The UNITE Group plc
The Tower Building
Twelfth Floor
11 York Road
London SE1 7NX
T 020 7902 5050
F 020 7902 5051
info@unite-group.co.uk
www.unite-group.co.uk
Designed and produced by Proteus  www.proteus-uk.com
The UNITE Group plc
Annual Report
and Accounts 2004
A United Experience
The UNITE Group plc Annual Report and Accounts 2004 A United Experience Committed to enhancing the 
student experience
By continuing to focus on delivering a ﬁrst class
customer experience, UNITE provides great value,
purpose built, rented accommodation in all the best
locations. We keep in touch with our customers'
dreams, our peoples’ careers and our shareholders’
interests to further our aim of being the ﬁrst choice for
student hospitality.
Moving in Annual Report 2004 01
A united vision -
the ﬁrst choice for students
Overview and highlights 2004
2004 2003
£m £m
Net assets 369.6 326.8
The investment property portfolio 1,110.5 948.8
Net debt 731.5 593.9
Turnover 74.6 48.1
Loss before tax and (1.1) (5.2)
goodwill amortisation
Loss before tax (3.8) (10.8)
Key ratios
Net asset value per share 332p 302p
Loss per share before (1.0)p (4.8)p
goodwill amortisation
Loss per share (3.5)p (10.0)p
Net debt as percentage of 198% 182%
shareholders funds
Group at a glance 02
Chairman’s statement 05
Chief Executive Ofﬁcer’s review 09
Group Finance Director’s report 15
Our people 20
Market insight 22
The Board of Directors 24
Directors’ report 26
Corporate governance 30
Directors’ remuneration report 34
Independent auditors’ report 38
Consolidated proﬁt 39
and loss account
Consolidated statement of total 39
recognised gains and losses
Consolidated balance sheet 40
Company balance sheet 41
Consolidated cash 42
ﬂow statement
Reconciliation of net cash 42
ﬂow to movement in net debt
Note of consolidated historical 43
cost proﬁts and losses
Reconciliations of movements 43
in shareholders’ funds
Notes to the ﬁnancial statements 44
Five year record 61
Notice of Annual 62
General Meeting
Company information 64
Contents
Net asset value per share
(pence per share)
2002
2003
2004
286p
302p
332p
Total completed beds
2002
2003
2004
14,778
21,215
26,319
Completed portfolio value
2002
2003
2004
£542m
£788m
£991m
Rental income
(£m)
2002
2003
2004
£32.4m
£48.1m
£66.8m
8126 UNITE A\R 64pp Interior  18/4/05  11:25  Page 1 UNITE is transforming the student
accommodation market, developing an
unrivalled range of accommodation,
customer support services and
innovations.
Working together to achieve a 
ﬁrst class customer experience
Group at a glance
Harnessing the synergy of our three core
divisions; Development, Accommodation
Services and Modular Construction
supported by Group Services, UNITE is at
the forefront of a brand new asset class. 
Our business model is simple and
unique: we develop, manage and rent
student accommodation. We aim to
reach out to new customers by continuing
to develop our services, by extending
the opportunities for the career
enhancement of our people and thereby
improving shareholder return.
02   Annual Report 2004
City Completed Completed FT Student Projected 3yr Growth
Beds 12/04 Beds 12/05 Numbers Market in FT
03/04 Share 12/05 Student
Numbers
Bristol 2,849 3,082 32,344 10% 11%
Liverpool 2,832 2,832 36,360 8% 14%
London 2,173 2,564 196,727 1% 17%
Shefﬁeld 1,203 2,365 39,734 6% 12%
Manchester 2,345 2,345 54,296 4% 14%
Glasgow 1,068 1,561 45,800 3% 7%
Portsmouth 1,402 1,402 15,008 9% 22%
Aberdeen 1,301 1,301 18,222 7% 10%
Cardiff 443 1,278 26,842 5% 13%
Leeds 1,061 1,251 47,066 3% 24%
16,677 19,981 512,399 4%
Our top ten markets
Develop Manage Rent
Note: Includes beds under management
8126 UNITE A\R 64pp Interior  18/4/05  11:25  Page 2 New accommodation
opening in 2005
Birmingham
Bournemouth
Bristol
Cardiff
Glasgow
Leeds
London
Nottingham
Shefﬁeld
Group at a glance
Annual Report 2004 03
1
2
3
1
2
1
2
3
Accommodation 
opened in 2004
Bath
Bristol
Birmingham
Cardiff
Leeds
Leicester
Liverpool
London
Loughborough
Plymouth
Southampton
Completed portfolio by
agreement type*
Customer proﬁle 2004
1 Overseas students 34%
2 UK students 66%
1 Postgraduates 7%
2 First years 16%
3 Other undergraduates 77%
1 Direct let 62%
2 Lease 22%
3 Nominations** 16%
*bed numbers
**occupancy guaranteed by universities
8126 UNITE A\R 64pp Interior  18/4/05  11:25  Page 3 Sharing
More than just accommodation,
UNITE can be the place where
long-term friendships are formed
8126 UNITE A\R 64pp Interior  18/4/05  11:26  Page 4 At the beginning of 2004 I set out an
important new phase in our strategy, as
we began to reach the scale of
operations envisaged at the time we ﬁrst
came to the public market. This new
phase, designed to build on our position
as the UK’s largest provider of student
accommodation, focused on three core
themes: enhancing the quality of our
investment portfolio whilst maintaining an
annual programme of steady but
signiﬁcant portfolio growth; enhancing
our customer service through the
development and training of our people
and market research; and restructuring
our capital base whilst continuing the
strong operating performance of the
business and improving margins. 
With this in mind, I am delighted to report
on a year of strong performance.
net asset value per share grew by 
10.0% to 332p (2003: 5.6% growth, 
302p);
our asset disposals and joint ventures,
involving in total some £173 million of
assets (based on estimated values at
completion), have helped ﬁrmly
establish our asset class in the broader
investment community and have
provided much needed transactional
evidence for the market;
full year pre tax losses (before 
goodwill amortisation) reduced sharply 
to £1.1 million from £5.2 million in 2003.
Financial results
Net asset value remains the key indicator
to the value of our business. At 332p per
share as at 31 December 2004 (2003:
302p), this has grown by 10% during the
year, driven predominantly by our
continued development activity. 
Staying true to our clear strategy
Chairman’s statement
As the UK's largest provider of student
accommodation services we are committed to
delivering continued growth within our
development portfolio whilst ensuring we
continually seek to improve our understanding
of, and services to, our customers.
Annual Report 2004 05
Geoffrey Maddrell
Chairman
During the year the business successfully
delivered 5,104 new bed spaces into our
investment portfolio and also increased
the number of conﬁrmed deliveries for
2005 to 4,677 beds (including assets held
in joint ventures) with another 5,759 beds
also secured and fully funded for delivery
in 2006 and beyond. Pipeline visibility
remains a key strength of the business.
Taking into account the new beds
delivered during the year, our completed
and managed portfolio grew by 24% to
26,319 bed spaces, and was valued at
£991 million as at 31 December 2004,
excluding 1,246 beds sold to Morley
during the year and now managed on
their behalf. Rental income for the year
was up 39% to £66.8 million, again due
mainly to the larger portfolio, but also
reﬂecting strong like-for-like revenue
growth (6.8% between academic years
2003/04 and 2004/05). 
Completed portfolio value
Built-out 2004 2003 2002 2001
0
200
400
600
800
1,000
1,200
1,400
Value (£million)
289
542
788
991
1400
8126 UNITE A\R 64pp Interior  18/4/05  11:26  Page 5 Operating proﬁts from the completed
portfolio were up 41% to £41 million,
growth at this level outpacing turnover
growth as a result of continued scale
beneﬁts and asset stabilisation. This is
reﬂected in our operating margin which,
adjusted for the lease cost element of the
sale and leaseback transaction with
Morley, again increased, to 62.1% up
from 60.5% for 2003. 
New borrowing associated with our
continued development activity
contributed to an increase in net debt 
to £731 million and an increase in 
our balance sheet gearing to 198% 
(31 December 2003: 182%). Importantly,
however, this level of gearing has not
increased when compared to that as at
30 June 2004 (199%); the Group has
begun to demonstrate its ability to
manage its gearing through asset
disposals and joint ventures whilst
continuing to grow its portfolio. 
This higher level of borrowing resulted in
an increase in the Group’s interest costs.
Although average gearing during the year
increased by 40%, portfolio interest cover
was largely maintained at 1.11 times
(2003: 1.15 times). Taking the
aforementioned items into account,
portfolio proﬁt increased marginally to
£4.0 million from £3.9 million in 2003. 
Finally, the introduction of joint ventures,
coupled with the sale of certain non core
parts of larger development sites, has
introduced a new element to the Group’s
proﬁt and loss account. These activities
contributed £1.2 million to the Group’s
proﬁt before interest and tax in 2004 a
contribution to proﬁts from this source
stream is expected to continue in 
the future.
Dividend
In accordance with our stated policy, the
Board is pleased to recommend a ﬁnal
dividend of 1.67 pence per share, making
a total dividend of 2.5 pence per share for
the year (2003: 2.5 pence). The dividend
will be paid on 13 May 2005 to
shareholders on the register as at 15
April 2005. 
Business performance
Our 26,319 bed portfolio of completed
accommodation (2003: 21,215 beds)
remains in demand, as evidenced by our
average occupancy rate of 95% of
available rooms entering the 2004/05
academic year (2003: 96%) and the
strong like-for-like revenue growth of 6.8%
achieved in the current academic year. 
UNITE is committed to growing its
portfolio through continued development
and has built up a wealth of expertise and
a strong reputation with both land owners
and local planning authorities in this area
over the past 12 years. As a result,
despite a challenging development
market, site availability remains generally
good; we continue to work well in
partnership with planning authorities to
deliver new high quality schemes, whilst
our overall target development margins
have been achieved.
Set against this background is our
development pipeline of some 10,436
beds. All of these beds are fully funded
and will contribute greatly to the overall
quality of our future investment portfolio.
We have remained successful in
combating build cost inﬂation through our
investment in modular construction and
through contractor partnering. Inﬂationary
pressures in this area continue but,
despite this, we expect to be able to
contain any future reduction in
development margins to a small and
manageable level.
The performance of our modular
construction division during 2004 has
been encouraging. It exceeded its
production volume target for the year,
achieving overall output of some 2,530
modules together with the associated
componentry. At these levels of
production the facility is fully competitive
with traditional construction. In the more
benign inﬂationary environment of the
manufacturing sector, and with production
volumes expected to increase further in
2005, this division is well positioned for
further improvements in performance. 
Market conditions
Market conditions in 2004 were, and
remain, positive for UNITE both in terms of
student occupier demand and our evolving
asset class. In the UK higher education
sector, student numbers continue to grow,
with increased demand both from UK
domiciled students and from international
students seeking to beneﬁt from the strong
reputation of our University system. As
importantly, the strong commercial property
market and the resulting yield compression
across the more traditional asset classes
has brought alternative investment options,
such as student accommodation, into
sharper relief for investors. Against a back-
drop which now sees the reference
Investment Property Databank (‘IPD’) initial
yield substantially below 6%, the average
initial yield across our portfolio of 6.56%
looks increasingly attractive. 
Customers
As the UK’s largest student landlord, 
UNITE has a responsibility to all its
stakeholders to ensure that it continually
seeks to improve its understanding of, and
services to, its customers.
We fully recognise the fact that our success
is reliant on continuing to provide a high
quality, affordable accommodation
experience and we have introduced a
number of important initiatives during the
course of the year to this effect. This
includes the introduction of broadband
technology across the estate and increased
stafﬁng resource at the property level. Some
of these initiatives have impacted slightly on
margins for 2004 but will start to deliver
positive improvements in the short term.
People
During 2004 we continued our focus on
personal and professional development and
the strengthening and deepening of
UNITE’s management team. We were able
to make internal promotions, supported by
succession planning and intensive
management development. This included
promoting two internal candidates to lead
two of our operating divisions. 
Our investment in training for the business
as a whole has had a signiﬁcant impact
on improving customer service and
motivating staff.
06   Annual Report 2004
Chairman’s statement
8126 UNITE A\R 64pp Interior  18/4/05  11:26  Page 6 Annual Report 2004 07
Alexandra Works
Plymouth
246 en-suite study rooms
Opened 2004
Overall, our workforce grew by 209 to 773
and our level of employee satisfaction,
measured by an external survey, grew to
that of the upper decile of companies in
the UK.
Outlook
2004 has unquestionably been a year of
achievement for UNITE. The Group has
been able to beneﬁt from its consistency of
strategy and the positive market conditions
which existed throughout the year.
With the beneﬁt of its stable foundation,
robust business model and the positive
market we plan to build on our success in
the coming year gaining further from our
economies of scale; developing further
the investment market for student
accommodation; increasing the diversity
and ﬂexibility of our capital base; and
pursuing a strategy of managed growth
across our business and portfolio.
Chairman’s statement
8126 UNITE A\R 64pp Interior  18/4/05  11:26  Page 7 Getting to know each other
Designing living spaces
which compliment our
customers’ needs
8126 UNITE A\R 64pp Interior  18/4/05  11:26  Page 8 The Group’s activities in 2005 will
build upon the achievements of 2004
and our customer focused strategy
will provide a platform for continued
success in the future.
In last year’s Annual Report I set out my
vision of how UNITE would evolve in 2004.
The key elements I identiﬁed were:
a total commitment to our customers 
and people as being at the core of 
operating success; 
shifting the focus of our activities 
towards maximising the return from our
existing portfolio in conjunction with 
that from a quality-led development 
pipeline; and
broadening our range of available 
ﬁnancing options and thereby 
improving ﬂexibility. 
It is particularly pleasing, therefore, to
report on a year of substantial progress
against all objectives.
Continued steady growth in our portfolio
saw the Group deliver an additional 5,104
beds into the completed portfolio,
increasing its value to £1.0 billion. The
completed portfolio performed strongly,
with average occupancy of 95% of
available rooms at the start of the 2004/05
academic year (2003: 96%) and like-for-
like revenue growth of 6.8% between the
last and current academic years (2003:
7.6%). Development pipeline visibility
remains good, with 4,677 beds scheduled
for delivery for the academic year 2005/06
(including assets held in joint ventures)
and a further 5,759 beds already secured
for delivery in 2006 and beyond. All of
these new developments are fully funded
in equity and debt terms and are
expected to add a further 48 pence per
share to the Group’s net asset value upon
completion and letting.
Finally, our disposal and joint venture
activity provided increased ﬁnancial
ﬂexibility for the Group and much needed
valuation evidence for the market.
Student Accommodation
market overview
The fundamentals of the UK Higher
Education sector remain in our favour.
Student numbers grew (for the thirtieth
consecutive year) by 0.9% coming into
the current academic year, with
particularly strong demand from overseas
students, where numbers increased by
some 12% year-on-year. This trend looks
set to continue, with Universities
increasingly targeting the more lucrative
overseas market, and with successful
study applications to the competing US
market declining sharply as a result of the
current global environment.
Listening to our customers,
people and shareholders
Chief Executive Ofﬁcer’s review
Annual Report 2004 09
Nicholas Porter
Chief Executive Ofﬁcer
Mercury Point
Southampton
562 en-suite study rooms
Opened 2004
8126 UNITE A\R 64pp Interior  18/4/05  11:26  Page 9 The strain that this puts on Universities’
infrastructure, particularly accommodation,
is obvious. T o help meet this need UNITE
continues to provide much needed high
quality housing in key University markets.
The supply of accommodation is
struggling to keep pace with this
increased demand. Whilst Universities are
beginning to provide new accommodation
through public-private partnership
initiatives, with mixed success, much of
the new stock is replacing existing out-
dated housing such that the net increase
in supply is relatively small. 
Increased licensing standards will come
into force in 2006 following passing of the
Housing Act in December 2004. As a
result, the private rented sector, which
currently represents approximately 65% of
all student accommodation, will need to
meet the required standards to gain a
license to operate. This has been further
exacerbated in some markets through the
sustained rise in house prices, which has
encouraged smaller private landlords to sell
and thereby release housing stock back
into the private residential market. Indeed,
some Universities have followed a similar
course with their own residential housing
stock to release capital.
Student and University funding remains a
sensitive and challenging issue. The
planned introduction of variable tuition fees
has begun to provide Universities with
increased funding options, but at current
levels they are still faced with a signiﬁcant
funding gap that necessitates increasingly
innovative solutions, in which parties such
as UNITE can make a positive contribution.
From a student perspective, independent
research carried out by MORI on behalf
of UNITE suggests that they are
becoming increasingly comfortable with
funding investment in their education
through increased borrowings. With the
effective deferral of tuition fees into their
employment lives, students’ immediate
disposable income will, in fact, increase
under the new arrangements.
In this changing environment students, and
their parents, have a heightened consumer
attitude and are demanding improvements
in the services they receive. It is with this in
mind that UNITE’s customer led strategy
remains as important as ever. 
Our customers
In 2004 UNITE provided accommodation for
over 26,000 students and this will increase to
31,000 by the end of 2005. In this context, our
customer focused strategy added
considerable value to the business in 2004
and will form the platform for continued
success in the future. It provides a challenging
framework within which to measure our
decisions and performance and has provided
impetus in a number of critical areas.
Our programme of openings in 2004 was
our best ever. Of particular note was a
greatly enhanced approach to building
commissioning, especially in those
projects which beneﬁted from off-site
manufacturing, and smoother team
mobilisation. This was aided by the fact
that we did not open buildings in any new
cities and could therefore leverage our
existing local infrastructure.
We have made important improvements to
the speciﬁcation of our new projects. 
