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Unite Group Sees Lower Income; To Cut Pay For Four Months

Student accommodation provider Unite Group plc. (UTG.L), in its Coronavirus update, Wednesday said it it expects a reduction in income from the 2019/20 academic year of 16-20 percent on a Group share basis, an improvement on previous expectations.

The company expects to forgo rent on around 43,000-46,000 beds representing around 62-65 percent of all owned and managed beds based on cancellation requests received to date.

The remaining beds are accounted for by students who have chosen to continue their stay and beds let under nomination or lease agreements, where Universities collect rent directly from students. The company has received 94 percent of the rent due to date in April under these nomination and lease agreements.

Remaining payments by Universities for the summer semester are staggered between April and September 2020.

For the 2020/21 academic year, reservations across the Group are currently at 80 percent, compared with 81 percent at the same time last year.

Regarding its cost and cash saving measures, the Board has agreed to a 30 percent reduction to salaries and pension contributions for Executive Directors, 10-20 percent for senior management and a 30 percent reduction in fees payable to Non-Executive Directors. These reductions will be effective for a four-month period from April 1.

Bonus payments for Executive Directors will also be suspended for 2020

These savings, together with its decision to defer development and non-essential operational capex, will retain an additional 95 million pounds to 105 million pounds of cash in the business in 2020.

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