reiterate what we've done on buybacks to date. We have completed GBP 165 million of buybacks in the first half, as Joe said. That was really in two tranches. The first GBP 100 million was a case of us really funding that from development that was no longer progressing, where we'd redirected that capital into share buybacks. The second tranche, the GBP 65 million we committed to, was then funded out of the proceeds of the disposals we've made in the year to date.

[Mike Burt, CFO at Unite Group]

I think as you look forward on share buybacks, our ability to commit more capital to them or any other use of capital will be a function of the disposal progress we make. As we've said today, we're confident we'll achieve the GBP 300 million-GBP 400 million of disposals in the year. That would free up additional surplus capital in the second half. At the point that we have confidence over that, we would think about how we redeploy the proceeds.

[Mike Burt, CFO at Unite Group]

A portion will go to funding CapEx that's still to go in the development pipeline, but around half of those proceeds will be available for reinvestment. We've then got one further question here from Ana at Morgan Stanley. Any further color on the progression of nomination agreements and whether this year is a one-off and you're confident of your previous target of 60% of reservations coming from nominations over the medium term?

[Joe Lister, CEO at Unite Group]

Yeah. Nominations have always been a really important part of our sales channel and the way in which we look to fill the portfolio. If we go back over to the time when we bought Liberty, we saw nominations drop to low 50s and we built them back up towards the high 50s. I think, though, it is fair to say that we weren't expecting to see the drop this time around.

[Joe Lister, CEO at Unite Group]

The normal levels of renewal of those one-year agreements just hasn't happened at the same level as we've talked about over the last couple of calls. It is clear that universities are being more cautious, and I think they're being more cautious for two reasons. One is they are less certain on the overall demand for beds, which they will have from their student intake, and that's both U.K. and international.

[Joe Lister, CEO at Unite Group]

They are more cautious because of the financial position that they find themselves in. This has been most notable in the lower-ranked universities who we work with. Where we continue to have really good conversations with universities, it's clear that we're not losing meaningful share to our competition. We've got a pretty good list of further opportunities that could come through towards, through the back end of the cycle once A-level results have been announced. We are having ongoing discussions about renewal of longer term agreements, which are maturing over the next 12 to 24 months. We still see our ability to grow back to that 60% as a meaningful target. Much of that will come through the delivery of our two university joint ventures and our development pipeline.

[Joe Lister, CEO at Unite Group]

We have a strategic target, and we believe that it will be deliverable alongside the portfolio repositioning. I think the other thing I would call out is the real success we've had in pivoting those beds onto the direct let basis. It does show our ability that these beds are well placed in the cities, the pricing's at sensible levels, and we can turn them on to our direct let platform really effectively sell them. I think that it is a focus for us. We're comfortable that we'll get back to that 60%, and we'll work hard to ensure that we're engaging with the universities and do so on the repositioned portfolio.

[Mike Burt, CFO at Unite Group]

We've then got a next question from Véronique Meertens at Van Lanschot Kempen. Are there any pricing initiatives in the form of cashback or vouchers, something that would not be showing in rent growth, but in costs? I'm happy to take that one. Yeah, Veronique, we will use incentives and the use of cashback offers and things like that in our marketing. It's not really any different from what we've done in previous years. They tend to be very targeted, and we do flex them according to which markets maybe need more incentivization than others. However, I think it's worth saying that the adjustments we've made around price, I think, are more significant than the adjustments we've made around incentives.

[Mike Burt, CFO at Unite Group]

We've talked about the rate growth for the year being more like 1%-2% now. We are seeing that drive an improvement in the rates of sale, which has been really pleasing. To give you a bit more color on that is a slight shortening in tenancy length, which is seeing that rate growth of more like the 1%-2% versus the slightly above 2% that we previously anticipated. We think that use of price is really the thing that's made the difference. Yes, we will use incentives, but their use will be pretty targeted. I think that's it.

[Joe Lister, CEO at Unite Group]

Very good. Thank you all for joining the call. Hopefully, you'll see that we continue to make decent progress with the reservations. We're very active in our repositioning of the portfolio. We are fully geared up to work through the remainder of the sales cycle. We'll look forward to speak to you in a few weeks time when we announce our interim results. Thank you very much

Participants

Executives

• Joe Lister, CEO
• Mike Burt, CFO