REG - Unite Group PLC - Empiric Trading Update

UniteAnnouncement

Yesterday 07:02

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251103:nRSC7842Fa&default-theme=true

RNS Number : 7842F  Unite Group PLC (The)  03 November 2025

PRESS RELEASE

3 November 2025

THE UNITE GROUP PLC

("Unite Students", "Unite", the "Group", or the "Company")

EMPIRIC TRADING UPDATE

 

The Company notes the trading update released today by Empiric Student
Property plc ("Empiric") regarding the booking cycle for the 2025/26 academic
year. To date, Empiric has achieved occupancy of 89% (October 2024: 95%) and
like-for-like rental growth of 4.5%.  Their statement notes an increase in
demand from UK domestic students, which has partially offset a reduction in
the number of bookings from Chinese students.

 

Our appraisal of the acquisition of Empiric had assumed lower occupancy and
rental growth than the prior academic year, which was reflected in our offer
terms. Empiric's occupancy for the 2025/26 academic year is slightly below
these expectations, allowing for further typical letting activity for the
Spring intake of postgraduate courses, whilst rental growth is in line with
our expectations.

 

Our strategic rationale for the acquisition is underpinned by Empiric's proven
platform for expansion among returning students. We are actively preparing for
integration following completion of the acquisition and continue to see a
meaningful opportunity to improve occupancy across the Empiric portfolio over
the next three years through our operational platform, strong university
relationships and enhanced customer retention.

 

We reaffirm our confidence in delivering earnings and dividend accretion from
the acquisition, supported by anticipated annual run-rate synergies of at
least £13.7 million. Our confidence in achieving our target cost savings is
underpinned by our prior experience through the acquisition of Liberty Living
in 2019, when we successfully delivered £18 million of annual synergies.

 

Following the approval of the transaction by Empiric shareholders at the Court
and General Meetings held on 6 October, the Competition and Markets Authority
has commenced its Phase 1 investigation, as anticipated. Unite expects the
Scheme to become effective by the second quarter of 2026, subject to the
satisfaction of the remaining terms and conditions set out in the Scheme
Document.

 

Investor and analyst event

Unite will host an event for institutional investors and analysts on the
afternoon of 27 November at Deutsche Numis' office, including updates on the
Higher Education sector, a review of the 2025/26 sales cycle, the outlook for
2026/27 and future investment plans. Please contact Sodali & Co for
further details.

 

ENDS

 

For further information, please contact:

 

Unite
                        +44 (0) 117 302 7005

Joe Lister (Chief Executive Officer)

Michael Burt (Chief Financial Officer)

Saxon Ridley (Head of IR and Investment Finance)

 

Sodali & Co
 
+44 (0) 20 7250 1446

(Communications Adviser to Unite)
 

Justin Griffiths

Victoria Heslop

Louisa Henry

 

About Unite Students

Unite Students is the UK's largest owner, manager and developer of
purpose-built student accommodation (PBSA) serving the country's world-leading
higher education sector. We provide homes to 68,000 students across 152
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 Students' accommodation is safe and
secure, high quality and affordable. Students live predominantly in en-suite
study bedrooms with rents covering all bills, insurance, 24-hour security and
high-speed Wi-Fi.

We are committed to raising standards in the student accommodation sector for
our customers, investors and employees. Our Sustainability Strategy includes a
commitment to become net zero carbon across our operations and developments by
2030.

Founded in 1991 in Bristol, the Unite Group is an award-winning Real Estate
Investment Trust (REIT), listed on the London Stock Exchange. For more
information, visit Unite Group's corporate website www.unitegroup.com
(http://www.unitegroup.com/) or the Unite Students'
site www.unitestudents.com (https://www.unitestudents.com/) .

 

Quantified Financial Benefits Statement

The Unite Directors, having reviewed and analysed the potential cost synergies
of the acquisition, and taking into account the factors they can influence,
believe that the Enlarged Group can deliver approximately £13.7 million of
pre-tax recurring cost synergies on an annual run-rate basis.

Approximately 55 per cent. of the annual run-rate benefit is expected to be
realised in the first full year following completion of the acquisition.
Approximately 100 per cent. of the run-rate benefit is expected to be realised
from the start of the second full year following completion of the
acquisition.

The quantified cost synergies, which are expected to originate from the cost
bases of both Unite and Empiric, are expected to be realised primarily from:

·    Operating cost synergies: The increased size of the Enlarged Group's
portfolio will provide benefits at a city and cluster level, enabling Unite to
leverage its existing teams and achieve efficiencies in procuring and
delivering outsourced services. Operating net cost synergies are expected to
account for approximately £2.2 million of the identified annual synergies;
and

·    Central overhead cost synergies: The Enlarged Group will benefit from
a single corporate overhead structure. Cost synergies will be realised through
the streamlining and removal of duplicated group functions and public company
costs. Central overhead cost synergies are expected to account for
approximately £11.5 million of the identified annual synergies.

