LONDON (SHARECAST) - UNITE Group, the student accommodation manager, has reinstated its dividend after a 'strong year' in 2011 in which it achieved 99 percent occupancy and an increase in net asset value (NAV).
"2011 was a strong year for UNITE. High occupancy across the portfolio, solid rental growth and effective cost management drove a step change in the profitability of our core business," said Chief Executive Mark Allan.
The adjusted diluted NAV per share rose by 8% during the year to 318p, from 295p in 2010, driven by rental growth and development activity. However, growth was held back by a £21m (13p per share) charge in relation to UNITE Modular Solutions (UMS) for trading losses and costs in relation to its closure.
As a result of this charge, pre-tax profit slumped from £24.2m to £4.7m.
"Whilst it is disappointing to incur these costs it does remove a loss making activity for the Group and will result in greater visibility of the underlying profitability and cash generation of our core business," said Chairman Phil White.
Total income from the managed portfolio rose from £188.9m to £219.5m, while the net portfolio contribution increased to £11m, from £4.1m previously.
This performance enabled the group to recommend a final dividend of 1.25p per share and this, along with the interim dividend of 0.5p per share, brings the full-year payout to 1.75p per share (2010: nil).
The company also gave a positive outlook, saying that demand for university places for the 2012/13 far outstrips supply, and reservations for the year are "solid" at 59%. The group said that the development pipeline is progressing well and it's on track to deliver a further £40m of NAV uplift by December 2014.
Adjusted net debt increased from £335m to £434m.