41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 36
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THE UNITE GROUP PLC | Annual Report and Financial Statements 2022
FINANCIAL REVIEW continued
OPERATIONS REVIEW continued
Operating costs
The war in Ukraine and other macro-economic factors contributed to inflationary cost pressures during the year. We
are partially protected but not immune from the effects of inflation on our cost base, thanks to our hedging policies and
proactive steps to deliver efficiencies through technology and a review of our operating model. Inflationary pressures,
combined with higher marginal costs from increased occupancy, resulted in a 9% increase in property operating costs
during 2022.
Staff costs increased by £1.2 million due to underlying wage increases and the cost-of-living payment made to employees,
partially offset by savings following the implementation of our new 24/7 operating model during the year. Our new operating
model was implemented in July, with all properties now staffed 24/7 so that students can access in-person support when
they need it. Each property now has a general manager, responsible for all aspects of safety, performance and student
experience in their property.
We hedge our utility costs in advance of letting rooms, providing visibility over our cost base at the point of sale. This policy
helped limit utility cost increases to 4% or £0.9 million during the year. Our utility costs are fully hedged through 2023 and
65% for 2024.
Summer cleaning costs increased by £1.8 million as we returned to a full summer lettings cycle, which delivered incremental
income of £10.3 million. Around 15% of the incremental summer income and costs were attributable to the Commonwealth
Games in Birmingham where we provided accommodation to support services, including the police. Reflecting the increased
summer activity and overall occupancy, marketing costs increased by £0.9 million during the year.
Central and other costs increased by £3.0 million due to inflationary cost increases in respect of buildings insurance, reactive
maintenance, broadband and council tax/HMO licences, as well as targeted investment in learning and development to
support our new operating model.
2022
£m
2021
£m
Staff costs
(29.6)
(28.4)
Utilities
Property operating expenses breakdown
Change
5%
(22.8)
(21.9)
4%
Summer cleaning
(5.1)
(3.3)
55%
Marketing
(6.7)
(5.8)
16%
Central costs
(11.3)
(9.7)
15%
Other
(23.2)
(21.8)
7%
Property operating expenses
(98.7)
(90.9)
9%