The Unite Directors estimate that the realisation of the quantified cost
synergies will result in one-off costs to achieve of approximately £13.9
million, with around 85 per cent. incurred in the first full year following
completion of the acquisition and the remainder by the end of the second full
year following completion of the acquisition.

Potential areas of dis-synergy expected to arise in connection with the
acquisition have been considered and were determined by the Unite Directors to
be immaterial for the analysis.

The identified cost synergies will accrue as a direct result of the
acquisition and would not be achieved on a standalone basis. The identified
cost synergies reflect both the beneficial elements and relevant costs.

For the purposes of Rule 28 of the Takeover Code, the Quantified Financial
Benefits Statement contained in this document is the responsibility of Unite
and the Unite Directors.

Bases of belief

The Unite management team has worked to identify, challenge and quantify
potential synergies as well as the potential costs to achieving, and the
timing of, such synergies. Where appropriate, assumptions were used to
estimate the costs of implementing the new structures, systems and processes
required to realise the synergies. Such assumptions and the assessment and
quantification of potential synergies, costs of achieving and timing have been
informed by the Unite management teams' industry expertise, knowledge and
experience of integrating Liberty Living in 2019.

In preparing the Quantified Financial Benefits Statement, Empiric has shared
certain operational and financial information to facilitate the analysis in
support of evaluating the potential synergies expected to arise from the
Acquisition. In circumstances where the scope of data exchanged or the
individuals having access to it has been limited for commercial reasons,
confidentiality considerations, legal or regulatory restrictions, or other
reasons, Unite has made estimates and assumptions to aid its development of
individual synergy initiatives.

In general, the synergy assessments have been risk adjusted.

The Acquisition is subject to CMA clearance. It is not possible to predict
with certainty the outcome of the CMA clearance process and therefore any
potential impact has not been quantified.

The cost bases used as the basis for the Quantified Financial Benefits
Statement is the forecast cost bases of each of Unite and Empiric for the
financial year ended 31 December 2025.

These statements of estimated synergies relate to future actions and
circumstances which, by their nature, involve risks, uncertainties and
contingencies. As a result, the estimated synergies referred to may not be
achieved, or may be achieved later or sooner than estimated, or those achieved
could be materially different from those estimated.

The Unite Directors have, in addition, made the following assumptions:

Assumptions within Unite's control or influence:

·    Unite will remain a company with its ordinary shares listed on the
Closed-Ended Investment Funds category of the Official List maintained by the
Financial Conduct Authority, and traded on the Main Market of the London Stock
Exchange, and will retain its status as a UK REIT.

·    There will be no material impact on the underlying operations of
either Unite or Empiric or their ability to continue to conduct their
businesses, including as a result of, or in connection with, the integration
of Empiric by Unite.

·    There will be no material divestments from either the Unite or
Empiric existing businesses.

·   The cost synergies are substantively within Unite's control, albeit
certain elements are dependent in part on negotiations with third parties.

Assumptions outside of Unite's control or influence:

·   There will be no changes to macroeconomic, political, regulatory or
legal conditions in the markets or regions in which Unite and Empiric operate
that will materially impact on the implementation or costs to achieve the
proposed cost savings.

·    There will be no change in tax legislation or tax rates or other
legislation in the UK that could materially impact the ability to achieve any
benefits.

Reports

As required by Rule 28.1(a) of the Code, Grant Thornton, as reporting
accountant to Unite, and Lazard, as lead financial adviser to Unite, provided
the reports required under that rule at the time of the 2.7 Announcement.

The Unite Directors have confirmed that:

·    there have been no material changes to the Quantified Financial
Benefits Statement since 14 August 2025, and the Quantified Financial Benefits
Statement remains valid; and

·    each of Grant Thornton and Lazard have confirmed that the reports
that they produced, which were included in Parts B and C of Appendix 4 to the
2.7 Announcement, continue to apply.

Notes

These statements are not intended as a profit forecast and should not be
interpreted as such. Neither the Quantified Financial Benefits Statement nor
any other statement in this document should be construed as a profit forecast
or interpreted to mean that Unite's earnings in the first full year following
completion of the acquisition, or in any subsequent period, will necessarily
match or be greater than or be less than those of Unite and Empiric for the
relevant preceding financial period or any other period.

Due to the scale of the Enlarged Group, there may be additional changes to
Unite's operations or Empiric's operations following the proposed acquisition.
As a result, and given the fact that the changes relate to the future, the
achieved synergies may be materially greater or less than those estimated.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTWPGGWUUPAGRG



            Copyright 2019 Regulatory News Service, all rights reserved