Student housing giant Unite said on Wednesday that it will not charge rent for students who do not stay in their accommodation for the remainder of the 2019-20 academic year, effectively assuming costs estimated at between £90 mln and £125 mln.
In addition, for international students who are unable to return home at the end of their tenancies, Unite will provide accommodation over the summer months at no extra cost.
To mitigate this cash shortfall, the company is implementing a number of measures, including deferring development and non-essential operational capex and cost savings, which would retain an additional £95-105 mln 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,’ Unite said in a statement.
Unite has told investors it is well positioned to withstand the impact of coronavirus until trading conditions normalise. It said its balance sheet and liquidity position ‘is robust with significant headroom against debt covenants’. The company has £291 mln of cash and undrawn debt facilities available.
In addition, the company’s 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 mln 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.’