Many important changes took effect with
schemes delivered in 2004 and all pipeline
10   Annual Report 2004
Chief Executive Ofﬁcer’s review
Demand is increasing
for high quality facilities
like the privacy and
convenience of en-suites
8126 UNITE A\R 64pp Interior  18/4/05  11:26  Page 10 Annual Report 2004 11
projects for delivery in 2005 and beyond
have also beneﬁted from a signiﬁcant
enhancement in the level of communal
facilities offered. This is particularly true
of our larger projects. We are conﬁdent
that this will help shape the expectations
of students in the future.
In June 2004 we announced a
partnership with BT to provide
broadband services across our entire
estate. This service had been rolled out
across our portfolio by December 2004
and subscription uptake has been
encouraging. The opportunities for us to
further enhance our customers’
experience through leveraging this
infrastructure are signiﬁcant.
We have increased the level of on-site
resource at our properties. Part of this
has been as a result of the in-sourcing of
certain services (such as basic
maintenance) but we have also moved
to shift certain responsibilities to the ﬁeld
teams from the centre. This increased
resource will have impacted slightly on
margins for 2004 but will deliver positive
improvements in the short term.
T o provide further support to our local
ﬁeld teams and position the business to
beneﬁt from the newly installed
broadband infrastructure, we have
commenced an investment programme
in relation to our systems platform, aimed
at delivering increased efﬁciencies for
UNITE, allowing our customers greater
functionality and resulting in signiﬁcant
competitive advantage.
Customer satisfaction and
recommendation rates are an important
measure of our success and future
prospects. During 2004, our customer
satisfaction ratings increased by 9% and
recommendation rates remained high at
92%. Much of this improvement can be
attributed to the above initiatives on
which we intend to build.
In addition to the important initiatives
aimed at improving returns from our
existing portfolio, we also recognise the
challenges represented by our future
growth plans and are conﬁdent we have
the competencies to meet them.
Chief Executive Ofﬁcer’s review
Friendly, ﬂexible
common spaces that
feel like home
Site availability remains generally good
and there are signs that pressures in
other segments of the property
development market are presenting
opportunities for us.
The planning environment remains
positive for the Group. We have a
signiﬁcant track record with each of the
local planning authorities with whom
we work and have worked effectively in
promoting a clear understanding of the
urban regeneration beneﬁts of student
housing. As part of this, we are
participating fully in the Government
consultation process being undertaken
as part of the Barker Review and will
continue to do so as future policy 
is shaped.
Build cost inﬂation remains a signiﬁcant
challenge for the Group, in common
with the broader development market.
It is therefore encouraging that we have
been able to maintain development
margins at our target level, although
there will inevitably be some downward
pressure on margins in the future,
driven by skills shortages in labour
markets, the impact of new regulations
and upwards pressure on the prices of
key raw materials.
8126 UNITE A\R 64pp Interior  18/4/05  11:26  Page 11 Given the pressures of build cost inﬂation,
the performance of our modular
construction division during 2004 was
encouraging. With production output of
2,530 modules together with the
associated componentry, the division was
ﬁnancially competitive with traditional
construction alternatives. Furthermore,
additional modular construction beneﬁts
of certainty of delivery and improved
quality have been evident. 98.2% of
deliveries to site were achieved on time
and process improvements introduced at
the manufacturing facility reduced on-line
defects by more than 85% over the
course of the year. As a result, on site
defects and commissioning times were
greatly reduced. Further increases in
production volumes, increasing efﬁciency
and the more favourable inﬂationary
environment of the manufacturing sector
mean that our modular construction
business is well positioned to build on
this success in 2005.
12   Annual Report 2004
Chief Executive Ofﬁcer’s review
Our people
Throughout the year we invested in
strengthening our property based and
manufacturing teams, growing our
headcount by 37% to 773. This growth
has been supported by our continuing
commitment to training and development.
We have continued with our core
programmes of management
development to instill core people skills
consistently across the Group. In
particular, we have invested in a major
customer service initiative for all
colleagues and have deﬁned our values
to underpin our strategy of delivering for
our customers, people and shareholders.
Employee satisfaction, one of our key
drivers, has also increased signiﬁcantly. At
almost 80% satisﬁed, this measure puts
UNITE in the top ten per cent of employers
in the UK. Over 90% of colleagues say
they enjoy the work they do and a similar
proportion rank the performance of their
line manager favourably, showing the
impact of our Group wide management
development activities.
In building on the important theme of
stability and in ensuring that we properly
anticipate the needs of our future skills,
we introduced a career development and
succession planning process in 2004
and have begun the work to develop
our colleagues to achieve our future
growth plans.
In addition, we have linked personal and
professional development with meeting
our corporate and social responsibilities,
through colleagues supporting local
charities and communities as part of their
ongoing growth and development.
Looking forward
The Group’s activities in 2005 will build
upon the achievements of 2004. The
student accommodation market remains
positive and, with an ever increasing
understanding of our customers’ needs,
UNITE is well positioned to further cement
its position as the UK’s largest student
landlord. Our growth opportunities remain
signiﬁcant and our proven infrastructure
will allow us to capitalise on this in a
managed way. 
Furthermore, with our credibility in the
student market now beginning to be
reﬂected in the broader ﬁnancial and
property markets as well, we will be using
2005 to build further on the important
advances made in the ﬂexibility of our
capital base.
UNITE has achieved a considerable
amount in its ﬁve years as a publicly
quoted company, not only growing its
portfolio by a factor of ﬁfteen, and its
operations commensurately, but through
effectively establishing the student
accommodation asset class at the same
time. With a market share of less than 4%
in our major markets, the future
opportunities are just as great and I am
looking forward to 2005 being as
successful as 2004.
Grand Central, Liverpool
8126 UNITE A\R 64pp Interior  18/4/05  11:26  Page 12 Happy days
“Students that stay at home
miss out on the whole
university experience”
Source: 2005 Student Experience Report,
commissioned by UNITE and conducted by MORI
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 13 Comparing notes
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 14 Delivering growth and value
Group Finance Director’s report
2004 was another strong year of growth;
developing further the investment
market for student accommodation and
diversifying our sources of capital whilst
delivering our strategy of managed
growth in our portfolio.
Mark Allan
Group Finance Director
In our Annual Report for 2003 I set out
clearly some important objectives for the
ﬁnancing of our business. Those
initiatives were designed to improve the
ﬂexibility of our capital base by
diversifying our sources of capital and
developing investor awareness of our
asset class. The solid operating
performance of the business in 2004
enabled us to meet those objectives. 
The strong real estate market leaves us
well placed to build on these
achievements further during 2005. 
Our investment portfolio
Our investment portfolio continues to
grow steadily. Coming into the 2004/05
academic year it stood at 25,073 bed
spaces across 28 cities in the UK, with a
further 1,246 operated on behalf of Morley
following our sale of four assets, making
a total of 26,319 beds completed and
managed. This portfolio has again been
independently valued by King Sturge and
CBRE and, as at 31 December 2004,
stood at £1.0 billion, up from £788 million
a year earlier. 
In valuing our portfolio for 2004, our
valuers have had the beneﬁt of increased
transactional evidence in our sector. Our
joint ventures with Lehman Brothers to
develop student villages and with GIC
Real Estate to fully leverage development
opportunities in London and Edinburgh
(closed post-year end) provide powerful
evidence of stabilised initial yields for
direct let properties falling in the 6.65% to
7.25% range. Furthermore, our £49.35
million disposal of properties subject to
nominations agreements during the year
provided a benchmark for that type of
asset at substantially below the 6%
threshold, at 5.77%. It is clear that these
transactions are important in the
development of our ﬁnancing strategy
and we are exploring ways to build
on these foundations during 2005
and beyond. 
Taking into account the above
benchmarks, the average initial yield
across our investment portfolio hardened
marginally to 6.56%, although this masks
a continued shift in portfolio mix towards
higher yielding direct let assets, further
accentuated through the disposal during
the year of lower yielding assets. Student
occupier demand for our properties
remains extremely strong and, against
this backdrop of compelling market
dynamics, our average initial yield looks
increasingly attractive relative to the
broader market, where the IPD initial yield
narrowed considerably from 6.55% as of
December 2003 to 5.86% as at
December 2004.
Importantly, an increasing proportion of
our direct let portfolio has now stabilised
in terms of its earnings potential and, as a
result, strong rental growth has begun to
translate into capital growth. In total, the
stabilised student portfolio was revalued
upwards by £20 million, representing
growth of 4% on those assets. Increasing
operational experience of our assets is
also helping in determining appropriate
valuations elsewhere, particularly in our
NHS portfolio which has proven more
management intensive than originally
anticipated. As a result the values of
these and certain other assets were
reduced by some £10 million as part of
the valuation exercise. The Group has not
opened any NHS key worker projects
since 2002 and has no such projects in
its pipeline.
Our development portfolio
In addition to our completed investment
portfolio, the Group continues to beneﬁt
from long term visibility in respect of its
development pipeline. In total the Group
has secured a further 10,436 beds for
development and delivery in future years,
of which 4,677 beds will be delivered for
the 2005/06 academic year, including
assets held in joint ventures. These
assets, the development of which is fully
funded, have been independently valued
at £475 million, on the basis that they are
Annual Report 2004 15
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 15 completed, implying future development
uplifts from these assets of £53 million in
total (48 pence per share). 
Managing our development activity within
appropriate ﬁnancial parameters remains
critical to our business model. The 5,104
beds delivered during 2004 were
completed at an average revaluation uplift
on cost to our development division of
25.3%, slightly in excess of our target
level. Looking forward, I anticipate a small
element of inﬂationary pressure on these
margins but still expect UNITE to be able
to develop economically, with the market
level of our returns evidenced by the
co-investment commitment of our joint
venture partners.
In total, 1,553 beds in development are
being built out through joint venture
arrangements, under which a proportion
of the equity required is provided by third
parties and, consequently, to whom an
element of return also accrues.
Financing
The capital structure of the business has
evolved signiﬁcantly during 2004. The
portfolio disposal to Morley and our
development joint ventures with Lehman
Brothers and GIC Real Estate have
broadened our range of capital sources.
Importantly, these transactions have been
undertaken in a manner which is
consistent with the Group’s broader
strategy:
Under the terms of our property
investment joint ventures, UNITE
retains a signiﬁcant equity interest and
remains responsible for all
development, module supply and
property management activities, for
which it receives fees. Furthermore, the
remit of these joint ventures is clearly
deﬁned and discernible from our
broader wholly on-balance sheet
activity. 
Under the terms of our portfolio
disposal to Morley, UNITE retains full
management responsibility whilst
passing through the ﬁnancial beneﬁts
of the associated nominations
agreements into an underlying lease.
As well as receiving a fee for its
management services, UNITE has also
retained the beneﬁt of any future
upwards rent reviews in excess of the
base indexation. As with the joint
ventures, the assets subject to sale
were carefully selected and clearly
distinct from our retained investment
portfolio. The four assets sold
represented all of our assets subject to
student nominations agreements, other
than those contained within our 2002
securitisation vehicle, at the time of 
the sale.
Notwithstanding the above initiatives,
UNITE remains a signiﬁcant borrower. In
total the Group now has some £1.0 billion
of investment and development facilities
available to it, of which £771 million were
drawn as at 31 December 2004. We have
continued to evolve our debt facilities
during 2004 and, in particular, we were
successful in arranging a fully
underwritten £250 million facility with
Royal Bank of Scotland, both to ﬁnance
those assets completing in 2004 and also
to reﬁnance the ﬁrst of our earlier
"warehouse" facilities. This seven year
ﬂoating rate facility was subsequently fully
securitised via a bond issue and, as a
result, considerable banking market
capacity has now been freed up for the
Group. The seven year ﬂoating rate
nature of this facility makes it
considerably more ﬂexible than our earlier
ﬁxed rate issue.
Interest rate hedging remains a critical
element of the ﬁnancing strategy and we
have continued to use a ﬂexible
approach, based predominantly around
the use of interest rate swaps, to hedge
our exposure in this area. As at 31
December 2004, 89% of our investment
borrowings were either at ﬁxed rate or
hedged via the use of swaps for an
average duration of 13 years.
Our cost of borrowing, taking into
account the above changes to our
debt ﬁnancing, stands at 6.6%.
Group Finance Director’s report
16   Annual Report 2004
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 16 Operating Portfolio 
Overall, net debt increased to £731
million during 2004 reﬂecting the
increased borrowing to fund our
development programme, net of the
proceeds from our portfolio disposal. 
Year end gearing stood at 198%, up from
182% a year earlier but in line with the
level of gearing reported as at 30 June
2004 (199%). The Group will continue to
manage its levels of gearing through
selective and clearly deﬁned asset
disposals and joint ventures.
Proﬁt and loss account
The introduction of joint venture initiatives
and portfolio disposals, coupled with the
selling of some non core elements of
larger development sites being built out
by the Group, has introduced a level of
complexity to the Group’s proﬁt and loss
account. Nonetheless, the underlying
performance of these different aspects of
the business is clearly identiﬁable. 
Investment activities
The ﬁnancial returns generated from our
investment portfolio remain the most
signiﬁcant element of our proﬁt and loss
account. Turnover derived from rental
income increased by 39% to £66.8 million
from £48.1 million for 2003, predominantly
reﬂecting the increased number of beds
within the portfolio but also the
encouraging like-for-like revenue growth
(6.8% between academic years 2003/04
and 2004/05). 
At the operating proﬁt level, growth was
even more impressive due to the
additional beneﬁts of scale economies
continuing to emerge. Operating proﬁts
from the portfolio increased 41% to £41.0
million from £29.1 million in 2003 and our
operating margin (adjusted for the lease
cost relating to the Morley portfolio)
increased to 62.1% from 60.5% for 2003.
We expect continued asset stabilisation,
like-for-like revenue growth and scale
economies to contribute to a continued
increase in margin over the medium term.
The interest costs of borrowings secured
against the completed portfolio increased
by 47% in 2004 to £37.0 million. This
reﬂects the 40 percentage point increase
in the average level of gearing between
2003 and 2004. Despite this increased
leverage, portfolio interest cover was
largely maintained at 1.11 times (2003:
1.15 times). 
Taking the above into account, portfolio
proﬁt increased marginally to £4.0 million
from £3.9 million in 2003.
Other activities
Outside of the rental activities outlined
above, the Group also undertook a
number of other activities. With the
formation of the Student Village Joint
Venture, development fees and turnover
relating to the supply of modules has been
recognised through the Group proﬁt and
loss account. In addition, the Group made
two disposals of non core elements of 
larger development sites during the year.
Taken together, these non rental activities
contributed £7.8 million of turnover, 
and £1.2 million of proﬁt before 
interest and tax. 
Group Finance Director’s report
Annual Report 2004 17
Rank City 2002 2003 2004 2005 Total No. of
+ Prior Properties
1 Bristol 1,957 716 176 233 3,082 16
2 Liverpool 972 1,209 651 - 2,832 9
3 London 1,556 158 459 391 2,564 14
4 Shefﬁeld 1,203 - - 1,162 2,365 4
5 Manchester 2,345 - - - 2,345 9
6 Glasgow 408 660 - 493 1,561 3
7 Portsmouth 676 726 - - 1,402 3
8 Aberdeen 598 703 - - 1,301 4
9 Cardiff - 253 190 835 1,278 3
10 Leeds - 563 498 190 1,251 3
11 Plymouth 336 - 765 - 1,101 5
12 Birmingham 175 - 575 347 1,097 3
13 Leicester - 369 652 - 1,021 3
14 Southampton - 431 560 - 991 2
15 Newcastle 876 - - - 876 4
16 Preston 424 438 - - 862 2
17 Nottingham 301 - - 507 808 2
18 Loughborough 378 105 262 - 745 3
19 Bath 423 - 316 - 739 5
20 Huddersﬁeld 627 - - - 627 2
21 Bournemouth - - - 519 519 1
22 Dundee 400 - - - 400 2
23 Stoke 345 - - - 345 1
24 Coventry 253 - - - 253 2
25 Exeter 218 - - - 218 1
26 Swindon 143 - - - 143 1
27 Aberystwyth 110 - - - 110 1
28 Edinburgh - 106 - - 106 1
29 Luton 54 - - - 54 1
14,778 6,437 5,104 4,677 30,996 110
Number of Beds
Note: Includes beds under management
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 17 These initiatives will form an ongoing
component of the Group’s ﬁnancing
strategy and, as such, these revenue
streams will continue in the future.
Other proﬁt and loss
account items
As in previous years, there are a number
of other costs expensed through the
Group’s proﬁt and loss account:
Pre-contract development costs fell to
£2.4 million from £3.7 million in the
previous year, reﬂecting the increased
focus of resource on adding value to
secured post-contract projects. 
Corporate costs were contained at 
£3.9 million versus £4.0 million in 2003. 
A ﬁnal amortisation charge of £2.5
million in relation to “development
pipeline” goodwill arising at the time of
the Unilodge and Peabody UNITE
acquisitions was also made during the
year. This element of goodwill has now
been fully amortised and the remaining
balance sheet goodwill of £2.5 million
relates to long term synergy beneﬁts
associated with the Unilodge acquisition.
Taking all of the above into account, the
Group reported a basic loss per share of
3.5p, representing a substantial
improvement on the 10.0p reported for
2003. It is proposed that the full dividend
for the year be maintained at a total level
of 2.5p per share.
Group Finance Director’s report
18   Annual Report 2004
International Financial
Reporting Standards
In common with all other UK quoted
companies, our results for 2005 will be
prepared under International Financial
Reporting Standards (“IFRS”).
Comparative ﬁgures for 2004 will also 
be restated for consistency.
IFRS introduces a number of important
changes to both existing accounting
policies and to disclosure. The main
items affecting UNITE are as follows:
Developments in progress will be
carried at cost with all the revaluation
gain recognised at scheme
completion. This compares with our
current policy of recognising a
proportion of the anticipated
revaluation gain during development
with the balance recognised at
completion.
