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Unite Group to forgo rent for students leaving rooms before term ends

Students with nowhere to go over the summer will also be offered free accommodation

Unite Group - Unite Group PLC cancels final dividend to save cash amid coronavirus uncertainty

Unite Group PLC (LON:UTG) is to offer occupants to forgo rent should they choose to return home for the remainder of the current academic year.

The measure would hit cashflow by £90-125mln.

READ: Unite Group expects minor hit from coronavirus outbreak

Students who are unable to return home at the end of their tenancies will be offered rooms free of charge over the summer months, when business had been reduced anyway.

The student accommodation developer also cancelled the final dividend for 2019, while reduction of non-essential spend allows an estimated £20-30mln in cash savings for this year.

As of Tuesday, the FTSE 250-listed firm had £141mln in the bank and £150mln of undrawn revolving credit facilities.

The firm dropped guidance but said reservations for the upcoming academic year were 78%, in line with 2019.

" There is a risk that we see a reduced level of overseas intake and Unite is ready to shift its marketing to domestic and 2nd/3rd year students," analysts at Peel Hunt said.

Shares rose 3% to 805.5p on Wednesday morning.

--Adds analyst's comment--

Quick facts: Unite Group

Price: 740 GBX

LSE:UTG
Market: LSE
Market Cap: £2.69 billion
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