Unite Preliminary Results

Unite Group PLC
20 March 2001


Date:                 20 March 2001

Embargoed until:      0700hrs


The UNITE Group plc - PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2000


HIGHLIGHTS

The UNITE Group plc, the UK's leading specialist provider of student and NHS
key worker accommodation services, today released the preliminary announcement
of its results for the year ended 31 December 2000. The key highlights were:


  * Net assets up 237% to £88.7m (1999: £26.3m)
  * Net asset value per share up 92.4% to 200.1p (1999: 104.0p)
  * Earnings per share increased by 109% to 7.71p (1999: 3.69p)
  * Profit before tax up 260% to £3.0m (1999: £0.8m)
  * Turnover up 170% to £30.0m (1999: £11.1m)
  * Dividend of 2.05p per share
  * Investment property portfolio up 107% to £151.4m (1999: £73.0m)
  * Secured pipeline of bed spaces more than doubled to 10,450 (1999: 4,000)
  * Move from AIM to Official List of the London Stock Exchange raising £
    38.5m of new equity.
  * Arrangement of a five year revolving £75m syndicated development
    facility
  * Launch of on-line accommodation services through www.bunk.com
  * Growth of national presence and range of accommodation services

Commenting on the announcement, Geoffrey Maddrell, Chairman of The UNITE Group
plc, said:

'2000 has been a ground breaking year for UNITE. The Group's position as the
UK's leading specialist provider of student and NHS key worker accommodation
has been considerably strengthened during the course of the year. 2000 ended
with UNITE in charge of a significant pipeline of future projects. The Company
is committed to a clear strategy and the outlook is positive across all
streams of activity.'

'In April 2000, UNITE moved from AIM to the Official List of the London Stock
Exchange simultaneously raising £38.5 million of new equity.'

An analysts' meeting will be held at 0915hrs at UNITE's London offices, The
Tower Building, 15th Floor, 11 York Road, London SE1 on 20 March 2001.

Press Enquiries to:

Nick Porter, Chief Executive                          Tel: [phone]

The UNITE Group plc

Emma Kane, Chief Executive                            Tel: [phone]

Redleaf Communications Ltd                            Mob: [phone]

CHAIRMAN'S STATEMENT

Introduction

2000 was a ground breaking year for UNITE. The Company moved to the Official
List of the London Stock Exchange from AIM in April 2000, simultaneously
raising £38.5 million of new equity. The Group is entirely focused on its aim
of releasing academic institutions and NHS Trusts to concentrate on their
primary mission; we aim to provide for them the highest standard and best
value accommodation for students and NHS key workers, as well as delivering
value to our shareholders. UNITE's unique proposition is increasingly in
demand and growth is gathering pace.

Financial Performance

Net assets increased to £88.7m (1999: £26.3m); £26.8m of the increase resulted
from successful development and investment activity, representing an increase
of over 100% on the position at the end of 1999; and £35.6m related to new
equity capital after dividends. Net assets per share increased by 92% from
104.0p to 200.1p (net of dividends paid out and proposed). Net asset value
added in 2000 was 68.4 pence per share (1999: 52.4 pence), an increase of
30.5%. Profit before and after tax increased strongly to £3.0m (1999: £0.8m).
Earnings per share increased by 109% to 7.71p per share (1999: 3.69p per
share). The substantial increase in earnings reflects the strengthening nature
of our portfolio.

Gearing remained within parameters set by the Board of 220% and the Company
ended the year with balance sheet gearing at 90%.

In November, we finalised the arrangement of a five year revolving £75 million
syndicated development facility which will substantially improve the cost of
our development funding, whilst allowing us to retain a high degree of
flexibility over our pipeline. By 31 December 2000, developments worth £18
million had been financed through the facility.

Dividend

The Board is pleased to recommend a final dividend of 1.367p per share (1999:
1.05p per share), making a total dividend for the year of 2.05p per share
(1999: 1.05p per share). The final dividend will be paid on 11th May 2001 for
shareholders on the register at 30th March 2001. The shares become ex-dividend
on 28th March.