Under IFRS full provision will be made
for deferred taxation including
providing for the capital gains tax
which would become payable if the
Group’s properties were sold at their
revalued amounts. Under current UK
accounting standards this tax is not
provided for if there is no contractural
commitment to sell the properties.
In order to give investors adequate
opportunity to fully consider the impact of
IFRS, we will be restating these 2004
results in accordance with the new
standards and releasing those results
later this year in advance of any reporting
of 2005 performance.
Looking forward
In operating terms, our portfolio is
growing and an increased proportion of it
is becoming stabilised in terms of net
rent. I would expect this, in the near term,
to beneﬁt both capital values in our
portfolio and operating margins.
From a capital structure perspective, I
expect UNITE to build on the important
strides made in 2004 through the
establishment of joint ventures and our
portfolio disposal. The weight of
institutional capital seeking property
investment appears to be being sustained
and the likely, but delayed, introduction of
UK Real Estate Investment Trusts in due
course should add an interesting retail
investor dynamic. In ﬁnance terms, 2005
promises to be another important year
for UNITE.
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 18 The time of your life
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 19 Living our values
Our people
Values underpin everything we do, and
determine how we approach our
customers and colleagues, how we make
decisions and how we carry out the
decisions we make. As UNITE continues
to grow larger our values help us to be
consistent in how we work together, how
we achieve success and how we create
an environment for everyone to succeed.
Caring
Caring about getting things right for
Customers, Employees and
Shareholders, and being able to stay in
the horns of the dilemma to deliver the
best possible outcomes.
Taking the lead
Creative in our thinking and conﬁdent in
our delivery. We strive to learn from all we
do, to build the capability of our people
and through them the success of UNITE.
Working Together
Clear in our objectives and enjoying how
we get there. Valuing and respecting
each other’s contribution, and exploring
the best way to achieve results together.
Since the introduction of our new values,
we have seen outstanding examples of
employees living the values – going the
extra mile, challenging the status quo,
placing greater emphasis on the longer-
term perspective, broadening their view
beyond their part of the business and
being more willing to take calculated risks
with Customer and Shareholder gain in
mind. Over the year employee satisfaction
survey scores are up 24%, customer
satisfaction is up 9% and employee
turnover is down nearly 20%, in a year in
which we opened 5,104 new rooms.
UNITE’s values give a clear signal about
what is important in our business and
how our success has been and will
continue to be built. They give one clear
story to candidates, suppliers, customers
and colleagues about our expectations,
standards and purpose. They also
underline our commitment to operate
ethically and with integrity in line with our
corporate social responsibility and
corporate governance policies. 
Our strategy of delivering for our Customers, People and
Shareholders led UNITE to research what makes working
at UNITE so unique. Identifying our three values enables
us to encourage more of these behaviours and
approaches, which in turn is leading to improved individual
and business performance.
“There is a beneﬁt to having something to
subscribe to, aligning everyone, and the
processes, across the business. The effect
it will have is that it will be linked to the
customer, make things more simple for us,
improve our reputation, reduce our staff
turnover, bring repeat business, increase
employee satisfaction, increase our pride,
and give us the feeling that we can
change something”
Quote from UNITE Values Focus Group, 10 March 2004
20   Annual Report 2004
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 20 Health and Safety
UNITE has again achieved an excellent
health and safety performance
throughout 2004.
There have been two new posts created
within Health and Safety. The ﬁrst is a
dedicated Safety Professional working
within the Accommodation Services
Division. This gives increased support to
the operational arm.
The second appointment has been
created within the Group Services
Division. This position has been
developed through investment in an
existing staff member, which has afforded
UNITE the opportunity to recognise the
commitment and effort of a staff member.
This further supports UNITE’s commitment
to recognise individual values and
develop UNITE employees through our
extensive training programme.
Our Accommodation Services Division
has developed a National Training
Framework, an individually guided training
programme for all new employees.
Our co-operation and close working
relationship with the Fire Brigade has
jointly allowed the development of a ﬁre
procedure that has reduced the number
of occasions in which Brigades attend our
properties for unwanted ﬁre alarms.
Our partnering arrangement with
developers continues to show excellent
health and safety performance. UNITE
has chosen to undertake independent
Annual Report 2004 21
Our people
inspections on our partnering contracts
which has proven to be mutually
beneﬁcial to all.
A great deal has been achieved in 2004.
Surveys have been undertaken within our
modular construction division to ensure
compliance with impending changes to
the Noise at Work Regulations.
To build upon these positive results,
UNITE continues to seek continual
improvement in the area of Health and
Safety. 2005 has started very
optimistically and we will persist with the
same degree of determination to making
Health and Safety a success, as we do in
all other areas of our business.
Kyriakos Stergiou, Accommodation Manager, Londonderry House, Birmingham
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 21 Market insight
Market insight
Participation in university
2004 was another year of growth for the
UK higher education industry. The
Universities and Colleges Admissions
Service (UCAS) conﬁrmed that the
number of full-time students accepted by
UK universities and colleges for the
2004/05 academic year was up on the
previous year by 0.9% (3,237). A total of
377,544 applicants were accepted onto
undergraduate courses compared with
374,307 in 2003. In particular the number
of applicants under 21 accepted by
higher education courses has risen by
1.3% (3,635) compared with 2003, partly
driven by an increase in participation on
foundation courses. Interestingly, 7%
more women were accepted into
university than men in 2004.
Overseas over here
The big story in student accommodation
during 2004 was the predicted rise in
overseas students. The UK has the
second largest market share of overseas
students in the world and recent history
has demonstrated the rapid rise in
overseas student numbers. Between
1997/8 and 2002/3 the level of non-EU
international students at UK universities
increased by some 58% - from 117,000 to
185,000 (source: Universities UK). More
recently, a report from the British Council
highlighted the potential for a tripling of
the number of international students
studying in the UK over the next 15 years.
Already, UCAS ﬁgures show the number
of students from EU countries coming to
study in the UK rose signiﬁcantly in 2004
– up 24.4% (2,370). Within this total, the
new EU countries (particularly Cyprus,
Czech Republic, Hungary and Poland)
contributed 1,377 students – up 131.8%
on the previous year.
Student numbers grew for the thirtieth consecutive year.
Growth has been seen both in the number of UK students,
with more students choosing to study post A-Levels, and also
in the number of overseas students. The British Council
has highlighted the potential for a tripling of the number of
international students studying in the UK over the next 15 years.
22   Annual Report 2004
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 22 Market insight
What do overseas students
think of our higher education
experience in the UK?
A large-scale survey published in late
2004 by UKCOSA, the Council for
International Education, highlighted
overseas students’ concerns about
aspects such as pre-arrival
accommodation information and
ﬁnances. On average a quarter of
overseas students, according to the
UKCOSA research, are not offered
university accommodation places in their
ﬁrst year. Furthermore, around a third of
overseas undergraduate students require
accommodation to cover vacations as
well as term time. Addressing these
concerns, particularly via carefully
targeted marketing and pre-arrival
information, represents another
opportunity for UNITE to meet the needs
of its student and HE institutional
customers.
Student Funding
The far-reaching changes in student
funding, brought about by the launch of
the Higher Education Bill at the start of
2004, has evolved during the course of
the year, many universities setting out
their position both on the course fees they
will charge – up to a maximum of £3,000 -
and the bursary incentives they will offer.
Either way, universities now view students
as customers, as do the students who
demand the commensurate service and
value for money. It is predicted that UK
Universities will become signiﬁcantly more
competitive, both for the acquisition of
new students, the recruitment of world-
class staff and in the reputation, branding
and facilities that they can offer
customers. In return, many universities will
be attracting the highest rewards, both in
terms of minds and wallets of their
customers.
Higher Education – Recent milestones:
1990: student loans introduced
for the ﬁrst time
1998: Loans continue, grants
abolished. Main source of income
becomes loans, fees means-tested.
Those who pay full fees pay £1,200 pa.
2004 Higher Education Act. Grants
reintroduced and means tested.
Maximum grant available is £1,000
2006: Grants will be increased to a
maximum of £1,500. Variable fees
introduced up to £3,000 per year.
Government grants could be worth up
to £2,700. Universities are obliged to
supplement grants with a minimum
bursary of £300. Up front fees,
repayable after graduation, will be
exactly the same at £3,000 per year. 
Students may have ‘stealth’ debts
during their university years.
Graduating with minimum debt 
of £9,000.
The 2006 changes are only ﬁxed 
until 2010, when it is expected that 
an upward trend in university fees 
will emerge.
Implications for student
accommodation
The 2005 Student Experience Report,
commissioned annually by UNITE
highlights the key themes of student life.
Students spend the highest proportion of
their income on accommodation, as do
most adults. 
The report highlights that going to
university is becoming a fact of life for
many young people as is dealing with
debt. Despite these rising debts, the
numbers of students who choose to save
money by remaining in the family home
whilst attending higher education has not
increased signiﬁcantly over the ﬁve years
of the research. In fact, the survey reveals
that almost two thirds of students believe
that those living at home do not gain the
full beneﬁt of being a student.
Annual Report 2004 23
37 per cent of students
claim that going to
university was a 'natural
progression from college' -
a twenty per cent increase
over four years.
Source: UNITE 2005 Student Experience Report
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 23 Geoffrey Maddrell,
Chairman
Aged 68. Geoffrey has had a long-standing
and successful involvement in
the strategic direction and expansion of
businesses, with a particular interest in
building-related activities, initially on the
Board of Bowater where he was
responsible for developing their building
product business. He is Chairman of a
leading housebuilder, Westbury plc, and of
BuildStore Limited, which serves the self-
build market: in this sector he is also on the
Board of Goldcrest Homes plc.
Geoffrey is also a Civil Service
Commissioner; and Chairman of the Ivory
& Sime ISIS Trust Plc. and Director of LDV
Limited, the van specialist following a
successful reﬁnancing.
Nicholas Porter,
Chief Executive Ofﬁcer
Aged 35. Nicholas is the founder of
UNITE and has overall operational
responsibility for the Group. He is
Chairman of its Operations Board and
was instrumental in implementing its
revised divisional structure. Nicholas is
also responsible for the development of
Group strategy, and, with his in-depth
knowledge of the higher education sector,
he continues to steer the business
development and communications of the
Group. He also spearheads key issues at
Government level. Nicholas is driving
UNITE’s strategy to be ﬁrst choice for
customers, people and shareholders.
Mark Allan,
Group Finance Director
Aged 32. Mark joined UNITE in 1999,
having previously qualiﬁed as a Chartered
Accountant with KPMG. Prior to his
appointment as Group Finance Director in
November 2003, Mark held various
positions within the Group including those
of Corporate Finance Director and
Commercial Director. Mark now has
overall responsibility for the Group's
ﬁnances, including portfolio and valuation
strategies, as well as its e-business
infrastructure. He continues to oversee
UNITE’s divisional ﬁnance platform,
ensuring that each Division has in place
robust ﬁnancial controls and dedicated
ﬁnance and accounting teams. 
24   Annual Report 2004
The Board of Directors
The Board of Directors
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 24 Annual Report 2004 25
Andrew Lee, 
Human Resources Director
Aged 36. Andrew has previously worked
in Europe and the US with companies
including Marks and Spencer, Marriott,
Mckinsey, BAA, Whitbread and
PricewaterhouseCoopers. 
He holds a number of post-graduate
qualiﬁcations, including a doctorate in
Organisational Change. Andrew’s focus
continues to be on leadership and
development for all UNITE employees,
ensuring that our objectives and
measurements are clear and aligned for
individuals, teams, divisions and the
group and that all colleagues are
provided with a challenging, meaningful
and rewarding career. 
Nigel Hall, Non-Executive
Director and Chairman of
Audit Committee
Aged 49. Nigel, who qualiﬁed as a
Chartered Accountant in 1980 with Price
Waterhouse, was Group Finance Director
of Arcadia Group plc (formerly The Burton
Group plc) until February 2003. He joined
the Burton Group in 1984 and was
appointed to its Board in 1997, becoming
Group Finance Director in November of
that year. Nigel is a Non-Executive
Director of Pinewood Shepperton plc,
Countrywide Farmers plc and Christie-
Tyler Holdings Limited. He is Chairman of
BRC Trading Limited, the trading arm of
the British Retail Consortium, and is a
trustee of the Textile Industry Children’s
Trust. With his considerable experience of
ﬁnance and operations in a complex
multi-site retail business, Nigel provides
valuable experience to the Board and
strong leadership of the Audit Committee.
Stuart Beevor,
Non-Executive Director
Aged 48, Stuart is Managing Director of
Grosvenor Fund Management Limited
and a member of the Board of Grosvenor
Group Limited, the international property
group, which he joined in 2002. Prior to
joining Grosvenor, he was Managing
Director at Legal and General Property
Limited, having previously held a number
of roles dealing with development,
investment, property management and
unitised funds at Norwich Union. Stuart is
a Fellow of The Royal Institution of
Chartered Surveyors, a Trustee of the
Investment Property Forum Educational
Trust and a representative of the
Investment Property Forum and the RICS
on the UK REIT industry working group.
He is past Chairman of the Investment
Property Forum, a past member of the
Property Advisory Group of the Ofﬁce of
the Deputy Prime Minister and, previously,
a member of the external examination
board of the College of Estate
Management.
The Board of Directors
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 25 The Directors present their annual report
and audited ﬁnancial statements for the
year ended 31 December 2004.
Principal Activities
The principal activities of the Group
during the year were the development,
management and rental of student
residential accommodation in the United
Kingdom. Details of the Company’s
principal subsidiaries are set out on 
page 51.
Operating and Financial
Reviews
Reviews of the Group’s operations and
ﬁnancial affairs are set out on pages 9 to
18 of this report.
Proﬁt and Dividends
The Group loss for the year attributable to
shareholders amounted to £3.8 million
(2003: loss of £10.8 million). The
Directors recommend the payment of a
ﬁnal dividend of 1.67p per ordinary share
(2003: 1.67p per ordinary share) (making
a total dividend for the year of 2.5p per
share (2003: 2.5p per share), leaving a
retained loss of £6.6 million to be
transferred to reserves (2003: retained
loss of £13.5 million). Subject to approval
at the annual general meeting of the
Company which has been convened for 5
May 2005 (the "Annual General Meeting"), 
the recommended ﬁnal dividend will be
payable on 13 May 2005 to shareholders
on the register at close of business on 15
April 2005.
Directors
Each of Messrs G K Maddrell, N P Hall, N
A Porter, M C Allan and Dr A Lee served
as Directors throughout the year. Mr S R
H Beevor was appointed as an additional
Non-Executive Director on 1 March 2004,
on which date Baroness Prashar
stepped-down from the Board as a Non-
Executive Director having served her
three year term of appointment. Mr
Maddrell acted as Chairman of the Board
throughout the period.
Messrs G K Maddrell and M C Allan 
retire by rotation but offer themselves for
re-election at the AGM. Brief biographies
of all the Directors, including those
standing for re-election, are set out on
pages 24 to 25.
Those biographies describe the reasons
why those of the Directors standing for re-
election should be re-elected. In that
respect, it should be noted that, by July
2005, Mr Maddrell will have completed
two three-year terms as Chairman of the
Company. Following a review by the
Board of Mr Maddrell’s performance, it
was decided to extend the term of his
appointment for a further three years.
26   Annual Report 2004
Directors’ report
Directors’ report
for the year ended 31 December 2004
1 Mr Porter’s interests include his interest in
(a) 1,146,000 ordinary shares held by the
trustees of The Porter Family Discretionary
Trust, the beneﬁciaries of which are his two
children; (b) 253,140 ordinary shares held by
the trustees of the Jane Louise Discretionary
Settlement Trust, the beneﬁciaries of which
are his two children; (c) 125,000 ordinary
shares held by the trustees of The Redshoes
Charitable Trust, one of whom is Mr Porter;
and 50,000 ordinary shares held by Uniaid
Foundation, of which Mr Porter is a trustee.
Ordinary shares Ordinary shares
of 25p each of 25p each
31 December 2004 31 December 2003
N A Porter  1 13,374,367 14,674,367
M C Allan 28,825 -
A Lee 23,810 -
G K Maddrell  2 278,487 278,487           
N P Hall 9,849 5,128
S R H Beevor - -
Directors’ Interests
The interests of the Directors and their families in the ordinary shares of the Company
are set out below. Details of Directors’ share options are set out in the Directors’
remuneration report.
None of the Directors has a beneﬁcial interest in the shares of any other Group
company. Between 31 December 2004 and 16 February 2005, there have been no
changes in the Directors’ interests in shares.
2 Mr Maddrell’s interests include his interest
in 12,250 ordinary shares held by his wife,
Winifred Maddrell, and 191,237 ordinary
shares held by the trustees of the Geoffrey
Maddrell Jersey Trust, the beneﬁciaries of
which include himself, his wife and his three
children.
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 26 Annual Report 2004 27
Changes in Share Capital
During the year, a total of 6,152 ordinary
shares of 25p each were allotted and
issued pursuant to the exercise of options
granted under The UNITE Group plc
Savings Related Share Option Scheme
(2,366 at 155.5p per share and 3,786 at
120.5p per share). In addition, a total of
152,000 ordinary shares were allotted and
issued pursuant to the exercise of options
granted under The UNITE Group plc
Approved Company Share Option
Scheme 1999 (20,000 at a price of
102.5p per share and 132,000 at a price
of 169p per share), whilst a further
476,392 shares were allotted and issued
pursuant to the exercise of options
granted under The UNITE Group plc
Unapproved Share Option Scheme
(135,500 at 107
1
/2p per share, 308,392 at
146
1
/2 p per share and 32,500 at 176
1
/2 p
per share).
