The Unite Group plc today provides an update on the potential impact of Coronavirus on the business and the measures it is taking to mitigate the resulting risks.
· The Company is well positioned to withstand the impact of the Coronavirus until trading conditions normalise.
· Our balance sheet and liquidity position is robust with significant headroom against debt covenants. The Company has £291 million of cash and undrawn debt facilities available.
· In order to protect the long-term reputation of the business and despite a strong contractual position, the Company will offer to forgo rent for students who choose to return home for the remainder of the 2019/20 academic year. This implies a reduction in Group cashflow of £90-125 million in 2020.
· We are working closely with our University partners and will continue to provide accommodation through our nomination agreements.
· We are implementing a number of actions to mitigate this cash shortfall, including deferring development and non-essential operational capex and cost savings, which would retain an additional £95-105 million of cash in the business in 2020. We will continue to review the cost base of the business and have the ability to make further savings if required.
· In addition, the Board has decided to cancel the final dividend for 2019 and suspend further distributions by the Company until market conditions stabilise. This would retain an additional £124 million in cash during 2020 if no dividend payments are made.
· The combination of these measures will ensure the Company retains cash headroom through the remainder of 2020.
· At this stage, we expect the 2020/21 academic year to commence according to its usual timetable in September. This reflects the Government’s decision to cancel A-Level exams and award grades to students using alternative assessment methods. Latest reservations for 2020/21 are 78%, in line with the prior year (2019/20: 78%) …