Strategy

UNITE's central objective is to build a substantial and profitable long-term
business by providing secure, affordable accommodation to students and NHS key
workers. UNITE's strategy is to create a new industry sector focused on
students and NHS key workers, involving construction, manufacturing and pure
services. Its strategic objectives are:


  * to maintain customer focus and understanding, including developing the
    best available research and data;

  * to deliver flexible, customised solutions through a wide range of
    services and to build long-term relationships;

  * to pursue a fully integrated approach, from planning through to
    day-to-day servicing of accommodation requirements;

  * to address quality and cost issues by adopting a modern manufacturing
    approach and a commitment to whole-life costs;

  * to use on-line facilities to increase the value and range of services to
    our customers;

  * to communicate clear key performance indicators internally; and

  * to encourage teamwork, innovation, learning and excellence in all our
    people.



National Expansion

The secured pipeline of bed spaces, including completed properties, more than
doubled from 4,000 at the end of 1999 to 10,450 at the end of 2000. In the
year, we extended our involvement and range of services, expanding nationally
in line with plan, with significant investments in the North West, North East
and along the South Coast. Many new opportunities are being created and
pursued in other locations throughout the UK.

A total of 2,401 bed spaces were acquired or completed during 2000, bringing
the total number of income producing units to 4,091. Of particular
significance were the following:


  * the completion of a 392 bed development in partnership with Bristol
    University, named UNITE House, where we pioneered the use of modular
    construction techniques;

  * the acquisition of an 840 bed portfolio in central Liverpool servicing
    the students of both Liverpool University and Liverpool John Moores
    University;

  * the completion of 433 bed spaces for NHS key workers in East London
    through our Peabody UNITE joint venture;

  * the completion of a £20 million landmark city centre campus for City of
    Bristol FE College, which is the first project of its kind in the country
    and was officially opened by the Prime Minister in January 2001.

New developments comprising 6,359 beds and worth approximately £220 million on
completion were secured or commenced during 2000. These include:


  * a scheme for the Gateshead Health NHS Trust, representing UNITE's first
    NHS project outside London;

  * two city centre sites in Portsmouth totalling 676 beds, leased to
    Portsmouth University and representing the first phase of a programme to
    deliver 1,300 beds to the University;

  * 328 beds in Exeter for Plymouth for Plymouth University.

UNITE was also announced preferred bidder for two significant projects from
universities seeking to outsource their accommodation needs to the private
sector worth approximately £30 million on completion, as well as being short
listed for a further four.

In September, in order to maximise the full potential of UNITE's activities,
all areas of the business were consolidated under the UNITE brand.

Innovation

The first phase of bunk.com was launched in the autumn, providing UNITE with a
totally unique on-line accommodation services programme. This web site
contains essential data on all 340,000 university managed bedrooms in the
country. By December, it had been developed to offer on-line booking in
conjunction with the functionality of real-time allocation technology.

The Group introduced other initiatives including the use of security call
points for students and key workers, continued progress in the application of
modular construction techniques and the piloting of Internet kiosks.
Initiatives such as these will enable UNITE to revolutionise the way in which
student and NHS accommodation is viewed in the UK.

UNITE also commissioned MORI to conduct the first ever UNITE Student Living
Report.

Management and Employees

The development of UNITE's people to keep ahead of growth remains a key
priority for the business. A new Human Resources team has been put in place
under the leadership of Andrew Lee to ensure a high level of personal
development and training throughout the organisation. In September, we also
relocated both our London and Bristol offices to new premises to enable people
from all areas to work together under the same roof.

In addition, a number of key appointments have been made, including an
important non-executive appointment to the Board. Baroness Prashar of
Runnymede CBE, is First Civil Service Commissioner and Chancellor of De
Montfort University. She was previously a non-executive Director of Channel 4,
Executive Chairman of the Parole Board for England and Wales and Director of
the National Council of Voluntary Organisations. Peter Griffin stepped down as
a non-executive Director.

Outlook

With a growing market based on increased outsourcing of accommodation
requirements, a well-tried strategy in place and a dynamic and determined
team, I am fully confident of the Group's ability to deliver against our
growth strategy. The pipeline of future projects is larger than ever and we
look forward to the challenges and opportunities of 2001 with renewed vigour.