On 2 August 2004 the Company also
allotted and issued 2,453,219 ordinary
shares of 25p each pursuant to the
exercise of conversion rights attaching to
£4,259,034 in nominal value of the
Company’s 8% Convertable Unsecured
Loan Stock 2004 (the "Loan Stock") at a
conversion price of 173.61p per share. All
of the Loan Stock has now either been
converted or redeemed.
Substantial Interests in the
Share Capital of the Company
As at 16 February 2005, those
shareholders, other than Directors, who
had notiﬁed the Company of a
disclosable interest amounting to 3% or
more of the ordinary share capital of the
Company were as follows:
Donations
The Company made no political
donations during the course of the year
but made charitable donations of £25,408
to Uniaid Foundation (2003: £50,000).
During 2004, UNITE also donated
eighteen accommodation bursaries to
Uniaid Foundation across the UK,
equating to £21,000. 
In addition, the Company also made
donations to a number of charities
through its "matched funding" policy.
Pursuant to that policy, the Company
agrees, subject to certain conditions and
limits, to match the donations made to
charities by employees through fund
raising activities of their own. During the
year, those "matched funding" donations
of the Company amounted in aggregate
to £4,253.
Policy and Practice on
Payment of Creditors
During the year the Company maintained
its policy of agreeing and abiding by
supplier payment terms. The Group has
not followed any recognised code for
payment practice. As at 31 December
2004 the Group’s trade creditors were
equivalent to 30 days’ purchases (2003:
30 days). The Company does not have
any trade creditors (2003: nil).
Health and Safety
The Group’s policy is to provide and
maintain safe and healthy working
conditions, equipment and systems of
work for all its employees and to 
provide such information, training and
supervision as they need for this purpose.
Further details of the Group’s Health and
Safety Management System are set out
on page 21.
Employment Policies
The Company encourages employee
involvement and consultation and places
emphasis on keeping its employees
informed of the Group’s activities and
ﬁnancial performance. The UNITE Group
plc Approved Company Share Option
Scheme, The UNITE Group plc
Unapproved Share Option Scheme and
The UNITE Group plc Savings-Related
Share Option Scheme are intended to
help develop employees’ interest in the
Company’s performance.
The Company operates a non-
discriminatory employment policy. Full
and fair consideration is given to
applicants for employment from the
disabled where they have the appropriate
skills and abilities and to the continued
employment of staff who become
disabled. The Company places particular
emphasis on and encourages the
continuous development and training of
its employees and the provision of equal
opportunities for the training and career
development of disabled employees.
Directors’ report
Shareholder Percentage of
share capital
Fidelity International 8.05%
Limited/FRM Corp Ltd
Schroder Investment 7.05%
Management Ltd
Stichting Pensioenfonds ABP 4.47%
Legal & General Investment 4.00%
Management Ltd
Scottish Widows 3.06%
Investment Partnership Ltd
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 27 28   Annual Report 2004
Directors’ report
The Group has always recognised
the importance of protecting and
enhancing the environment in which
it operates and is fully committed to
implementing and monitoring
policies reﬂecting the statement set
out below.
In all aspects of its business, the
Group considers the impact of its
activities on the environment. It is
concerned for the environmental
well being of the communities in
which it invests and complies
with all relevant environmental
legislation and regulations. It
strives to protect the health and
safety of its employees and
promotes environmental
awareness amongst them, its
customers, contractors, tenants
and suppliers.
The above statement forms the
framework of the Group’s
environmental policy. The policy is
implemented through:
Observing all local environmental 
control policies and relevant 
environmental regulations.
Reviewing all proposed 
developments to assess the 
presence of any contamination 
and the means of remediation,
if required.
Inspecting all land and buildings 
owned by the Group to ascertain 
whether environmental damage 
has occurred or is at risk of 
occurring.
Informing tenants of good energy 
management practices.
In building, design and construction
the following measures are applied:
Re-developing brown-ﬁeld sites 
where practicable.
Striving to eliminate the use of 
materials containing CFC and 
HCFC as alternatives become 
available.
Conserving energy through 
improved insulation and the use 
of energy efﬁcient heating and 
lighting systems.
Specifying, where practicable, 
that building materials and 
furnishings come from 
sustainable sources.
Applying effective waste 
management procedures to 
ensure that developments do not 
cause an increase in air, water or 
ground pollution.
Enhancing landscaping and 
external aspects in harmony with 
existing surroundings.
Adopting best health and safety 
at work practices.
Limiting nuisance from noise, 
dust and hazards.
Endeavouring to limit waste 
generation, discharges and 
emissions and handling wastes 
in a responsible manner.
Adopting measures to protect 
workers, visitors and the public 
from exposure to unacceptable 
risks and hazards.
In its internal operations, the
Company will:
Be responsive to public attitudes 
and concerns.
Ensure all building, maintenance 
and service operations are 
optimised to save energy, water 
and waste.
Return used materials for 
recycling.
Ensure that company vehicles 
are maintained regularly to 
reduce exhaust emissions and 
economise on fuel usage.
Maintain a safe and healthy 
working environment for the well 
being of employees.
Mr N A Porter, Chief Executive Ofﬁcer
of the Group, has responsibility for
ensuring that the policy described
above is observed. The Board, as a
whole, regularly reviews
implementation of such policy and
considers any amendments thought
necessary or desirable.
Initiatives implemented include the
introduction of waste re-cycling
schemes at the Group’s ofﬁce
locations and at its accommodation
blocks and the adoption of a UNITE
Code of Ethics. The basic tenet of
the Code (the full text of which can
be found on the Company’s web-
site), is that the Group seeks at all
times to conduct its business in
accordance with, and to ensure that
each of its employees and directors
adheres to, the highest standards of
business and personal ethics. Since
the year-end, an independent
"whistle-blowing" channel has also
been established that enables
employees to report any incidents of
improper or illegal conduct of which
they may become aware whilst, if
they wish, maintaining their
anonymity.
Whilst the Company has not, as yet,
implemented a Group wide
environmental management system,
it has undertaken to review its
systems during the current year, with
a view to a full environmental
management system being
implemented during 2006.
Environmental and Ethical Policies
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 28 Auditors
In accordance with Section 384 of the
Companies Act 1985, a resolution for the
re-appointment of KPMG Audit Plc as
auditors of the Company is to be
proposed at the forthcoming Annual
General Meeting.
Annual General Meeting
The Annual General Meeting of the
Company will be held at The Horace
Cutler Room, London Marriott Hotel,
County Hall, Westminster Bridge Road,
London SE1 7PB at 9.30 a.m. on 5 May
2005. Formal notice of the meeting is
given on pages 62 to 63.
In addition to the ordinary business of the
meeting, an ordinary resolution will be
proposed to authorise the Directors to
allot up to £9,283,308 in nominal value of
the authorised but unissued share capital
of the Company (representing one third of
the issued share capital of the Company
as at 16 March 2005). The Board has no
current intention of exercising that
authority. A special resolution will also be
proposed to dis-apply statutory pre-
emption rights in respect of the allotment
of shares in connection with any rights
issue or other issue by way of rights and
otherwise up to an aggregate nominal
amount of £1,392,496 (representing ﬁve
per cent of the issued share capital of the
Company as at 16 March 2005). Again
the Board has no current intention of
exercising that authority.
By order of the Board
A D Reid
Secretary
16 March 2005
Annual Report 2004 29
Directors’ report
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 29 During the course of the year, the
Company complied (except as
speciﬁcally set out below), with the
principles of best practice set out in the
Combined Code issued by the Financial
Reporting Council in July 2003 (the
"Combined Code"). 
Board of Directors
The Company’s corporate governance
procedures provide that the full Board of
Directors shall meet at least six times a
year. During 2004, there were eight
meetings of the full Board, all of which
were attended by each of the Directors
then appointed, other than two meetings,
one of which Baroness Prashar was
unable to attend, whilst Mr S R H Beevor
was also unable to attend one meeting.
The Board receives regular reports from
each of the Group’s operating divisions
but itself retains full and effective control
of the Group’s activities, with a formal
schedule of matters speciﬁcally reserved
for decision by the full Board. In particular,
the full Board sets the strategic
objectives, business plan and annual
budgets for the Group, with major
investment decisions also requiring Board
approval. However, operational
responsibility is delegated to the Group’s
Operations Board, which comprises the
Executive Directors from the full Board,
together with representatives from each of
the Group’s operating divisions (namely
development, accommodation services
and modular construction). 
Terms of reference have been set by the
Board for its various committees and for
the Chairman and the Chief Executive
Ofﬁcer. The terms of reference for the
Chairman and the Chief Executive are
such as to clearly establish the division of
responsibility between the two roles. In
addition, all Directors have access to the
advice and services of the Company
Secretary, whilst procedures are in place
allowing for individual Directors to take
independent legal advice. A programme
for the training of Directors has been put
in place.
The current Board complement consists
of three Executive Directors, namely a
Chief Executive Ofﬁcer (Mr N A Porter), a
Group Finance Director (Mr M C Allan)
and an HR Director (Dr A Lee), as well as
the Chairman (Mr G K Maddrell) and two
Non-Executive Directors (Messrs N P Hall
and S R H Beevor). Mr Beevor was
appointed as an additional Non-Executive
Director on 1 March 2004, on which date
Baroness Prashar stepped-down as a
Non-Executive Director following the
expiration of her three year term of
appointment.
As a smaller company (i.e. one that is
outside the FTSE 350), the Company
meets the requirement of the Combined
Code that it should have at least two
Non-Executive Directors. However, in view
of the size of the Board, no Director has
been designated as senior independent
non-executive director and, in that
respect, the Company does not comply
with the Combined Code. However, the
Company’s Non-Executive Directors are,
on request, available as a conduit of
communication to the Board. It is
anticipated that a further Non-Executive
Director will be appointed during the
course of the current year.
Each of the Non-Executive Directors is
independent of management and free
from any personal, business or other
relationship with the Group, save for the
receipt of Directors’ fees and interests in
shares of the Company.
Each of the Executive Directors has a
written service contract, whilst each of the
Non-Executive Directors has a formal
letter of engagement. Executive Directors
have rolling contracts of employment with
twelve months notice periods, whilst Non-
Executive Directors are appointed by the
full Board for a term not exceeding three
years. The letters of appointment relating
to the Non-Executive Directors are
available for inspection at the Company’s
registered ofﬁce during normal business
hours and for the 15 minutes prior to and
during the Annual General Meeting.
The Board has appointed an Audit
Committee, a Remuneration Committee
and a Nominations Committee. The terms
of reference for each such committee
(which are published on the Company’s
website) are reviewed annually by the
relevant committee, as is the
effectiveness of each such committee.
Set out below are sections describing the
work of the committees in discharging
their respective responsibilities.
Audit Committee
During the year, the Audit Committee
comprised Mr N P Hall, Mr G K Maddrell
and Baroness Prashar (until her
resignation from the Board on 1 March
2004) and Mr S R H Beevor (as from 18
March 2004). Mr Hall acted as Chairman
of the Audit Committee throughout the
year. Mr Hall is a Chartered Accountant
and was, until February 2003, ﬁnance
director of Arcadia Group plc (formerly
The Burton Group plc).
30   Annual Report 2004
Corporate governance
Corporate governance
for the year ended 31 December 2004
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 30 Annual Report 2004 31
Although the principles of best practice
set out in the Combined Code state that
all members of the Audit Committee
should be independent non-executive
directors, it has been agreed, in view of
the overall size of the Board, that Mr G K
Maddrell (being Chairman of the Board)
should, in addition to the Group’s two
independent Non-Executive Directors, sit
on the Audit Committee. As a result, the
Company does not comply with the
Combined Code in respect of the
composition of the Audit Committee.
During the year, the Audit Committee met
on ﬁve occasions, all of which meetings
were attended by each of the then
appointed members, other than one
meeting which Mr S R H Beevor was
unable to attend.
The Audit Committee meets with the
Group Finance Director and with the
external auditors and reviews the annual
accounts and the preliminary and interim
ﬁnancial results announcements prior to
submission to the Board. The Audit
Committee also reviews compliance with
accounting standards, the scope and
extent of the external audit programme
and the appointment, independence and
remuneration of the auditors. The
chairman of the Audit Committee reports
to the Board on matters discussed at
meetings of the Audit Committee. 
During the course of the year, the Audit
Committee reviewed the need for an
internal audit function within the Group.
Following that review, the Board
concluded that, in view of the existing
controls in place (including an
Accommodation Services operational
audit regime) and the size of the Group, a
Group internal audit function was not
required. However, the position is being
kept under review. 
The Audit Committee has established a
formal policy with regard to the
Company’s appointment of the external
audit ﬁrm for the supply of non-audit
services. In addition, the Audit Committee
reviews any potential threat to the
objectivity and independence of the
external auditor, including, in particular,
those potential threats identiﬁed by the
Auditing Practices Board in its
independence guidelines. The Committee
determines and then reports to the Board,
whether or not it is satisﬁed that the
independence of the external auditor is
not jeopardised, taking into account the
external auditor’s own submissions to the
Committee and/or the Board.
During the course of the year, the only
non-audit services provided to the
Group by the external audit ﬁrm related to
tax advice, the implementation of IFRS,
the review of management accounts of
certain subsidiaries as part of a bank
lending due diligence process and a
strategic review of the Group's modular
construction division.
Remuneration Committee
During the year, the Remuneration
Committee comprised Mr G K Maddrell
(who acted as Chairman), Mr N P Hall,
Baroness Prashar (until her resignation
from the Board on 1 March 2004) and Mr
S R H Beevor (as from  18 March 2004).
Although the principles of best practice
set out in the Combined Code state that
all members of the Remuneration
Committee should be independent non-
executive directors, it has been agreed, in
view of the overall size of the Board, that
Mr G K Maddrell (being Chairman of the
Board), should in addition to the Group’s
two independent Non-Executive Directors,
sit on the Remuneration Committee. As a
result, the Company does not comply
with the Combined Code in respect of the
composition of the Remuneration
Committee.
The Committee determines remuneration
policy and advises the Board accordingly.
In particular, the Committee makes
recommendations regarding the terms of
employment of executive directors and
senior managers, including terms of
remuneration, the award of share options
and other incentives. Mr N A Porter is
invited to attend meetings of the
Remuneration Committee but takes no
part in the discussions concerning his
own remuneration and does not attend
those parts of the meetings of the
Committee that consider that issue. 
The Directors’ Remuneration Report is set
out on pages 34 to 37. 
During the course of 2004, four meetings
of the Remuneration Committee were
held all of which were attended by each
of the then current members of the
Committee.
Nominations Committee
The Nominations Committee is chaired by
Mr G K Maddrell. However, the exact
composition of the Committee is variable,
provided that no such meeting has a
majority represented by Executive
Directors. During the course of 2004,
three meetings of the Nominations
Committee were held each of which was
attended by Mr G K Maddrell, Mr N P Hall
and Mr N A Porter.
The Committee is responsible for making
recommendations to the Board on any
appointment or re-appointment to the
Board and at senior executive level. It is
also responsible for ensuring that plans
are in place for an orderly succession of
appointments to the Board and at senior
management level, so as to maintain an
Corporate governance
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 31 appropriate balance of skills and
experience within the Company and on
the Board.
Following determination by the Board that
a new Non-Executive Director should be
appointed, the Nominations Committee
draws-up a personal and professional
proﬁle of the ideal candidate it would like
to see appointed in order that a
recruitment and selection process can be
undertaken. The Committee then
appoints an independent search and
selection agency to approach potential
candidates who it identiﬁes as meeting
the speciﬁcation supplied by the
Nominations Committee. Initial interviews
are conducted by the search agency,
which then compiles a short list of
appropriate candidates to be interviewed
by the Nominations Committee. A
recommendation of a proposed
candidate is then made following those
second round interviews. Following a
recommendation from the Committee for
the appointment of a candidate to the
Board, the Chairman may be requested
by the Board to approach the nominated
candidate to agree terms for the
appointment according to the criteria set
out in the Group’s remuneration policies.
Consideration of the appointment of an
internal candidate to the position of
Executive Director will follow a request
from the Chief Executive to the
Nominations Committee that the
appropriate candidate be considered for
nomination. This will only follow a record
of successful achievement in the
candidate’s current role and the gathering
of data from an independent external
assessment centre that the candidate will
have been asked to attend. At that centre,
the proposed candidate is assessed in
the areas of commercial and strategic
ability, leadership; technical ability; ability
to build peer relations; and values and
behaviours. The results of those
assessments are compared against a
global norm group of highly performing
directors and senior managers. After
gathering the assessment data, the
Nominations Committee interviews the
proposed candidate, following which it
may recommend his or her appointment
to the Board. If the Board accepts the
recommendation of the Committee, it will,
through the Chairman and Chief
Executive, invite the proposed candidate
to join the Board according to terms and
conditions of service agreed by the
Remuneration Committee. That follows an
external benchmarking of remuneration
for the role.
For the appointment of external
candidates to the role of Executive
Director, the process outlined above in
relation to Non-Executive Directors is
followed, with the addition that such
external candidates are, as is the case
with internal candidates, required to
attend an external assessment centre
prior to ﬁnal interviews by the
Nominations Committee.
The process for evaluating the
performance of the Executive Directors
ﬂows from the setting of the overall
business strategy for the Group. Once
agreed by the Board, the Executive
Directors produce divisional strategies
and milestone action plans designed to
deliver the agreed overall strategy. Such
strategies and plans, which are
challenged and may be revised prior to
being ratiﬁed by the Board, then form the
basis of personal objectives that are set
for each of the Executive Directors. The
personal objectives of the Chief Executive
are agreed between him and the
Chairman as part of the annual
Performance Development Programme
("PDP") cycle. The other Executive
Directors agree their objectives with the
Chief Executive, again as part of the PDP
process. Progress in achieving objectives
is monitored at least monthly through one
to one meetings between the Chairman
and the Chief Executive and between the
Chief Executive and the other Executive
Directors. Progress reviews are also
carried out at Board level through the
review of key performance indicators. 
