UNITE Group

Website: UNITE Group
Index: FTSE 250
EPIC: UTG
Supersector: Real Estate
Sector: Real Estate Investment Trusts
Subsector: Hotel and Lodging REITs
Market Cap: £2.54B
Payout Frequency: Semi-Annual

UNITE Group Dividend Analysis and Summary

Key Dividend Details

Final dividend: 24.9p per share (FY25 total: 37.7p, up 1% YoY)
Type: Final dividend fully paid as PID
Ex-dividend date: 16/04/2026
Record date: 17/04/2026
Payment date: 29/05/2026 (subject to AGM approval on 15/05/2026)
Payout ratio (FY25): ~79% of adjusted EPS (47.5p)
2026 dividend guidance: Board intends to maintain a 37.7p total dividend
Scrip: No scrip alternative for this final dividend

Dividend Sustainability and Coverage

Coverage (FY25): 47.5p adjusted EPS vs 37.7p DPS ? ~1.26x cover (comfortable).
Forward cover (FY26 guide): 41.5–43.0p adjusted EPS vs guided 37.7p DPS ? ~1.10–1.15x cover (not much headroom).
Earnings backdrop: FY25 adjusted earnings +9%; FY26 EPS guided lower on Empiric underperformance and softer occupancy/rental growth (2–3% RGI, 93–96% occupancy at lower end).
Balance sheet: LTV 27% (target 30–35% built-out), Net debt:EBITDA 6.0x (target 6–7x), ICR ~6.0x. Debt 100% fixed/capped; cost of debt rising to 4.3% in 2026 (4.5% in 2027).
Cash demands: No scrip; final dividend all cash. Ongoing fire safety capex and remaining development capex, partly offset by disposals.

Growth Trajectory and Support

DPS trend: +1% in FY25; guided flat in FY26. Near-term growth pause while earnings dip.
Medium-term drivers: Empiric synergies lifted to £17m p.a. from 2027; university JVs to add ~£29m (Unite share) NOI on completion; portfolio mix increasing towards high-tariff universities ? supports longer-term dividend capacity.

Capital Allocation and Policy Signals

Share buyback: £100m programme launched Jan-26; accretive use of surplus capital alongside dividend.
Disposals: Targeting £300–400m p.a.; agreed sale of St Pancras Way for £186m (Unite share £126m) to USAF; FY25 disposals £214m gross.
Development discipline: Higher return hurdles; some schemes deferred/exited; focus on JVs and nominated beds to underpin cashflows.
REIT: Final dividend wholly PID, fulfilling FY25 PID requirement; policy to keep payout stable in FY26 despite lower EPS guidance shows commitment but tight coverage.

Structural Changes Impacting Future Dividends

Empiric acquisition (Jan-26): ~7,700 beds; part-share consideration increased share count; broadens offer to returners; integration key to earnings recovery.
University JVs: Newcastle and Manchester (4,300 beds, 2028–30) with long-duration, nominated income characteristics supporting stability.
Portfolio reshaping: Accelerated disposals and city mix shift towards high-tariff universities should enhance resilience and pricing power over time.

Risks and Flags

Thin forward cover: FY26 EPS guidance leaves limited buffer if trading weakens further.
Empiric underperformance: 2025/26 occupancy 89% and income below expectations; near-term drag until integration synergies land.
Operational softness: 2026/27 bookings at 68% (ex-Empiric) vs 71% prior; income growth now 0–2% LfL.
Rising finance costs: Average cost of debt expected to increase (4.3% 2026, 4.5% 2027); leverage metrics have ticked up; EPRA NTA down 2%.
Cash outflows: Ongoing fire safety capex (programme through 2031) and tech investment; absence of scrip increases cash dividend outlay.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
17/04/2025	30/05/2025	Final	24.90p	GBX
18/09/2025	31/10/2025	Interim	12.80p	GBX

Total (Annual Dividends Per Share): 37.70p

Dividend Yield = Annual Dividends Per Share (37.70p) ÷ Share Price (479.8p) = 7.86%

Ex Dividend Date	Payment Date	Type	Amount	Currency
16/04/2026	29/05/2026	Final	24.9000p	GBX
18/09/2025	31/10/2025	Interim	12.80p	GBX
17/04/2025	30/05/2025	Final	24.90p	GBX
19/09/2024	01/11/2024	Interim	12.40p	GBX
18/04/2024	24/05/2024	Final	23.60p	GBX
14/09/2023	27/10/2023	Interim	11.80p	GBX
13/04/2023	26/05/2023	Final	21.70p	GBX
15/09/2022	28/10/2022	Interim	11.00p	GBX
14/04/2022	20/05/2022	Final	15.60p	GBX
16/09/2021	29/10/2021	Interim	6.50p	GBX
15/04/2021	21/05/2021	Final	12.75p	GBX
09/04/2020	15/05/2020	Final	22.95p	GBX
19/09/2019	01/11/2019	Interim	10.25p	GBX
11/04/2019	17/05/2019	Final	19.50p	GBX
20/09/2018	02/11/2018	Interim	9.50p	GBX
12/04/2018	18/05/2018	Final	15.40p	GBX
05/10/2017	03/11/2017	Interim	7.30p	GBX
20/04/2017	19/05/2017	Final	12.00p	GBX
06/10/2016	04/11/2016	Interim	6.00p	GBX
21/04/2016	20/05/2016	Final	9.50p	GBX
08/10/2015	06/11/2015	Interim	5.50p	GBX
23/04/2015	19/05/2015	Final	9.00p	GBX
09/10/2014	07/11/2014	Interim	2.20p	GBX
16/04/2014	19/05/2014	Final	3.20p	GBX
09/10/2013	08/11/2013	Interim	1.60p	GBX

Year	Interim	Final	Currency	Total	Change
2024	12.400	23.600	GBX	36.000	7.460
2023	11.800	21.700	GBX	33.500	25.930
2022	11.000	15.600	GBX	26.600	38.180
2021	6.500	12.750	GBX	19.250	-16.120
2020		22.950	GBX	22.950	-22.850
2019	10.250	19.500	GBX	29.750	19.470
2018	9.500	15.400	GBX	24.900	29.010
2017	7.300	12.000	GBX	19.300	24.510
2016	6.000	9.500	GBX	15.500	6.890
2015	5.500	9.000	GBX	14.500	168.510
2014	2.200	3.200	GBX	5.400	237.500
2013	1.600		GBX	1.600

Number of Shares:

Payment	Paid	Amount
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