Student accommodation specialists Unite Group has announced a rise in first-half pretax profits to £37.5 million, from £33.5 million.
The group, which has two North East developments, also reported like for like rental growth for the six months since December 2012 of 1.2%, and recurring profit from operations was also up 12.5% to £16.2m, from £14.4m in June 2012
Founded 22 years ago, the firm has grown to house some 42,000 students in 130 properties across 23 cities, including hundreds of young residents in Newcastle’s Manor Bank and Magnet Court.
Chief executive Mark Allan said he was pleased the company continues to grow and has a strong balance sheet to strive ahead with plans for future regional developments.
Allan said: “The business has continued to perform strongly in 2013 with solid growth in earnings and healthy demand for accommodation for the 2013/14 university year.
“We expect this positive performance to be sustained for the full year and the rental growth outlook for the remainder of 2013 and into 2014 is encouraging.
“Longer term, the business is well positioned for continued growth in earnings. The demand/supply dynamics of our sector remain supportive, our competitive position and brand are strong and we have capital available to invest selectively in attractive opportunities.”
The company said student numbers in the UK, the key driver of demand for properties, appear to be recovering strongly after disruption in the last university year as a result of various Government policy changes, and that Newcastle and all other local markets are benefitting from a stronger outlook than a year ago.
Student intake in the coming educational year is expected to be at least 30,000 higher than 2012/13, an increase of 6%, and the company believes there is limited new supply of accommodation in most areas of the UK, allowing the firm to achieve high occupancy and robust rental growth.
As of Wednesday this week, reservations for 2013/14 stood at 90% compared to 87% last year.
The report accompanying the interim results added: “The foundation for our success is providing high quality, well-located, safe accommodation that is close to university campuses, transport and local amenities.
“As a result of the efforts of our teams within the business and ongoing investment in our estate and operating platform, our independently assessed customer satisfaction scores have again increased to their highest ever levels and we are seeing increasing evidence of our brand strength translating into clear competitive advantage. We will be seeking to build on this further in the months and years ahead.
“In June we raised £50 million, net of expenses, through a successful placing of new shares. The proceeds of this placing will be used to fund a highly selective regional development programme where we see very attractive opportunities.”