Formal performance measurement is
undertaken through half-year reviews of
progress made against milestones, key
performance indicators and other
personal objectives. The annual PDP
review of performance takes place shortly
after the year-end. That review considers
performance against objectives, including
key performance indicators, and the
Group’s values and behaviours. The key
performance indicators, which include
ﬁnancial performance and customer and
employee satisfaction, also form the basis
of the bonus formulae as set out in the
Remuneration Report. 
The performance of the Non-Executive
Directors is reviewed annually by the
Chairman, whilst the performance of the
Chairman is considered annually by the
Non-Executive Directors (in the absence
of the Chairman), in both cases taking
account of the views of the Executive
Directors. The Chairman and the Non-
Executive Directors (also on an annual
basis) meet to consider the overall
effectiveness of the Board and its
Committees. Those meetings are then
followed by full Board review meetings,
which are attended by all members of 
the Board.
Internal Control
The Board has overall responsibility for
the Group’s system of internal control.
However, such a system is designed to
achieve business objectives and can 
only provide reasonable and not 
absolute assurance against material 
mis-statement.
The provisions of the Combined Code in
respect of internal controls require that
directors review all controls including
operational, compliance and risk
management, as well as ﬁnancial control.
Through reports from the Group’s
Operations Board, the Board has
reviewed the effectiveness of the Group’s
system of internal controls for the period
covered by the annual report and
accounts.
Corporate governance
32   Annual Report 2004
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 32 Annual Report 2004 33
The Company has an established
framework of internal controls which,
amongst other things, includes 
the following:
Financial Reporting
The Group has a comprehensive
budgeting system with an annual
business plan approved by the Board.
Operating results and cash ﬂows are
reported on monthly and compared
against budget. Forecasts are reviewed
throughout the year and revised as
necessary. The Company reports to
shareholders on a half-yearly basis.
Investment Appraisal
The Company has clearly deﬁned
guidelines for capital expenditure. 
These include annual budgets, 
detailed appraisal and review procedures,
levels of authority and due diligence
requirements where investment or
development properties are being
acquired. Post-investment appraisals 
are performed for major investments.
Business Risk Assessment
The Group has developed a
comprehensive risk management system
whereby strategic threats to the business
are identiﬁed and the management and
control of those threats prioritised. As a
result of this system, the Board is
satisﬁed with the high level controls in
place, although all areas of the business
are kept under review and new controls
introduced as appropriate.
Social Responsibility
The Company has formal procedures for
considering the signiﬁcance to its
business of social, environmental and
ethical (SEE) matters, which are
considered as part of the Group’s risk
management system (referred to above in
relation to Business Risk Assessment).
The results of the benchmarking reviews
which form part of that system (which are
carried out by the Group’s Operations
Board), are reported to and considered
by the full Board on a six monthly basis.
Details of the SEE risks and opportunities
that are considered most signiﬁcant to the
Group are set out under the ‘Market
Insight’ section on page 22.
In light of the above, the Board believes
that it has in place appropriate
procedures to identify and assess the
signiﬁcant risks to the Company’s short
and long-term value arising from SEE
matters, as well as opportunities to
enhance value that may arise from an
appropriate response. In that respect, the
Board considers that it receives adequate
information to make those assessments
and that the Company has in place
effective measures for managing
signiﬁcant risks. Account is taken of 
SEE matters in relation to the training 
of Directors.
Investor Relations
The Executive Directors have a
programme of meetings with institutional
shareholders and analysts. Feedback
from such meetings regarding
shareholder opinion is provided to the
Board as a whole. In addition, Non-
Executive Directors are available to meet
with major shareholders if requested. 
The Company’s Annual General Meeting
provides an opportunity, which the Board
encourages, for private investors to
communicate with the Company.
Going Concern
After making enquiries, the Directors have
a reasonable expectation that the Group
and the Company have adequate
resources to continue in operational
existence for the foreseeable future. 
For this reason, they continue to adopt
the going concern basis in preparing 
the accounts.
Statement of Directors’
Responsibilities
Company law requires the Directors to
prepare ﬁnancial statements for each year
which give a true and fair view of the state
of affairs of the Company and the Group
and of the proﬁt or loss for that period.
In preparing those ﬁnancial statements
the Directors are required to:
select suitable accounting polices and 
then apply them consistently;
make judgements and estimates that 
are reasonable and prudent;
state whether applicable accounting 
standards have been followed, subject 
to any material departures disclosed 
and explained in the ﬁnancial 
statements; and
prepare the ﬁnancial statements on the
going concern basis unless it is 
inappropriate to presume that the 
Group will continue in business.
The Directors are responsible for keeping
proper accounting records which disclose
with reasonable accuracy at any time the
ﬁnancial position of the Company and
which enable them to ensure that the
ﬁnancial statements comply with the
Companies Act 1985. They have general
responsibility for taking such steps as are
reasonably open to them to safeguard the
assets of the Group and to prevent and
detect fraud and other irregularities.
Corporate governance
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 33 Introduction
The Board reports to shareholders on
Directors’ remuneration as set out below.
In preparing this report, the Remuneration
Committee of the Board (the "Committee")
has complied with the Directors’
Remuneration Report Regulations 2002
(the "Regulations"). The Report also
meets the relevant requirements of the
Listing Rules of the Financial Services
Authority and describes how the Board
has applied the Principles of Good
Governance in relation to directors’
remuneration. A resolution to approve the
Report will be proposed at the
forthcoming Annual General Meeting.
The Regulations require the auditors to
report to the Company’s members on the
"auditable part" of the Remuneration
Report and to state whether, in their
opinion, that part of the Report has been
properly prepared in accordance with the
Companies Act 1985 (as amended by the
Regulations). The Report has therefore
been divided into separate sections for
the unaudited and audited information.
Within the unaudited section, the report
deals with the remuneration policy that is
to be followed in 2005, summarises the
results of remuneration surveys that have
been undertaken and describes
arrangements which applied during 2004.
Remuneration Committee
During the year, the Remuneration
Committee of the Board consisted of the
Chairman of the Board (Mr G K Maddrell),
and the Non-Executive Directors of the
Company, namely Mr N P Hall, Baroness
Prashar (until her resignation from the
Board on 1 March 2004) and Mr S R H
Beevor (as from 18 March 2004). Mr N A
Porter is invited to attend meetings of the
Committee, which is chaired by
Mr Maddrell.
The Committee is required annually to
consider and review all aspects of the
executive Directors’ employment,
performance and remuneration and the
Group’s policies on those matters. Mr
Porter takes no part in the discussions
concerning his own remuneration, nor
does he attend those parts of the
meetings of the Committee which discuss
that issue. 
The Committee is able to obtain
independent professional advice from
remuneration and other consultants in
order to carry out its duties. During the
year, such advice was received from
PricewaterhouseCoopers LLP .
PricewaterhouseCoopers provided no
other services to the Company during the
course of the year. In addition, Dr A Lee,
the Group HR Director, provided advice
and services to the Committee during the
course of the year. The members of the
Committee attend the Company’s Annual
General Meeting and are available to
answer shareholders’ questions about the
Directors’ remuneration.
Policy on Remuneration of
Executive Directors and
Senior Executives
The policy in respect of Directors’
remuneration for the following and
subsequent years is to ensure that the
remuneration packages it offers are
competitive and designed to attract, retain
and motivate executive Directors and
senior executives of an appropriate calibre.
Performance-related reward policies are
operated which are designed to provide a
signiﬁcant element of "at risk" pay, which is
only available on the achievement of
stretching performance criteria.
During 2004, a review of executive
remuneration was undertaken on behalf
of the Committee by
PricewaterhouseCoopers. That review
compared all elements of remuneration
against a group of 20 comparator
companies, having regard, amongst other
things, to the size of the business and the
sectors within which the Company
operates. The results of that review
indicated that the base salaries of the
Executive Directors were at the market
median, whilst total remunerations at the
level of the upper quartile. The Committee
conﬁrmed its intentions to pay base
salaries at the median level and to
provide the opportunity for executives to
achieve total remuneration at the upper
quartile level when justiﬁed by very strong
performance against clearly identiﬁed
measures. The Committee also conﬁrmed
its intention to promote the retention of
Executives by paying a greater proportion
of total remuneration in the form of long-
term awards, rather than in the form of
annual bonus arrangements.
The main components of the Directors’
remuneration packages are:
Basic Salary
The basic salary of each Director has
been ﬁxed taking into account advice
from independent sources on the rates of
salary for similar roles in selected groups
of comparable companies and the
performance of the relevant individual. 
As stated above, the Company has
agreed the principle that base salaries
should be set broadly in line with the
market median.
34   Annual Report 2004
Directors’ remuneration report
Directors’ remuneration report
for the year ended 31 December 2004
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 34 Annual Report 2004 35
Performance Related Bonus
The Group operates an annual
performance related bonus scheme
which is designed to reward contributions
and encourage the achievement of
targeted levels of performance over the
short term. The maximum potential bonus
payment was, in 2004, in the case of
each of the Executive Directors,
equivalent to 100 per cent of his base
salary. However achievement of any
bonus payment is subject to stretching
performance criteria, linked to both the
individual performance of the Director and
that of the Group. Individual performance
targets (which account for 40 per cent of
a Director’s maximum potential bonus
payment) are set following the
"Performance Development Programme"
reviews that are carried out for all
employees (including the Executive
Directors) at the beginning of each year.
The remaining 60 per cent of the
maximum potential bonus payment,
which is referable to the performance of
the Group, involves the Group achieving
targets in relation to proﬁtability, increases
in net asset value, customer satisfaction
and employee satisfaction (the latter two
components both being monitored by
independent organisations). These
performance conditions were selected as
the most appropriate measures to
achieve sustained ﬁnancial performance.
This will occur by optimising our
investment and operating decisions; by
developing strong relationships with
Universities and individual customers and
by creating an environment where
employees will choose to remain and
develop their careers. The performance
related bonus is not pensionable and
Non-Executive Directors do not
participate in the scheme.
In respect of the year ended 31
December 2004, each of the current
Executive Directors has been awarded a
performance related bonus equivalent to
81% of his base salary. As a result, the
total remuneration of each of the
Executive Directors for the year, based on
the results of the surveys carried out by
PricewaterhouseCoopers, is likely to be at
the upper quartile level of the comparator
group of companies. Each of the bonus
payments made to the Executive
Directors has been paid entirely in cash.
For 2005, the maximum bonus payment,
for Executive Directors will be equivalent
to 100% of base salary. The achievement
of any bonus will be subject to the
achievement of stretching performance
targets relating to the Group achieving
proﬁtability, increases in net asset value,
customer satisfaction and employee
satisfaction. For 2005, any bonus paid to
M C Allan and A Lee will be paid half in
cash and half in shares, held in an
Employee Share Ownership Trust for
three years. Due to a policy of the
Remuneration Committee, whereby any
Director who holds an amount of shares
with a value greater than a sum
equivalent to three times base salary will
receive his bonus payment entirely in
cash, any bonus paid to N A Porter for
2005 will be paid entirely in cash.
Long-term Incentives
In addition to the annual bonus referred to
above, the Group seeks to encourage
and reward good long-term performance
by providing incentives linked to the
performance of the Company’s shares.
These incentives have, to date, been
provided in the form of ordinary share
options and details of all options awarded
to the Directors are set out in the
"auditable part" of this Report.
In August 1999, the Company adopted
The UNITE Group plc Approved
Company Share Option Scheme (the
"Approved Scheme"), being a scheme
approved by the Inland Revenue. In April
2000, the Company also adopted The
UNITE Group plc Unapproved Share
Option Scheme (the "Unapproved
Scheme"). Under the Approved Scheme,
the total market value of shares, at the
date of grant, over which any participant
may be awarded options is £30,000,
whilst under the Unapproved Scheme, the
total market value, at the date of grant, of
all shares over which any participant may
be awarded options (including options
granted under other schemes), must not
exceed four times his total remuneration.
The Non-Executive Directors do not
participate in either the Approved Scheme
or the Unapproved Scheme. 
Options granted under the Approved
Scheme have not been made subject to
performance conditions, which is
considered appropriate in view of the
relatively small number of options that
may be granted to individuals under such
schemes.
Options granted to Directors prior to 2004
under the Unapproved Scheme are
exercisable as to 50 per cent provided the
total shareholder return for the Company
is such that it is equal to or exceeds the
median total shareholder return of
companies included in the FTSE Small
Companies Index (excluding investment
trusts) over the three year period from the
date of grant. The remaining 50 per cent
are exercisable provided the Company’s
net asset growth exceeds the average net
asset growth of companies included in
the FTSE Small Companies Index
(excluding investment trusts) over the
three-year period from the date of grant.
Such performance criteria were agreed
with institutional shareholders at the time
the Unapproved Scheme was adopted.
Directors’ remuneration report
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 35 However, options granted under the
Unapproved Scheme after 1 January
2004 are subject to revised performance
criteria based solely on total shareholder
return, such that options will be
exercisable only as to 50 per cent if the
total shareholder return for the Company,
over the three year period from the date
of grant, is such that it is equal to the
median total shareholder return of
companies included in the FTSE Small
Companies Index (excluding investments
trusts) over that period. If the Company’s
performance would put it in the upper
quartile (upon the basis described
above), 100 per cent of the options
awarded will be exercisable. Between
median and upper quartile performance,
the number of options which may be
exercised will be calculated on a straight
line basis.
As mentioned above, the Remuneration
Committee intends to promote the long-
term retention and reward of Executive
Directors and Senior Managers by
placing more emphasis on long-term
elements of an overall remuneration
package. To this end, the Remuneration
Committee has engaged the services of
DLA to review a range of options to
achieve this, including the establishment
of a long term incentive plan (LTIP).
A recommendation as to the most
appropriate alternatives, and timetable for
introduction, will be made by the
Remuneration Committee in the ﬁrst
half of 2005.
Service Contracts and
Notice Periods
In accordance with general market
practice each of the executive Directors
has a rolling service contract requiring
twelve months’ notice of termination on
either side. Such contracts contain no
speciﬁc provision for compensation for
loss of ofﬁce, other than an obligation 
to pay for any notice period waived by 
the Company.
The dates of the executive Directors’
service contracts are as follows:
Each of the Non-Executive Directors have
speciﬁc letters of engagement, the dates
of which are set out below:
Non-Executive Directors are appointed for
an initial term of three years, subject to
normal provisions as to retirement by
rotation. Subsequent terms of three years
may be awarded. Current appointments
will expire at the annual general meeting
in 2008 in the case of Mr G K Maddrell, at
the annual general meeting in 2006 in the
case of Mr N P Hall and at the annual
general meeting in 2007 in the case of Mr
S R H Beevor. The appointment and
re-appointment and the remuneration of
Non-Executive Directors are matters
reserved for the full Board. In that respect,
it should be noted that by July 2005, Mr G
K Maddrell will have completed two three-
year terms. Following a review of his
performance by the Board, it was decided
to extend Mr Maddrell’s appointment for a
further three-year term.
36   Annual Report 2004
Directors’ remuneration report
N A Porter 14 January 1999
M C Allan 31 October 1999
A Lee 21 November 2000
G K Maddrell 13 August 1999
N P Hall 6 March 2003
S R H Beevor 20 February 2004
Total Shareholder Return
The following graph charts the total cumulative shareholder return of the Company since
1 January 2000 to 31 December 2004.
Whilst there is no comparator index or group of companies which truly reﬂects the
activities of the Group, the FTSE Real Estate Index (the constituent members of which
are all property holding and/or development companies within the UK), was chosen as it
reﬂects trends within the UK property market generally and tends to be the index against
which analysts judge the performance of the Company.
Dec 99 Jun 00 Dec 00 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04
0
50
100
150
200
250
UNITE Group FTSE Real Estate Index
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 36 Annual Report 2004 37
Messrs N A Porter and M C Allan and Dr A
Lee have been awarded options respectively
over 20,477, 17,500 and 10,000 ordinary
shares pursuant to the Approved Scheme. All
other options have been granted pursuant to
Unapproved Scheme. All options have been
granted for no consideration.
Details of the performance criteria, by
reference to which options are exercisable,
are set out under the heading "Long-term
incentives" above. Those details should
also be taken as forming part of the
"auditable part" of this Report. 
As at 31 December 2004, the middle
market price for ordinary shares in the
Company was 302p per share. During the
course of the year, the market price of the
Company’s shares ranged from 174.5p to
302p per ordinary share.
By order of the Board
G K Maddrell
Chairman of the Remuneration
Committee
16 March 2005
Directors’ remuneration report
Fees Basic Performance Other T otal T otal
Salaries Bonus Beneﬁts* Remuneration Remuneration
2004 2003
£’s £’s £’s £’s £’s £’s
Executive Directors
N A Porter - 284,148 237,104 16,792 538,044 509,796
M C Allan - 175,000 158,340 13,602 346,942 34,796
A Lee - 137,500 117,740 15,639 270,879 29,740
Non Executive Directors (Fees)
G K Maddrell 93,700 - - - 93,700 85,000
N P Hall 38,600 - - - 38,600 25,481
S R H Beevor** 23,000 - - - 23,000 -
Baroness Prashar 4,167 - - - 4,167 25,000
* Beneﬁts receivable consist primarily of car
allowance and private health care insurance.
** The fees paid in respect of Mr S R H
Beevor were paid to Grosvenor Investments
Limited, which company made available the
services of Mr Beevor.
The Total Remuneration ﬁgures above in
relation to Mr M C Allan and Dr A Lee for
2003 reﬂect the salaries, bonuses and
beneﬁts received in respect of the period
from the date of their appointments to the
Board, being 17 November 2003, to 31
December 2003.
During the year both Mr M C Allan and Dr A
Lee participated in The UNITE Group
Personal Pension Scheme, which is a money
purchase scheme, in relation to whom the
Company contributed £13,125 and £10,313
respectively in the year.
