Results: londonstockexchange.com - Interim results for six months ended june

Please be aware some numbers here are my own estimates. I've marked them with **

BAD: no new asset sales announced yet. :-(

"Transaction timelines remain protracted, reflecting the need for buyers and lenders to conduct comprehensive building surveys, particularly around fire safety." (There's a section in the results about fire safety.)

BAD: LTV at 36%, due to revaluation of properties in current interest rate climate + buyback + Empiric purchase.

BAD: NAV down to 865p from 955p EOY 2025. That is a 9% drop. Almost all of the effect comes from revaluation of investment, development and rental portfolios at higher interest rates (yield expansion). It's offset by about 28p positive adjustment from the buyback. (In a counterfactual world where Trump didn't attack Iran and rates didn't jump up, this would have likely been a positive change to NAV instead.)

GOOD: adj EPS down (27.1p) but ahead of consensus analyst forecasts (25.7p) and pointing at or beyond the high end of management forecasts.

** In 2023, 2024, and 2025, the full year adj EPS came in at 161-162% of the H1 EPS. (44.3/27.5, 46.6/28.7, 47.5/29.5)

** We could estimate from that, that FY EPS should be: 43.63, which would be slightly ahead of the high end of management forecasts and analyst consensus.

** NOTE: While the buyback shows up fully in the NAV/share, it doesn't show up fully in the EPS. If you choose to adjust EPS to the fully reduced share count, it would look something like this:

£142m earnings / 0.271 eps -> 524m shares weighted average
Current share count: 514m shares
Earnings/share at 514m shares, my estimate: 27.6p

** Which would imply -> 44.4p full year, if you were to account by the current share count and assume no further buybacks.

** Link to analyst forecasts: uk.investing.com - Unite group earnings

OK: Operationally going OK. Keep in mind, this year's earnings are based on last year's sales results i.e. this year's earnings were sadly locked in before Empiric was purchased by Unite.

" Sales progress supports 0-2% like-for-like income growth for 2026/27"
" Expect 94-96% occupancy and 1-2% rental growth for 2026/27 (2025/26: 95.2% and 4.0%)"
" Hello Student portfolio 77% reserved for 2026/27 (2025/26: LfL 68%)"
" Hello Student cost synergies increased to £18 million p.a. from FY2027"
" Continued sales momentum with Unite Students portfolio 89% reserved for 2026/27 (2025/26: LfL 87%)"

GOOD: They seem to have decided to go all in on the university partnerships where they get guaranteed rents and the university takes on the empty-room risk, in cities where growth in admissions is very strong.

GOOD: Assets up for sale expanded to 15-20% of assets by value. No sign that they are putting the crown jewels in the mix. Seems to be fully kitchen-sinking low/medium tariff university accom and pivoting harder to quality earnings.

"· Accelerating disposal programme with 15,000-20,000 beds identified for sale"

** If sold, after clearing debt, I think that would be enough for 2 years of high volume buybacks and/or new projects at core universities?

GOOD: Reported elsewhere outside of results:

"On July 13, 2026, Far East Orchard announced in a Singapore Exchange filing that its investment holding subsidiary had signed a non-binding Heads of Terms (HOT) with LDC (Portfolio) Limited—a subsidiary of Unite Group—to acquire a major development site in Southwark, London."

links.sgx.com - Corporate announcements

SUMMARY: Overall OK. Market response is (-2% drop), probably from a) the IFRS horror story where asset revaluations are reported in current year earnings (same thing happens to Berkshire Hathaway with its investment portfolio) and b) there are no asset sales confirmed yet.

I think Unite are operating ahead of expectations and making the correct asset pivot at a good moment. (low asset prices -> easier to sell assets, low share price -> maximum value from asset sales with buybacks).

TRS

Please comment to correct any errors or omissions that you notice. Thanks!