Geoffrey Maddrell

Chairman



Notes to Editors:


  * UNITE was founded in 1991 by Nick Porter

  * UNITE is currently capitalised at £128.9 million

  * Further information on UNITE is available at the Company's website at
    www.unite-group.co.uk

Consolidated balance sheet

at 31 December 2000
                                                2000              1999
                                     Note

                                          £000     £000     £000     £000
Fixed assets
Intangible assets                                  524               65
Tangible assets
Investment and development                151,438           72,974
properties                              2

Other tangible fixed assets               4,474             1,989
Investments                               273               -


                                                   156,185           74,963
Joint venture undertakings
                                        3

Share of gross assets                     41,390            12,967
Share of gross liabilities                (28,448)          (8,411)


                                                   12,942            4,556

                                                   169,651           79,584
Current assets
Stocks                                    5,689             1,658
Debtors                                   11,951            6,164
Cash at bank and in hand                  4,276             1,864

                                          21,916            9,686
Creditors: amounts falling due
within one year
Build facilities and other short          (16,387)          (24,246)
term borrowings
Other creditors                           (18,732)          (10,959)

Net current liabilities                            (13,203)          (25,519)

Total assets less current                          156,448           54,065
liabilities

Creditors: amounts falling due
after more than one year
Long term borrowings (including                    (67,552)         (26,503)
convertible debt)
                                                   
Other creditors                                    -                 (986)
Provisions for liabilities and                     (240)             (244)
charges

Net assets                                         88,656            26,332

Capital and reserves
Called up share capital                 5          11,075            6,329
                                        
Share premium account                              34,752            3,101
Revaluation reserve                                39,513            16,178
Profit and loss account                            3,316             724

Equity shareholders' funds                         88,656            26,332

Consolidated profit and loss account
for the year ended 31 December 2000
                                     Note       2000              1999
                                          £000     £000     £000     £000

Group turnover and share of                        30,444            11,147
turnover of joint venture
Less: share of turnover of joint                   (492)             (90)
venture

Group turnover                                     29,952            11,057
Cost of sales                                      (21,359)          (7,906)

Gross profit                                       8,593             3,151
Administrative expenses                            (3,013)           (1,009)

Group operating profit                             5,580             2,142
Share of operating profit of joint                 381               66
venture
Profit on disposal of investment                   372               -
properties

Profit on ordinary activities                      6,333             2,208
before interest and taxation

Interest receivable                                474               341
Interest payable and similar            6
charges
Group                                     (3,450)           (1,626)
Joint venture                             (331)             (81)

                                                   (3,781)           (1,707)

Profit on ordinary activities                      3,026             842
before taxation
                                                   
Taxation                                7          -                 7

Profit for the financial year                      3,026             849
Dividends paid and proposed             8          (908)             (266)

Retained profit for the financial                  2,118             583
year

Earnings per share
Basic                                   9          7.71p             3.69p
Diluted                                            7.54p             3.62p


Consolidated cash flow statement
for the year ended 31 December 2000
                                                       Note 2000      1999
                                                            £000      £000

Cash flow from operating activities                      10 2,836     6,549
Returns on investments and servicing of finance          11 (5,045)   (2,937)
Taxation                                                    (28)      (133)
Capital expenditure and financial investment             11 (63,749)  (29,713)
Equity dividends paid                                       (569)     -

Cash outflow before management of liquid resources          (66,555)  (26,234)
and financing
Management of liquid resources                              -         2,663
Financing                                                11 68,967    25,052

Increase in cash in the year                                2,412     1,481


Reconciliation of net cash flow to movement in net debt
for the year ended 31 December 2000
                                                    2000          1999
                                                    £000          £000

Increase in cash in the year                        2,412         1,481
Cash flow resulting from movement in liquid         -             (2,663)
resources
Cash flow from increase in debt and lease           (32,570)      (20,760)
financing

Change in net debt resulting from cash flows        (30,158)      (21,942)
New hire purchase agreements                        (477)         (216)
Amortisation of loan stock issue costs              (143)         (83)