Director As at Granted Exercised As at Exercise Normal
31.12.03* during during 31.12.04 price Exercise Dates
the year the year
N A Porter 393,706 - - 393,706 146.5p 22.10.2005-21.10.2012
M C Allan 17,500 - - 17,500 169p 18.04.2003-17.04.2010
32,500 - - 32,500 176.5p 26.04.2003-25.04.2010
11,823 - - 11,823 323.5p 21.03.2005-20.03.2012
150,388 - - 150,388 129p 11.10.2005-10.10.2012
- 60,733 - 60,733 191p 04.05.2007-03.05.2014
A Lee 50,000 - - 50,000 300p 21.03.2004-20.03.2011
12,480 - - 12,480 323.5p 21.03.2005-20.03.2012
155,039 - - 155,039 129p 11.10.2005-10.10.2012
- 34,555 - 34,555 191p 04.05.2007-03.05.2014
G K Maddrell - - - - - -
N P Hall - - - - - -
S R H Beevor - - - - - -
Baroness Prashar - - - - - -
Audited Information
Remuneration Summary
Share Options
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 37 38   Annual Report 2004
Accounts
Independent auditors’ report
to the members of The UNITE Group plc
We have audited the ﬁnancial statements
on pages 39 to 60  We have also
audited the information in the directors’
remuneration report that is described
as having been audited.
This report is made solely to the
company’s members, as a body, in
accordance with section 235 of the
Companies Act 1985. Our audit work has
been undertaken so that we might state
to the company’s members those matters
we are required to state to them in an
auditor’s report and for no other purpose.
To the fullest extent permitted by law, we
do not accept or assume responsibility to
anyone other than the company and the
company’s members as a body, for our
audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of
directors and auditors
The directors are responsible for
preparing the Annual Report and the
directors’ remuneration report. As
described on page 33, this includes
responsibility for preparing the ﬁnancial
statements in accordance with applicable
United Kingdom law and accounting
standards. Our responsibilities, as
independent auditors, are established in
the United Kingdom by statute, the
Auditing Practices Board, the Listing
Rules of the Financial Services Authority,
and by our profession's ethical guidance. 
We report to you our opinion as to
whether the ﬁnancial statements give a
true and fair view and whether the
ﬁnancial statements and the part of the
directors’ remuneration report to be
audited have been properly prepared in
accordance with the Companies Act
1985. We also report to you if, in our
opinion, the directors’ report is not
consistent with the ﬁnancial statements, 
if the company has not kept proper
applied and adequately disclosed.
We planned and performed our audit so
as to obtain all the information and
explanations which we considered
necessary in order to provide us with
sufﬁcient evidence to give reasonable
assurance that the ﬁnancial statements
and the part of the directors’
remuneration report to be audited are free
from material misstatement, whether
caused by fraud or other irregularity or
error. In forming our opinion we also
evaluated the overall adequacy of the
presentation of information in the ﬁnancial
statements and the part of the directors’
remuneration report to be audited.
Opinion
In our opinion:
the ﬁnancial statements give a true and
fair view of the state of affairs of the
company and the group as at 31
December 2004 and of the loss of the
group for the year then ended; and 
the ﬁnancial statements and the part of
the directors’ remuneration report to be
audited have been properly prepared
in accordance with the Companies
Act 1985.
16 March 2005
KPMG Audit Plc
Chartered Accountants 
Registered Auditor
London
accounting records, if we have not
received all the information and
explanations we require for our audit, or if
information speciﬁed by law regarding
directors' remuneration and transactions
with the group is not disclosed.
We review whether the corporate
governance statement on page 30
reﬂects the company’s compliance with
the nine provisions of the 2003 FRC Code
speciﬁed for our review by the Listing
Rules, and we report if it does not. We are
not required to consider whether the
board's statements on internal control
cover all risks and controls, or form an
opinion on the effectiveness of the
group's corporate governance
procedures or its risk and control
procedures.
We read the other information contained
in the Annual Report, including the
corporate governance statement and the
unaudited part of the directors’
remuneration report, and consider
whether it is consistent with the audited
ﬁnancial statements. We consider the
implications for our report if we become
aware of any apparent misstatements or
material inconsistencies with the ﬁnancial
statements.
Basis of audit opinion
We conducted our audit in accordance
with Auditing Standards issued by the
Auditing Practices Board. An audit
includes examination, on a test basis,
of evidence relevant to the amounts and
disclosures in the ﬁnancial statements
and the part of the directors’
remuneration report to be audited. It also
includes an assessment of the signiﬁcant
estimates and judgements made by the
directors in the preparation of the ﬁnancial
statements, and of whether the
accounting policies are appropriate to the
group's circumstances, consistently
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 38 Accounts
Annual Report 2004 39
Consolidated proﬁt and loss account
for the year ended 31 December 2004
Turnover 2 74,623 48,055
Cost of sales (24,678) (12,848)
Gross proﬁt 49,945 35,207
Administrative expenses - ordinary (14,154) (15,110)
- goodwill amortisation 11 (2,665) (5,570)
(16,819) (20,680)
Group operating proﬁt 33,126 14,527
Proﬁt/(Loss) on disposal of investment properties 23 (125)
Proﬁt on ordinary activities before interest and taxation 33,149 14,402
Interest receivable 6 1,137 681
Interest payable and similar charges 7 (38,098) (25,871)
Loss on ordinary activities before taxation and
goodwill amortisation (1,147) (5,218)
Loss on ordinary activities before taxation (3,812) (10,788)
Taxation 8 - -
Loss on ordinary activities after taxation (3,812) (10,788)
Dividends paid and proposed 9 (2,780) (2,702)
Retained loss for the ﬁnancial period 23 (6,592) (13,490)
Loss per share
Basic 10 3.5p 10.0p
Excluding goodwill amortisation 10 1.0p 4.8p
Diluted 10 3.5p 10.0p
All of the above activities relate to continuing operations.
2004 2003
Note £000 £000
Consolidated statement of total
recognised gains and losses
for the year ended 31 December 2004
Loss for the ﬁnancial year (3,812) (10,788)
Unrealised surplus on revaluation of properties 23 43,137 31,308
Unrealised surplus on revaluation of properties in joint venture 23 1,125 -
Total recognised gains and losses for the ﬁnancial year 40,450 20,520
2004 2003
Note £000 £000
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 39 40   Annual Report 2004
Accounts
Consolidated balance sheet
at 31 December 2004
Fixed assets
Intangible assets 11 2,475 5,140
Tangible assets
Investment and development properties 12 1,110,450 948,792
Other tangible ﬁxed assets 13 18,099 19,726
1,128,549 968,518
Investment in joint venture 15
Share of gross assets 7,246 -
Share of gross liabilities (6,121) -
1,125 -
1,132,149 973,658
Current assets
Stocks 16 13,401 2,769
Debtors 17 32,325 20,072
Cash at bank and in hand 37,582 24,980
83,308 47,821
Creditors: amounts falling due within one year
Short term build loans and other borrowings
(including convertible debt) 18 (106,153) (107,664)
Other creditors 18 (76,777) (75,823)
(182,930) (183,487)
Net current liabilities (99,622) (135,666)
Total assets less current liabilities 1,032,527 837,992
Creditors: amounts falling due after more than one year
Long term borrowings 19 (662,906) (511,200)
Net assets 369,621 326,792
Capital and reserves
Called up share capital 22 27,825 27,054
Share premium account 23 141,324 136,936
Revaluation reserve 23 196,914 161,786
Merger reserve 23 40,177 40,177
Proﬁt and loss account 23 (36,619) (39,161)
Equity shareholders’ funds 369,621 326,792
Net asset value per share 332p 302p
These ﬁnancial statements were approved by the Board of Directors on 16 March 2005 and were signed on is behalf by:
NA Porter MC Allan
Director Director
2004 2003
Note £000 £000 £000 £000
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 40 Accounts
Annual Report 2004 41
Company balance sheet
at 31 December 2004
Fixed assets
Investments 14 222,775 184,733
Current assets
Debtors 17 227,286 382,219
Cash at bank and in hand 285 8,293
227,571 390,512
Creditors: amounts falling due within one year
Short term build loans and other borrowings
(including convertible debt) 18 - (14,229)
Other creditors 18 (80,725) (234,224)
(80,725) (248,453)
Net current assets 146,846 142,059
Net assets 369,621 326,792
Capital and reserves
Called up share capital 22 27,825 27,054
Share premium account 23 141,324 136,936
Revaluation reserve 23 157,151 119,110
Merger reserve 23 40,177 40,177
Proﬁt and loss account 23 3,144 3,515
Equity shareholders’ funds 369,621 326,792
These ﬁnancial statements were approved by the Board of Directors on 16 March 2005 and were signed on is behalf by:
NA Porter MC Allan
Director Director
2004 2003
Note £000 £000 £000 £000
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 41 42  Annual Report 2004
Accounts
Consolidated cash ﬂow statement
for the year ended 31 December 2004
Cash ﬂow from operating activities 26 22,963 23,513
Returns on investments and servicing of ﬁnance 27 (45,619) (32,062)
Capital expenditure 27 (114,687) (172,127)
Equity dividends paid (2,728) (2,689)
Cash outﬂow before ﬁnancing (140,071) (183,365)
Financing 27 148,907 192,767
Increase in cash in the year 8,836 9,402
2004 2003
Note £000 £000
Reconciliation of net cash ﬂow to
movement in net debt
for the year ended 31 December 2004
Increase in cash in the year 8,836 9,402
Cash ﬂow from increase in debt and lease ﬁnancing (148,007) (192,766)
Change in net debt resulting from cash ﬂows (139,171) (183,364)
Loan stock converted into ordinary shares 4,259 856
Amortisation of debt issue costs (2,681) (1,389)
Movement in net debt in the year (137,593) (183,897)
Net debt at beginning of year 28 (593,884) (409,987)
Net debt at end of year 28 (731,477) (593,884)
2004 2003
Note £000 £000
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 42 Accounts
Annual Report 2004 43
Note of consolidated historical cost
proﬁts and losses
for the year ended 31 December 2004
Reported loss on ordinary activities before taxation (3,812) (10,788)
Realisation of property revaluation gains of previous years 8,331 1,422
Historical cost proﬁt/(loss) on ordinary activities before taxation 4,519 (9,366)
Historical cost proﬁt/(loss) for the year retained after taxation and dividends 1,739 (12,068)
2004 2003
Note £000 £000
Reconciliations of movements in
shareholders’ funds
for the year ended 31 December 2004
(Loss)/Proﬁt attributable to ordinary shareholders (3,812) (10,788) 2,409 2,694
Dividends paid and proposed (2,780) (2,702) (2,780) (2,702)
Retained loss for the year (6,592) (13,490) (371) (8)
Net surplus on revaluations 44,262 31,308 38,041 17,826
Net proceeds of new share capital subscribed 5,159 856 5,159 856
Net addition to shareholders’ funds 42,829 18,674 42,829 18,674
Opening equity shareholders’ funds 326,792 308,118 326,792 308,118
Closing equity shareholders’ funds 369,621 326,792 369,621 326,792
Group Group Company Company
2004 2003 2004 2003
£000 £000 £000 £000
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 43 44   Annual Report 2004
Accounts
Notes
(forming part of the ﬁnancial statements)
1. Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group’s
ﬁnancial statements.
Basis of preparation
The ﬁnancial statements have been prepared under the historical cost convention modiﬁed to include investment and development properties at
valuation and in accordance with applicable accounting standards and the Companies Act 1985 except as stated under investment and
development properties.
In the Company’s ﬁnancial statements, investments in subsidiary undertakings are revalued annually to the underlying net asset value of these
undertakings. This is considered an appropriate treatment by the Directors, since the activity of the subsidiaries, namely property investment, is
such that net assets are an appropriate valuation method.
Basis of consolidation
The consolidated ﬁnancial statements include the ﬁnancial statements of the Company and its subsidiary undertakings. Unless otherwise stated,
the acquisition method of accounting has been adopted. Under the acquisition method, the results of subsidiary undertakings acquired or
disposed of in the year are included in the consolidated proﬁt and loss account from the date of acquisition or up to the date of disposal.
Under section 230(4) of the Companies Act 1985 the Company is exempt from the requirement to present its own proﬁt and loss account.
Intangible ﬁxed assets 
Purchased goodwill (representing the excess of the fair value of the consideration given over the fair value of the separable net assets acquired)
arising on consolidation is capitalised and is amortised over 20 years. When the value of goodwill is recognised as impaired, an impairment charge
is made against operating proﬁt. 
Investment and development properties
Development properties comprise both properties in the course of construction and those held as sites for future construction whereas investment
properties are those where construction has been completed. All these properties are held for their long term investment potential.
In accordance with Statement of Standard Accounting Practice 19 Accounting for investment properties:
investment properties are revalued annually at open market values (determined in accordance with the Guidance Notes on the valuation of
assets issued by the Royal Institution of Chartered Surveyors). Surpluses and deﬁcits arising and the aggregate surplus or deﬁcit is transferred
to a revaluation reserve except that any impairment in the value of an investment property is taken to the proﬁt and loss account for the year;
and 
no depreciation or amortisation is provided in respect of freehold investment properties or leasehold investment properties with over 
20 years to run. 
This treatment, as regards the Group’s investment properties, may be a departure from the requirements of the Companies Act concerning the
depreciation of ﬁxed assets. However, these properties are not held for consumption but for investment and the Directors consider that systematic
annual depreciation would be inappropriate. The accounting policy adopted is therefore necessary for the accounts to give a true and fair view.
Depreciation or amortisation is only one of many factors reﬂected in the annual valuation and the amount which might otherwise have been shown
cannot be separately identiﬁed or quantiﬁed.
Net gains or losses on disposal of investment and development properties are calculated by reference to book value at the date of disposal and
any revaluation surpluses of earlier years are transferred from revaluation reserve to the proﬁt and loss account as a reserve movement.
Properties held for future development and developments in progress are revalued annually based on open market value. They are not subject to
depreciation, since the Directors consider that the useful economic life of the assets does not begin until the properties are completed.
The cost of investment and development properties includes amounts relating to interest and attributable overheads, in addition to direct costs. 
For this purpose, the interest rate applied to funds provided for property development is arrived at by reference, where appropriate, to the actual
rate payable on borrowings for development purposes and, in regard to that part of the development cost ﬁnanced out of general borrowings, to
the average rate paid on funding the assets employed by the Group. 
Interest transferred to the cost of properties is applied gross of associated tax relief.
8126 UNITE A\R 64pp Interior  18/4/05  11:27  Page 44 Accounts
Annual Report 2004 45
Notes
(continued)
T angible ﬁxed assets and depreciation
For assets other than investment and development properties, depreciation is provided to write off the cost less the estimated residual value of
tangible ﬁxed assets by equal instalments over their estimated useful economic lives as follows:
Freehold buildings 50 years
Leasehold improvements Life of lease
Fixtures and ﬁttings 4 years
Motor vehicles 4 years
Plant and machinery 4 – 20 years
No depreciation is provided on freehold land.
Interest rate transactions
Interest rate swap and option agreements are used to manage the interest basis of borrowings. Interest receipts and payments under these
agreements are accrued so as to match the net income or cost with the related ﬁnance expense. No amounts are recognised in respect 
of future periods.
Borrowings
Borrowings are carried at their nominal value and net of any issue costs. Issue costs are written off to the proﬁt and loss account over the life of 
the borrowing.
Leases
Assets acquired under ﬁnance leases and similar hire purchase contracts are capitalised and the outstanding future lease obligations are shown in
creditors. Operating lease rentals are charged to the proﬁt and loss account on a straight line basis over the period of the lease.
Stocks and work in progress
Stocks are stated at the lower of cost and net realisable value. For work in progress and ﬁnished goods cost is taken as production cost, which
includes an appropriate proportion of attributable overheads.
Long T erm Contracts 
The amount of proﬁt attributable to the stage of completion of long term contracts is recognised when the outcome of the contract can be foreseen
with reasonable certainty. T urnover for such contracts is stated at cost plus attributable proﬁts appropriate to the stage of completion, less amounts
recognised in previous years. Provision is made for any losses as soon as they are foreseen.
Contract work in progress is stated at costs incurred, less those transferred to the proﬁt and loss account, after deducting foreseeable losses and
payments on account not matched with turnover.
Amounts recoverable on contracts are included in debtors and represent turnover recognised in excess of payments on account.
T urnover
T urnover represents the amounts (excluding value added tax) derived from the Group’s external activities during the year.
T urnover from investment activities comprises rents and ancillary income receivable in relation to the Group’s investment property portfolio
recognised over the life of the tenancy agreements. T urnover from development activities comprises construction services provided to external
customers (including the Group’s joint ventures) recognised as disclosed above under “Long T erm Contracts”.
T axation
The charge for taxation is based on the result for the year and takes account of taxation deferred because of timing differences between the
treatment of certain items for taxation and the treatment under the Group’s accounting policies.
Deferred tax assets and liabilities arise from timing differences between the recognition of gains and losses in the ﬁnancial statements and their
recognition in a tax computation. 
In accordance with FRS19, deferred tax is provided in respect of all timing differences that have originated, but not reversed at the balance sheet
date that may give rise to an obligation to pay more or less tax in the future except as otherwise provided by FRS19. Deferred tax is not recognised
when ﬁxed assets are revalued unless by the balance sheet date there is a binding agreement to sell the revalued assets and the gain or loss
expected to arise on sale has been recognised in the ﬁnancial statements. Deferred tax is measured on a non-discounted basis.
Post retirement beneﬁts
The Group operates a deﬁned contribution pension scheme. The assets of the scheme are held separately from those of the Group in an
independently administered fund. The amount charged to the proﬁt and loss account represents the contributions payable to the scheme in
respect of the accounting period.
