REG - Unite Group PLC - Interim Results <Origin Href="QuoteRef">UTG.L</Origin> - Part 4

UniteAnnouncement

26/07/2017 07:07

- Part 4: For the preceding part double click  ID:nRSZ0829Mc 

                                                                                          
 Non-current                                                                                                                                          
 In more than one year but not more than two years    22.8                               1.5                                108.1                     
 In more than two years but not more than five years  305.5                              302.6                              126.3                     
 In more than five years                              130.8                              239.8                              239.1                     
                                                      459.1                              543.9                              473.5                     
 Total borrowings                                     460.4                              545.3                              474.8                     
 
 
During the first half of the year Unite redeemed the full principal value of
£89.9 million of the convertible bond in exchange for 18,593,589 shares. 
 
The carrying value of borrowings is considered to be approximate to fair
value, except for the Group's fixed rate loans as analysed below: 
 
                                    Unaudited 6 months to  Unaudited 6 months to  Year to 31 December 2016  
                                    30 June 2017           30 June 2016                                     
                                    Carrying value£m       Fair value£m           Carrying value£m          Fair value£m  Carrying value£m  Fair value£m  
                                                                                                                                                          
 Level 1 IFRS fair value hierarchy  90.0                   98.4                   174.3                     212.2         176.2             215.0         
                                                                                                                                                          
 Level 2 IFRS fair value hierarchy  239.7                  217.9                  240.9                     209.1         240.3             212.5         
                                                                                                                                                          
 Other loans                        130.7                  130.7                  130.1                     124.5         58.3              54.7          
                                                                                                                                                          
 Total borrowings                   460.4                  447.0                  545.3                     545.8         474.8             482.2         
 
 
The fair value of loans classified as Level 1 in the IFRS fair value hierarchy
is determined using quoted prices in active markets for identical
liabilities. 
 
The fair value of loans classified as Level 2 in the IFRS fair value hierarchy
has been calculated by a third party expert discounting estimated future cash
flows on the basis of market expectation of future interest rates. 
 
4.2 Interest rate swaps 
 
The Group uses interest rate swaps to manage the Group's exposure to interest
rate fluctuations. In accordance with the Group's treasury policy, the Group
does not hold or issue interest rate swaps for trading purposes and only holds
swaps which are considered to be commercially effective. 
 
The following table shows the fair value of interest rate swaps: 
 
                                    Unaudited      Unaudited      Year to       
                                    6 months to    6 months to    31 December   
                                    30 June 2017   30 June 2016   2016          
                                    £m             £m             £m            
 Current                            -              -              -             
 Non-current                        10.2           16.8           11.6          
 Fair value of interest rate swaps  10.2           16.8           11.6          
 
 
The fair values of interest rate swaps have been calculated by a third party
expert, discounting estimated future cash flows on the basis of market
expectations of future interest rates, representing Level 2 in the IFRS 13
fair value hierarchy. The IFRS 13 level categorisation relates to the extent
the fair value can be determined by reference to comparable market values. The
classifications range from level 1 where instruments are quoted on an active
market through to level 3 where the assumptions used to arrive at fair value
do not have comparable market data. 
 
4.3 Dividends 
 
During the 6 months to 30 June 2017, the Company declared and paid a final
dividend of £23.2 million (30 June 2016: £21.0 million). After the period end,
the Directors proposed an interim dividend of 7.3p per share (30 June 2016:
6.0p per share). No provision has been made in relation to this dividend. 
 
Independent review report to The UNITE Group plc 
 
Introduction 
 
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2017 which comprises the consolidated income statement, the consolidated
statement of comprehensive income, the consolidated balance sheet, the
consolidated statement of changes in shareholders' equity, the consolidated
statement of cash flows and the related notes 1 to 4.3. We have read the other
information contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial statements. 
 
This report is made solely to the company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Provided by the Independent Auditor of the Entity"
issued by the Auditing Practices Board.  Our work has been undertaken so that
we might state to the company those matters we are required to state to it in
an independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company, for our review work, for this report, or for the conclusions
we have formed. 
 
Directors' responsibilities 
 
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority. 
 
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting," as adopted by the European Union. 
 
Our responsibility 
 
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. 
 
Scope of review 
 
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion. 
 
Conclusion 
 
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2017 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority. 
 
Deloitte LLP 
 
Statutory Auditor 
 
London, UK 
 
26 July 2017 
 
Company information 
 
Registered office 
 
South Quay House 
 
Temple Back 
 
Bristol BS1 6FL 
 
Auditor 
 
Deloitte LLP 
 
London 
 
Registrars 
 
Computershare Investor Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH 
 
Financial advisers and brokers 
 
J.P. Morgan Cazenove Limited
25 Bank Street
London E14 5JP 
 
Numis Securities Limited
10 Paternoster Square
London EC4M 7LT 
 
Financial PR 
 
Bell Pottinger
Holborn Gate
26 Southampton Buildings 
 
London WC2A 1PB 
 
Registered number 
 
3199160 
 
ADDENDUM 
 
The buildings within our estate are all designed and built with students in
mind. The details of the fire and management systems in place in our buildings
are set out below: 
 
 ·  All of Unite's properties have been designed to meet stringent fire safety requirements and have life safety systems installed that match the individual requirements of each building. This may include but will not be limited to alarm systems, sprinklers, dry/wet risers and automatic smoke ventilation                                                                                                                                                        
 ·  We have fully addressable L (Life) type fire alarm systems in all of our properties that means that all areas of the premises are covered with smoke or heat detection, including bedrooms, kitchens, plant rooms and communal areas. This alarm is also connected to an internal Alarm Receiving Centre (ARC) that is manned 24/7 and 365 days of the year. We routinely work closely with experts from local fire services to make sure these are effective        
 ·  All of our buildings are designed to ensure compartmentation in the event of an incident, for example, fire doors with self-closers are fitted as standard. We work closely with members of the Association for Specialist Fire Protection to ensure the fire strategy of our buildings is not compromised through a series of regular checks as part of our Fire Assessment Regime                                                                                  
 ·  All of our systems and fire safety procedures are tested rigorously and regularly                                                                                                                                                                                                                                                                                                                                                                                    
 ·  In addition to the physical fire safety measures we have in place, all our staff are trained in proactive and reactive fire safety management, which includes building inspections, routine fire alarm testing, evacuations and inductions for residents. In the event of smoke or heat being detected, our systems assume that a fire situation is present and students are prompted to evacuate. Our fire policy everywhere is for students to leave the building  
 ·  All our life systems are robustly tested in line with British Standards guidelines by competent staff and accredited third parties to ensure that they are operational at all times. We conduct routine inspections on all plant and equipment including electrical and gas systems using accredited personal and third parties                                                                                                                                      
 ·  We have control over our physical estate, including the provision of all white goods as well as the installation, management and maintenance of areas such as fire doors, door closers and smoke and heat detectors. We physically inspect our buildings through regular building patrols, the purpose of which is to check key fire management equipment                                                                                                            
 ·  We provide fire education to all of our students                                                                                                                                                                                                                                                                                                                                                                                                                     
 
 
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