Movement in net debt in the year                    (30,778)      (22,241)
Net debt at beginning of year                       (48,885)      (26,644)

Net debt at end of year                             (79,663)      (48,885)


Consolidated statement of total recognised gains and losses
for the year ended 31 December 2000
                                                    2000          1999
                                                    £000          £000

Profit for the financial year
Group                                               2,976         864
Share of joint venture                              50            (15)

                                                    3,026         849
Unrealised surplus on revaluation of                15,082        6,645
properties
Unrealised surplus on revaluation of joint          8,727         4,545
venture

Total gains and losses for the financial year       26,835        12,039


Note of consolidated historical cost profits and losses
for the year ended 31 December 2000
                                                          2000       1999
                                                          £000       £000

Reported on ordinary activities before taxation           3,026      842
Realisation of property revaluation gains of              474        -
previous years

Historical cost profit on ordinary activities             3,500      842
before taxation

Historical cost profit for the year retained after                   583
taxation and dividends                                    2,592

Reconciliation of movements in shareholders' funds
for the year ended 31 December 2000

                                             2000              1999
                                             £000              £000

Profit attributable to ordinary shareholders 3,026             849
Dividends paid and proposed                  (908)             (266)

                                             2,118             583
Net surplus on revaluations                  23,809            11,190
Net proceeds of new share capital subscribed 36,397            4,292

Net addition to shareholders' funds          62,324            16,065
Opening equity shareholders' funds           26,332            10,267

Closing equity shareholders' funds           88,656            26,332

Notes to the accounts

1.     Basis of preparation

The Group accounts include the accounts of the Company and its subsidiary
undertakings all of which are made up to 31 December 2000.

The financial information set out in this document does not constitute the
Company's statutory accounts for the years ended 31 December 2000 or 1999.
Statutory accounts for 1999 have been delivered to the registrar of companies,
and those for 2000 will be delivered following the company's Annual General
Meeting. The auditors have reported on those accounts; their reports were
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.

2.     Investment and development properties
                        Completed Developments    Properties held for     Total
                     developments           in     future development
                                      progress
                             £000         £000                   £000      £000
Group
Cost or valuation
and net book value
At beginning of year       35,366       30,491                  7,117    72,974
Additions                  35,991       27,854                  6,025    69,870
Disposals                       -      (5,190)                (1,298)   (6,488)
Transfers                  38,928     (33,108)                (5,820)         -
Revaluations                9,165        2,349                  3,568    15,082


At 31 December 2000       119,450       22,396                  9,592   151,438


At 31 December 1999        35,366       30,491                  7,117    72,974


3.     Joint venture undertaking

At 31 December 2000, the Group's investment in joint venture represented a 50%
shareholding of the ordinary shares of Peabody Unite plc.

The amounts included in respect of the joint venture comprise the following:

                               2000                    1999
                               £000                    £000

Share of assets
Fixed assets                   40,948                  12,447
Current assets                 442                     520

                               41,390                  12,967
Share of liabilities
Due within one year            (12,277)                (8,411)
Due after one year             (16,171)                -

Share of net assets            12,942                  4,556




4.     Analysis of debt
                                                  2000           1999
                                                  £000           £000

Bank loans, other loans and overdrafts fall due:
In one year or less, or on demand                 16,158         24,130
Between one and two years                         1,470          1,292
Between two and five years                        12,763         10,354
In five years or more                             52,940         14,707

                                                  83,331         50,483

Obligations under hire purchase agreements:
In one year or less, or on demand                 229            116
Between two and five years                        379            150

                                                  608            266

Less: Cash at bank and on hand                    (4,276)        (1,864)

Net debt at the end of the year                   79,663         48,885


The Group has various borrowing facilities available to it. The undrawn
committed facilities available at 31 December 2000 in respect of which all
conditions precedent had been met at that date were as follows:

                                         2000              1999
                                         £000              £000

Expiring in one year or less
Build facilities                         17,761           11,676
Other facilities                         5,000             657

                                         22,761            12,333



5.     Called up share capital
                                                    2000          1999
                                                    £000          £000
Authorised
75,000,000 (1999: 45,000,000) ordinary shares of    18,750        11,250
25p each


Allotted, called up and fully paid
44,299,438 (1999: 25,313,965) ordinary shares of    11,075        6,329
25p each



On 7 April 2000 , the Company increased its authorised share capital by £
7,500,000 to £18,750,000 divided into 75 million shares by the creation of 30
million ordinary shares of 25p each.