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 45 46   Annual Report 2004
Accounts
Notes
(continued)
4. Remuneration of Directors
2004 2003
£000 £000
Directors’ e moluments 1,315 1,889
The aggregate amount paid to the company money purchase pension scheme in respect of the directors for the year was £23,438 
(2003: £23,755). The number of directors to whom retirement beneﬁts are accruing under the scheme is 2 (2003: 4 directors).
Full details of Directors’ remuneration are disclosed on pages 34 to 37
2004 2003
£000 £000
Proﬁt on ordinary activities before taxation is stated after charging/(crediting):
Auditors’ remuneration (including £15,000 (2003: £15,000) in respect of the parent company 180 205
Fees paid to the auditor in respect of other services 249 27
Depreciation and other amounts written off tangible ﬁxed assets 2,354 2,524
(Proﬁt)/Loss on disposal of ﬁxed assets (23) 125
Amortisation of goodwill 2,665 5,570
Hire of plant and machinery – including rentals payable under operating leases 413 367
Hire of other assets – including rentals payable under operating leases 1,395 979
3. Proﬁt on ordinary activities before taxation
2. Segmental analysis of operations
Included in the development loss for the period to 31 December 2003 is the loss relating to the under recovery of manufacturing overheads of
£1,246,000 which, in line with expectations, has not recurred.
£95,700 was paid to the auditors in respect of reﬁnancing work and has been capitalised (2003: £nil).
2004 2003
£000 £000
Turnover
Investment activities 66,808 48,055
Development activities 7,815 -
Corporate activities --
74,623 48,055
Proﬁt before interest and taxation
Investment activities 40,951 29,088
Development activities (1,215) (4,975)
Corporate costs (3,945) (4,016)
(Loss)/Proﬁt on disposal of investment properties 23 (125)
Goodwill amortisation - investment activities (150) (150)
- development activities (2,515) (5,420)
33,149 14,402
Net assets
Investment activities 326,771 268,336
Development activities 42,850 58,456
Corporate activities - -
369,621 326,792
Portfolio proﬁt is calculated as follows:
Proﬁt before interest and taxation on investment activities - as above 40,951 29,088
Net interest payable (36,961) (25,190)
3,990 3,898
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 46 Accounts
Annual Report 2004 47
Notes
(continued)
2004 2003
£000 £000
Wages and salaries 18,564 15,571
Social security costs 1,920 1,599
Pension costs 298 290
20,782 17,460
Number of employees
2004 2003
Managerial and administration 466 311
Site operatives 240 188
706 499
5. Staff numbers and costs
The average number of persons employed by the Group (including Directors) during the year, analysed by category, was as follows:
The aggregate payroll costs of these persons were as follows:
2004 2003
£000 £000
Interest on bank deposits 970 504
Interest on other loans 167 -
Interest on loans to companies under common inﬂuence - 177
1,137 681
6. Interest receivable
2004 2003
£000 £000
Amounts payable on bank loans and overdrafts
On loans not wholly repayable within ﬁve years 2,959 544
On loans wholly repayable within ﬁve years 27,235 15,213
On bank overdrafts 82 106
Amounts payable on other loans
On asset backed bonds 18,700 18,730
On convertible unsecured loan stock 209 433
On unsecured loan notes 16 156
Costs written off on reﬁnancing 99 -
Finance charges payable in respect of hire purchase agreements 92 155
49,392 35,337
Transfer to cost of investment and development properties (11,294) (9,466)
38,098 25,871
7. Interest payable and similar charges
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 47 48   Annual Report 2004
Accounts
9. Dividends
2004 2003
£000 £000
Equity
Interim dividend paid of 0.83p (2003: 0.83p) per 25p ordinary share 921 895
Final dividend proposed of 1.67p (2003: 1.67p) per 25p ordinary share 1,859 1,807
2,780 2,702
10. Loss per share
Basic loss per share has been calculated using a weighted average number of shares of 109,477,518 (2003: 107,859,284) as follows:
The share options and convertible loan stock in issue during 2003 and 2004 do not give rise to any dilutive potential ordinary shares and therefore
the basic and diluted loss per share are the same.
Losses EPS
After goodwill Before goodwill After goodwill Before goodwill
amortisation amortisation amortisation amortisation
£000 £000 pence pence
Year ended 31 December 2004
Basic loss (3,812) (1,147) (3.5) (1.0)
Year ended 31 December 2003
Basic loss (10,788) (5,218) (10.0) (4.8)
Notes
(continued)
8. Taxation
(a) Analysis of charge in the year
There was no liability to taxation in respect of either year for the Group or its joint venture undertaking.
(b) Factors affecting the tax charge for the year
The tax credit on the loss on ordinary activities has been reduced from the amount that would arise from applying the prevailing corporation
tax rate to the Group’s losses, as follows:
2004 2003
£000 £000
UK corporation tax at 30% (1,144) (3,236)
Permanently disallowable expenditure 2,425 1,784
Capital gains in excess of accounting proﬁt 2,230 -
Consolidation adjustments not deductible for tax 4,953 4,175
Non-taxable proﬁts and capitalised expenditure deductible (2,277) (1,944)
Excess tax losses (utilised)/not utilised in year (1,421) 2,631
Excess of capital allowances over depreciation (4,766) (3,410)
- -
(c) Factors that may affect future tax charges
Deferred taxation balances arising in the Group are set out in detail in note 21.
In accordance with FRS19, the deferred tax in respect of property revaluation surpluses has not been provided.
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 48 Accounts
Annual Report 2004 49
11. Intangible ﬁxed assets
Goodwill
£000
Group
Cost
At beginning and end of year 16,257
Amortisation
At beginning of year 11,117
Charged in year 2,665
At end of year 13,782
Net book value
At 31 December 2004 2,475
At 31 December 2003 5,140
12. Investment and development properties
Properties held
Investment Developments in for future
Properties progress development Total
£000 £000 £000 £000
Group
Cost or valuation and net book value
At beginning of year 788,304 124,281 36,207 948,792
Additions 827 179,869 2,558 183,254
Disposals (49,041) (557) (15,135) (64,733)
Transfers 218,723 (198,017) (20,706) -
Revaluations 32,647 10,490 - 43,137
At 31 December 2004 991,460 116,066 2,924 1,110,450
At 31 December 2003 788,304 124,281 36,207 948,792
Included within investment and development properties are the following values in respect of leasehold interests:
Properties held
Investment Developments in for future Total Total
Properties progress development 2004 2003
£000 £000 £000 £000 £000
Cost or valuation and net book value
Long leasehold 162,350 27,095 307 189,752 140,117
Short leasehold 13,300 - - 13,300 11,980
175,650 27,095 307 203,052 152,097
Notes
(continued)
Goodwill comprised two elements. Firstly, an element relating to synergy beneﬁts arising from the increased scale of the portfolio which is amortised
over 20 years. The second element represents the anticipated beneﬁts, in the form of future development gains, arising from access to the acquired
group’s portfolio of potential projects. This further element has been written off to match the recognition of gains on these pipeline projects and the
remainder of this goodwill has been written off in the current year. 
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 49 50   Annual Report 2004
Accounts
12. Investment and development properties (continued)
Investment properties were valued as at 31 December 2004, on the basis of “market value” as deﬁned in the RICS Appraisal and Valuation Manual
issued by the Royal Institution of Chartered Surveyors by CB Richard Ellis Ltd and Messrs King Sturge, Chartered Surveyors as external valuers. 
Development properties have been incorporated at valuations by the directors at acquisition or when planning permission and appropriate
construction contracts are in place, plus subsequent expenditure. These valuations were based on completed property valuations by CB Richard
Ellis Ltd and Messrs King Sturge, Chartered Surveyors.
CB Richard Ellis Ltd have valued 43% of the portfolio and Messrs King Sturge 57% by reference to completed value.
The total interest included in Group properties at 31 December 2004 was £33,370,545 (2003: £25,177,350). Total internal costs relating to
manufacturing, construction and development costs of group properties, which have been deducted in arriving at the revaluation gains recognised
on these properties, amount to £33,343,953 at 31 December 2004 (2003: £25,805,000).
13. Other tangible ﬁxed assets
Freehold Motor vehicles, Fixtures,
land and Leasehold plant and ﬁttings and
buildings Improvements machinery equipment Total
£000 £000 £000 £000 £000
Group
Cost
At beginning of year 7,462 1,292 1,273 14,791 24,818
Additions - 20 617 571 1,208
Disposals (185) - (82) (548) (815)
Transfers - - 4,195 (4,195) -
At end of year 7,277 1,312 6,003 10,619 25,211
Depreciation
At beginning of year 113 409 782 3,788 5,092
Charge for year 38 134 602 1,580 2,354
Disposals - - (64) (270) (334)
Transfers - - 71 (71) -
At end of year 151 543 1,391 5,027 7,112
Net book value
At 31 December 2004 7,126 769 4,612 5,592 18,099
At 31 December 2003 7,349 883 491 11,003 19,726
The valuation of investment and development properties comprise:
2004 2003
£000 £000
Group
Historical cost 914,661 787,006
Revaluation 195,789 161,786
1,110,450 948,792
Notes
(continued)
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 50 Accounts
Annual Report 2004 51
Notes
(continued)
13. Other tangible ﬁxed assets (continued)
Included in the above are the following relating to leased assets which are subject to hire purchase agreements.
Motor vehicles, Fixtures, 
plant and ﬁttings and
machinery equipment Total
£000 £000 £000
Net book value
At 31 December 2004 1,517 - 1,517
At 31 December 2003 25 1,981 2,006
Depreciation charge in year - 2004 192 - 192
Depreciation charge in year - 2003 16 263 279
14. Fixed asset investments
Unlisted subsidiary
undertakings
£000
Company
Cost or valuation
At beginning of year 184,733
Disposals -
Revaluation 38,042
At end of year 222,775
The Company has revalued its investment in its subsidiary undertakings to the underlying net asset values of those undertakings at the year end.
At 31 December 2004, the Group owned 100% of the equity share of the following principal subsidiary undertakings:
Subsidiary undertaking Principal activity
LDC (Holdings) plc* Holding company 
UNITE Holdings plc* Holding company
LDC (Portfolio One) Ltd Property investment
LDC (Portfolio One Finance) Ltd Property investment
LDC (Portfolio Four) Ltd Property investment
LDC (AIB Warehouse) Ltd Property investment
UNITE Integrated Solutions plc Design and Build Contractor + Property management
UNITE Accommodation Management 1 Ltd Property management
UNITE Accommodation Management 2 Ltd Property management
UNITE Accommodation Management 3 Ltd Property management
UNITE FM+ Ltd Property management
UNITE Finance One plc Property investment
UNITE Finance One (Borrowing) Ltd Property investment
UNITE Finance One (Property) Ltd Property investment
UNITE Finance One (Accommodation Services) Ltd Property management
Unite Modular Solutions Ltd Manufacture for modular construction
Except where stated all subsidiaries are registered and operate in England and Wales. All subsidiary undertakings are owned via intermediate holding
companies, except those marked * which are owned by The UNITE Group plc.
A full list of the Group’s companies will be included in the company’s annual return.
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 51 52   Annual Report 2004
Accounts
Interest in joint venture
2004 2003
£000 £000
Group
Cost or valuation and net book value
At beginning of year - -
Share of operating proﬁt for year - -
Share of interest payable - -
Share of retained proﬁt for year - -
Share of revaluation surplus 1,125 -
At end of year 1,125 -
The Group's joint venture in student villages with Lehman Brothers is held as a 75% interest in the ordinary shares of LDC (Project 110) Ltd, a
company incorporated in England and Wales, whose principal activity is the construction and letting of investment property. Under the Articles of
Association, the Group cannot exercise control over this company and its interest amounts to a 51% share of the proﬁts and assets of the joint
venture.
The value of the Group’s interest in the joint venture is held at an amount equivalent to its share of the underlying net asset value of 
the undertaking.
The amounts included in respect of the joint venture comprise the following:
15. Joint Venture Undertaking
Interest in joint venture
2004 2003
£000 £000
Share of assets
Fixed assets 7,099 -
Current assets 147 -
7,246 -
Share of liabilities
Due within one year (1,926) -
Due after one year (4,195) -
Share of net assets 1,125 -
16. Stocks
2004 2003
£000 £000
Group
Finished goods 6,618 -
Work in progress 6,070 2,316
Raw materials and consumables 713 453
13,401 2,769
Notes
(continued)
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 52 Accounts
Annual Report 2004 53
17. Debtors
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Trade debtors 13,339 4,138 - -
Amounts owed by Group undertakings - - 219,559 375,132
Amounts recoverable under contracts 4,023 -- -
Other debtors 11,691 11,755 5,748 4,205
Prepayments and accrued income 3,272 4,179 1,979 2,882
32,325 20,072 227,286 382,219
Included within other debtors of the Group is £6,078,958 (2003: £1,850,000) which is repayable after more than one year. None of the remaining
debtors were due after more than one year.
18. Creditors: amounts falling due within one year
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Bank loans and overdrafts 25,854 14,843 - 8,354
Build loans 79,924 86,445 - -
8% convertible unsecured loan stock 2004 - 4,979 - 4,979
Unsecured loan notes - 896 - 896
Obligations under ﬁnance leases and hire purchase contracts 375 501 - -
Short term build loans and other borrowings 106,153 107,664 - 14,229
Trade creditors 22,270 19,540 898 418
Amounts owed to Group undertakings - - 75,743 229,735
Other taxes and social security 981 3,464 - 43
Other creditors 14,855 7,957 1,517 1,914
Accruals and deferred income 36,812 43,055 708 307
Dividend proposed 1,859 1,807 1,859 1,807
Other creditors 76,777 75,823 80,725 234,224
182,930 183,487 80,725 248,453
Notes
(continued)
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 53 54   Annual Report 2004
Accounts
19. Creditors: amounts falling due after more than one year
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Bank loans 662,125 510,037 - -
Obligations under ﬁnance leases and hire purchase contracts 781 1,163 - -
662,906 511,200 - -
20. Analysis of debt
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Bank loans, other loans and overdrafts fall due:
In one year or less, or on demand 105,778 107,163 - 14,229
Between one and two years 66,648 125,099 - -
Between two and ﬁve years 83,249 121,103 - -
In ﬁve years or more 512,228 263,835 - -
767,903 617,200 - 14,229
2004 2003
£000 £000
Group
Within one year 431 596
In the second to ﬁfth years 826 1,260
Less future ﬁnance charges (101) (192)
1,156 1,664
The amounts falling due after more than ﬁve years comprise:
£252,499,678 (2003: £255,712,000) in respect of asset backed bonds with ﬁxed interest rates of between 5.93% and 8.55% and which are
repayable on a sliding scale with ﬁnal repayment in October 2027.
£259,728,460 (2003: £8,123,200) in respect of various bank loans repayable by instalments predominantly by November 2011 and bearing interest
at variable rates between 1.25% and 1.40% above LIBOR. 
Debt is disclosed net of issue costs of £12,009,675 (2003: £11,627,000).
The maturity of obligations under hire purchase agreements is as follows:
Notes
(continued)
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 54 Accounts
Annual Report 2004 55
The Group has various borrowing facilities available to it. The undrawn committed facilities available at 31 December 2004 in respect of which all
conditions precedent had been met at that date were as follows:
2004 2003
£000 £000
Expiring in one year or less
Build facilities 38,355 47,086
Other facilities 5,000 5,000
43,355 52,086
In addition, there are further committed facilities available where not all conditions precedent have yet been met amounting to £226m. Of this
amount £54m remains available for completed properties and £172m for development properties.
Security for the Group’s property development and investment ﬁnancing is by way of ﬁrst charges, over the properties to which they relate. 
In certain instances, cross guarantees are provided within the Group.
Fair value of ﬁnancial liabilities
Set out below is a comparison by category of the book value and fair values of the Group’s ﬁnancial liabilities, excluding variable rate loans, 
at 31 December 2004:
The fair values of the interest rate swaps and long term ﬁxed rate debt have been determined by reference to prices available from the markets
on which the instruments are traded. All the other fair values have been calculated by discounting future cash ﬂows at prevailing interest rates.
Hedge proﬁle - maturity of protection
The maturity of the Group’s ﬁnancial hedging at 31 December 2004 is set out below:
Book value Fair value
£000 £000
Primary ﬁnancial instruments held or issued to ﬁnance the Group’s operations:
Short term ﬁnancial liabilities and current portion of long term borrowings 1,947 2,025
Long term borrowings 269,664 280,487
271,611 282,512
Derivative and other ﬁnancial instruments held to manage the interest rate proﬁle:
Interest rate swaps - 9,347
At 31 December 2004 271,611 291,859
At 31 December 2003 272,726 278,266
2004 2003
£000 £000
Within one year or less - 7,500
Between two and ﬁve years 28,447 13,534
After more than ﬁve years 316,955 209,160
345,402 230,194
Notes
(continued)
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 55 56   Annual Report 2004
Accounts
Amount Amount not Amount Amount not
provided 2004 provided 2004 provided 2003 provided 2003
£000 £000 £000 £000
Group
Capitalised interest 10,619 - 7,305 -
Accelerated capital allowances 12,370 - 6,765 -
Intra-group proﬁts taxed (16,952) - (12,605) -
Tax losses (6,037) (1,200) (1,465) (5,786)
Potential tax on property valuation surplus - 51,456 - 49,595
Capital gains on investment in joint ventures - 338 - -
At 31 December 2004 - 50,594 - 43,809
2004 2003
£000 £000
Authorised
155,000,000 (2003: 155,000,000) ordinary shares of 25p each 38,750 38,750
Allotted, called up and fully paid Number of shares £000
At beginning of year 108,213,432 27,054
Loan notes converted 2,453,219 613
Share options exercised and scrip dividends 634,544 158
At end of year 111,301,195 27,825
The deferred tax balances at 31 December 2004 arose as follows:
No provision has been made for tax arising on the revaluation of properties, since the disposal of properties is not envisaged by the Directors.
Company
The company had no liability to deferred taxation at 31 December 2004 or at the previous year end.
22. Called up share capital
Notes
(continued)
21. Provisions for liabilities and charges 
The movement on the deferred tax balances and other provisions during the year ended 31 December 2004 were as follows:
Deferred 
taxation 2004 Other 2004 Total 2004 Total 2003
£000 £000 £000 £000
Group
At 1 January 2004 - - - -
Capitalised interest 3,314 - 3,314 3,544
Accelerated capital allowances 5,605 - 5,605 1,576
Intra-group proﬁts taxed (4,347) - (4,347) (4,171)
Tax losses (4,572) - (4,572) (949)
At 31 December 2004 - - -- 
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 56 Accounts
Annual Report 2004 57
23. Reserves
24. Commitments and guarantees
Group
Annual commitments under non-cancellable operating leases are as follows:
Share 
premium Merger Revaluation Proﬁt and
account reserve reserve loss account
£000 £000 £000 £000
Group
At beginning of year 136,936 40,177 161,786 (39,161)
Premium on issue of ordinary shares 4,389 - - -
Retained loss for year - - - (6,592)
Revaluation in year:
Group investments and development property - - 43,137 -
Joint venture undertaking - - 1,125 -
Expenses of share issue (1) - - -
Realised on disposal of investment property - - (8,331) 8,331
Transfer in respect of uplifts relating 
to goodwill amortisation - - (803) 803
At end of year 141,324 40,177 196,914 (36,619)
Company
At beginning of year 136,936 40,177 119,110 3,515
Premium on issue of ordinary shares 4,389 - - -
Retained loss for year - - - (371)
Revaluation in year - - 38,041 -
Expenses of share issue (1) - - -
At end of year 141,324 40,177 157,151 3,144
2004 2003
Land and Land and
Buildings Other buildings Other
£000 £000 £000 £000
Operating leases which expire:
Within one year 538 118 -26
Between one and two years - 204 375 138
In the second to ﬁfth years inclusive 61 201 218 126
Over ﬁve years 3,378 2 381 3
3,977 525 974 293
Company
The company acts as guarantor for a number of its subsidiary companies in respect of certain loan facilities and trade creditors. The amounts
included in the creditors of its subsidiaries which were covered by these guarantees amounted to £117.2m at 31 December 2004
(2003: £229.1m).
Notes
(continued)
25. Contingent liabilities
The Group had no contingent liabilities at 31 December 2004.
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 57 58   Annual Report 2004
Accounts
26. Reconciliation of operating proﬁt to operating cash ﬂows
2004 2003
£000 £000
Group operating proﬁt 33,126 14,527
Depreciation and amortisation charges 5,019 8,094
Increase in stocks (10,632) (1,218)
Increase in debtors (8,230) (1,563)
Increase in creditors and provisions 3,680 3,673
Net cash inﬂow from operating activities 22,963 23,513
27. Analysis of cash ﬂows
2004 2003
£000 £000
Returns on investment and servicing of ﬁnance
Interest received 1,137 681
Interest paid (47,768) (32,743)
Gain on reﬁnancing 1,012 -
Net cash ﬂow from returns on investment and servicing of ﬁnance (45,619) (32,062)
Capital expenditure
Purchase of tangible ﬁxed assets (175,695) (178,723)
Disposal of tangible ﬁxed assets 61,008 6,596
Net cash ﬂow from capital expenditure (114,687) (172,127)
Financing
Issue of share capital 900 1
Net receipts on bank loans 150,131 197,324
Movement on loan notes (1,616) (3,909)
Capital element of hire purchase payments (508) (649)
Net cash ﬂow from ﬁnancing 148,907 192,767
Notes
(continued)
28. Analysis of net debt
At 1 January At 31 December
2004 Cash ﬂow Other changes 2004
£000 £000 £000 £000
Cash at bank and in hand 24,980 12,602 - 37,582
Bank overdraft (5,320) (3,766) - (9,086)
19,660 8,836 - 28,496
Financing
Debt due within one year (101,843) 892 4,259 (96,692)
Debt due after one year (510,037) (149,407) (2,681) (662,125)
Hire purchase agreements (1,664) 508 - (1,156)
(613,544) (148,007) 1,578 759,973
Net debt at end of year (593,884) (139,171) 1,578 (731,477)
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 58 Accounts
Annual Report 2004 59
Cash at bank and in hand includes £6.9m (2003: £nil) held in a bank account drawn from a facility put in place in November 2004.
This amount is only available for general Group use once certain criteria are met, which is expected to occur by Autumn 2005.
29. Pension scheme
The group operates a deﬁned contribution pension scheme. The pension cost charge for the period represents contributions payable
by the group to the scheme and amounted to £298,274 (2003: £290,262). Contributions amounting to £26,707 (2003: £nil) were
payable to the scheme at 31 December 2004 and are included in creditors.
30. Related party disclosures
LDC (Project 110) Ltd
During the year, the Group made sales to its joint venture undertaking, LDC (Project 110) Limited, totalling £1,292,000 (2003: nil)
which are included in turnover. In relation to this joint venture, trade debtors includes £155,000 (2003: nil) on standard commercial
terms and other debtors includes £4,278,958 (2003: £nil) which is a non interest bearing loan repayable within 5 years. 
31. Financial instruments and derivatives
The Group has taken advantage of the exemption under FRS13 that short term debtors and creditors be excluded from the following
disclosures.
The Group holds or issues ﬁnancial instruments for two main purposes:
To ﬁnance the development and subsequent long term retention of investment properties; To manage the interest rate risks arising
from its operations and from its sources of ﬁnance.
In addition, various ﬁnancial instruments – such as trade debtors, trade creditors, accruals and prepayments – arise directly from the
Group’s operations. The majority of ﬁnancial instruments are of sterling denominations. The Group does not trade in ﬁnancial
instruments or derivatives.
The Group ﬁnances its development and investment activities through a mixture of retained earnings, borrowings and fresh issues of
equity. The Group borrows from major UK clearing banks and specialist development funding banks at ﬂoating rates of interest, using
derivatives where appropriate to generate the desired effective interest rate basis. The derivatives used for this purpose are principally
interest rate swaps.
The main risks arising from the Group’s ﬁnancial instruments are interest rate risk and market price risk, and to a lesser extent,
currency risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. 
Interest rate risk
The Group’s exposure to interest rate ﬂuctuations on its borrowings and deposits is managed by using interest rate swaps, interest
rate caps and, in some cases, simple ﬁxed rate borrowing. The Group’s policy is separated into three areas:
Notes
(continued)
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 59 60   Annual Report 2004
Accounts
31. Financial instruments and derivatives (continued)
i) Development ﬁnance
The majority of the Group’s development borrowing at 31 December 2004 was held at ﬂoating rate reﬂecting the Group’s view of the stability
of the current interest rate environment and the relatively low cost of adverse interest rate ﬂuctuations in the context of the total development
cost. The Group continues to review the appropriateness of this policy on a regular basis. 
ii) Reﬁnancing risk
The Group’s principal exposure to interest rate ﬂuctuations during development relates to movements in longer term interest rates, which
affect the quantum of debt the property income is capable of servicing at completion. Signiﬁcant adverse movements undermine the Group’s
capital recycling strategy.
The Group manages this risk via a programme of pre-hedging, through the use of forward starting interest rate swaps. 
At 31 December 2004 approximately £17.2m (2003: £124.4m) of the Group’s anticipated reﬁnancing was hedged for an average term of 20.0
years (2003: 20.0 years). This level of hedging has been signiﬁcantly reduced following the re-ﬁnancing programme in 2004.
iii) Medium and long term ﬁnance
The Group holds its medium and long term bank ﬁnance under ﬂoating rate arrangements. The majority of this debt is hedged through the
use of interest rate swap agreements. During 2004, the Group’s policy has been to hedge around 80% of the Group’s exposure for terms of
between 7 and 20 years. Mandatory break options are included within these arrangements to minimise cost. The Group’s bond issuance
attracts a ﬁxed rate of interest over an average life of 18.4 years.
At 31 December 2004, after taking account of interest rate swaps, 89% (2003: 79%) of the Group’s medium and long term borrowing was held
at ﬁxed rates.
This is ﬁxed at an average rate of 6.65% (2003: 6.68%) over an average unexpired term of 13 years (2003: 17 years). 
Liquidity risk
With respect to its development activities, the Directors have adopted a policy whereby the Group injects the full amount of equity required for
each development before drawing debt under associated facilities. In this way, the funding requirements of each scheme are substantially
“ring fenced” and secured at the outset of works.
The Group’s medium term banking facilities are fully revolving, allowing the Group to apply its cash surpluses in the temporary reduction of its
debt obligations.
Market price risk
The Group’s primary market price risk is interest rate exposure. It monitors this exposure through a process of sensitivity analysis, estimating
the effect on operating cash ﬂow over various periods of a range of possible changes in interest rates.
The Group’s policy is to accept a degree of interest rate risk, provided the effects of the various potential changes in rates remain with certain
prescribed parameters.
Currency risk
The Group carries on a small amount of trade in Euros. The Directors do not consider the volumes of this trade signiﬁcant enough to warrant
a formal foreign exchange policy. To the extent that this trade increases in the future, the Directors will implement an appropriate policy.
Fair value of ﬁnancial assets and liabilities
The fair value of the Group’s ﬁnancial assets does not differ from the book value. The fair value of the Group’s ﬁnancial liabilities is disclosed in
note 20 to the accounts.
Gains and losses on hedges
At 31 December 2004, the Group had unrecognised losses on hedges of £9,347,000 (2003: losses of £1,231,000). 
The future recognition of these losses is dependent upon movement in prevailing interest rates, which the Group has not sought to estimate.
Notes
(continued)
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 60 Five year record
Annual Report 2004 61
Five year record
2004 2003 2002 2001 2000
£m £m £m £m £m
Net assets 369.6 326.8 308.1 202.1 85.0
The investment property portfolio 1,110.5 948.8 709.6 373.5 148.7
Net debt 731.5 593.9 410.0 188.3 79.7
Turnover 74.6 48.1 32.9 24.5 30.0
Loss before tax, exceptionals
and goodwill amortisation (1.1) (5.2) (9.1) (2.8) (2.3)
Loss before tax (3.8) (10.8) (25.6) (2.9) (2.3)
Key ratios
Net asset value per share 332p 302p 286p 297p 192p
Loss per share before exceptionals,
goodwill amortisation and deferred tax (1.0)p (4.8)p (10.7)p (5.0)p (5.8)p
Loss per share (3.5)p (10.0)p (30.0)p (3.6)p (6.4)p
Net debt as percentage of
shareholders funds 198% 182% 133% 93% 94%
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 61 Notice is hereby given that the Annual
General Meeting of the Company will be
held at The Horace Cutler Room, London
Marriott Hotel, County Hall, Westminster
Bridge Road, London SE1 7PB at 9.30
a.m. on Thursday, 5 May 2005 for the
purpose of considering and, if thought ﬁt,
passing the following resolutions which, in
the case of resolutions numbered 1 to 7
(inclusive) shall be proposed as ordinary
resolutions and, in the case of resolution
numbered 8, will be proposed as a
special resolution.
Ordinary Business
1 To receive and adopt the Directors’ 
report and ﬁnancial statements for the 
year ended 31 December 2004.
2 To conﬁrm and declare a ﬁnal dividend 
on the ordinary shares for the year 
ended 31 December 2004 of 1.67p per
ordinary share payable to shareholders
on the register at the close of business 
on 15 April 2005.
3 To approve the Directors’ 
Remuneration Report for the year 
ended 31 December 2004.
4 To re-appoint Geoffrey Keggan 
Maddrell as a Director of the Company.
5 To re-appoint Mark Christopher Allan as
a Director of the Company.
6 To re-appoint KPMG Audit Plc as 
auditors in accordance with Section 
384 of the Companies Act 1985 to hold
ofﬁce until the conclusion of the next 
general meeting of the Company at 
which accounts are laid and to 
authorise the Directors to determine 
their remuneration.
Special Business
7 THAT the Directors be generally and 
unconditionally authorised, in 
accordance with Section 80 of the 
Companies Act 1985 (the "Act"), to 
exercise all powers of the Company to 
allot relevant securities (as deﬁned for 
the purposes of that Section) up to a 
maximum nominal amount of 
£9,283,308 provided that this authority 
shall expire on the day ﬁve years after 
the passing of this Resolution (unless 
previously renewed, varied or revoked 
by the Company in general meeting), 
save that the Company may, before 
this authority expires, make an offer of 
agreement which would or might 
require relevant securities to be allotted
after it expires and the directors may 
allot relevant securities in pursuance of 
such an offer or agreement as if this 
authority had not expired and provided 
further that this authority shall 
supersede and revoke all previous 
authorities under Section 80 of the Act. 
8 THAT , in accordance with Section 95 of
the Act, the Directors be given power to
allot for cash equity securities (as
deﬁned for the purpose of Section 89 of
the Act) pursuant to the general
authority conferred on them by
Resolution 10 above as if Section 89(1)
of the Act did not apply to the allotment,
but this power shall be limited:
(a) to the allotment of equity securities 
in connection with an offer or issue to 
or in favour of ordinary shareholders on
the register on a date ﬁxed by the 
Directors where the equity securities 
respectively attributable to the interests 
of all those shareholders are 
proportionate (as nearly as practicable)
to the respective numbers of ordinary 
shares held by them on that date, but 
the Directors may make such 
exclusions or other arrangements as 
they consider expedient in relation to 
fractional entitlements, legal or 
practical problems under the laws in 
any territory or the requirements of any 
relevant regulatory body or stock 
exchange; and
(b) to the allotment (other than under 
(a) above) of equity securities having a 
nominal value not exceeding in 
aggregate £1,392,496
and this authority shall expire at the
conclusion of the next annual general
meeting of the Company after the
passing of this resolution or ﬁfteen
months after the passing of this
resolution, whichever shall be the sooner,
save that the Company may, before this
authority expires, make an offer or
agreement which would or might  require
equity securities to be allotted after it
expires and the Directors may allot equity
securities in pursuance of such offer or
agreement as if this authority had expired
and provided further that this authority
shall supersede and revoke all previous
authorities under Section 95 of the Act.
By order of the Board
A D Reid
Secretary
Dated 16 March 2005
Registered ofﬁce
103 Temple Street
Bristol
BS1 6EN
62   Annual Report 2004
Notice of Annual General Meeting
Notice of Annual General Meeting
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 62 Notes
1 A member entitled to attend and vote at
the meeting is entitled to appoint one or
more proxies to attend and, on a poll, vote
on his/her behalf. A proxy need not be a
member of the Company. A form of proxy is
enclosed with this notice for use at the
meeting.
2 To be valid, the instrument appointing a
proxy (together with the power of attorney or
other authority (if any), under which it is
signed, or a notarially certiﬁed copy of such
power or authority), must be completed in
accordance with the instructions set out on
the form and deposited at or posted to the
ofﬁce of the registrars of the Company,
Computershare Investor Services PLC, The
Pavilions, Bridgewater Road, Bristol BS13
3FB so as to be received not later than 9.30
a.m. on 3 May 2005. Completion and return
of the form of proxy will not preclude
shareholders from attending or voting at the
meeting in person.
3 Pursuant to regulation 34 of the Uncertiﬁed
Securities Regulations 1995, members will
only be entitled to attend and vote at the
meeting if they are registered on the
Company’s register of members 48 hours
before the time appointed for the meeting, or
any adjournment thereof.
4 Copies of the Directors’ service contracts
with the Company are available at the
registered ofﬁce of the Company for
inspection during usual business hours on
any weekday from the date of this notice until
the date of the meeting and also on the day
of the meeting at The Horace Cutler Room,
London Marriott Hotel, County Hall,
Westminster Bridge Road, London SE1 7PB
from 9.15 a.m. until the conclusion of the
meeting.
Notice of Annual General Meeting
Annual Report 2004 63
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 63 Registered ofﬁce
103 Temple Street
Bristol
BS1 6EN
Registered number
3199160
Operations Board
Nicholas Porter
Chief Executive Ofﬁcer
Mark Allan
Group Finance Director
Andrew Lee
Director of Human Resources
Marie Barter
Managing Director
Accommodation Services
Lindsay Stratton
Managing Director
UNITE Modular Solutions
John Tonkiss
Group Development Director
Tim Mitchell
Acquisitions and Development Director
Andrew Reid
Company Secretary
Company information
Company information
Auditors
KPMG Audit Plc
PO Box 695
8 Salisbury Square
London
EC4Y 8BB
Financial adviser and broker
UBS Ltd
1 Finsbury Square
London
EC2M 2PP
Registrars
Computershare Investor Services PLC
PO Box 82
The Pavillions
Bridgwater Road
Bristol
BS99 7NH
www.unite-group.co.uk
UNITE Management
64   Annual Report 2004
8126 UNITE A\R 64pp Interior  18/4/05  11:28  Page 64 Committed to enhancing the 
student experience
By continuing to focus on delivering a ﬁrst class
customer experience, UNITE provides great value,
purpose built, rented accommodation in all the best
locations. We keep in touch with our customers'
dreams, our peoples’ careers and our shareholders’
interests to further our aim of being the ﬁrst choice for
student hospitality.
Moving in The UNITE Group plc
The Tower Building
Twelfth Floor
11 York Road
London SE1 7NX
T 020 7902 5050
F 020 7902 5051
info@unite-group.co.uk
www.unite-group.co.uk
Designed and produced by Proteus  www.proteus-uk.com
The UNITE Group plc
Annual Report
and Accounts 2004
A United Experience
The UNITE Group plc Annual Report and Accounts 2004 A United Experience