On 11 April 2000, the Company allotted and issued 18,985,473 ordinary shares
of 25p each by way of a placing and open offer at 203p per share upon
admission of trading on the Official List of the London Stock Exchange. The
net proceeds of the issue were £36,397,000.

6.     Interest payable and similar charges
                                                      2000         1999
                                                      £000         £000

On loans not wholly repayable within five years       3,217        1,083
On loans wholly repayable within five years           1,300        1,908
On bank overdrafts                                    144          -
On convertible unsecured loan stock                   466          272
Finance charges payable in respect of hire purchase   8            15
agreements
Amortisation of issue costs of loan stock             143          83


                                                      5,278        3,361
Transfer to cost of investment and development        (1,828)      (1,735)
properties


                                                      3,450        1,626
Share of interest payable by joint venture            331          81


                                                      3,781        1,707



7.     Taxation
                                                      2000         1999
                                                      £000         £000

UK corporation tax at 30% (1999: 30%)                 1,220        373
Tax relief for capital allowances on non-depreciated  (555)        (179)
property
Tax relief on capitalised interest                    (622)        (194)
Capital loss incurred                                 (43)         -


                                                      -            -
Adjustment relating to an earlier year                -            (7)

                                                      -            (7)



8.     Dividends
                                                        2000        1999
                                                        £000        £000

Equity
Interim dividend paid of 0.683p (1999: nil) per 25p     303         -
ordinary share
Final dividend proposed of 1.367p (1999: 1.05p) per 25p 605         266
ordinary share

                                                        908         266


The proposed final dividend of 1.367 pence net ordinary share will be paid on
11 May 2001 to holders of ordinary shares on the register at the close of
business on 30 March 2001.

9.     Earnings per share

Basic earnings per share of 7.71p (1999: 3.69p) has been calculated on
earnings of £3,026,000 (1999: £849,000), divided by the average number of
ordinary shares in issue during the year of 39,225,847 (1999: 22,983,112).

Diluted earnings per shares of 7.54p (1999: 3.62p) has been calculated on
earnings of £3,026,000 (1999: £849,000) and after including the effect of all
dilutive potential ordinary shares, which increases the average number of
shares to 40,128,789 (1999: 23,457,981).

10.     Reconciliation of operating profit to operating cash flows

                                             2000             1999
                                             £000             £000

Operating profit                             5,580            2,142
Depreciation and amortisation charges        455              209
(Increase)/decrease in stocks                (4,031)          1,714
Increase in debtors                          (5,787)          (3,198)
Increase in creditors and provisions         6,619            5,675
Loss on sale of fixed assets                 -                7

Net cash inflow from operating activities    2,836            6,549


11.     Analysis of cash flows
                                                       2000        1999
                                                       £000        £000

Returns on investment and servicing of finance
Interest received                                      474         341
Interest paid                                          (5,511)     (3,263)
Interest element of hire purchase payments             (8)         (15)

Net cash flow from returns on investment and servicing (5,045)     (2,937)
of finance

Capital expenditure and finance investment
Purchase of tangible fixed assets                      (69,910)    (29,704)
Purchase of intangible fixed assets                    (466)       (9)
Disposal of tangible fixed assets                      6,900       -
Purchase of own shares                                 (273)

Net cash flow from capital expenditure and financial   (63,749)    (29,713)
investment

Financing
Issue of share capital                                 36,397      4,292
Issue of convertible loan stock                        -           5,406
Movement on build facilities                           (9,630)     12,919
Movement on bank loans                                 42,335      2,527
Capital element of hire purchase payments              (135)       (92)

Net cash flow from financing                           68,967      25,052