4.3 Net financing costs/(gains) Accounting policies Net financing costs comprise interest payable on borrowings and interest on lease liabilities, less interest receivable on funds invested (both calculated using the effective interest rate method) and gains and losses on hedging instruments that are recognised in the income statement. 2025 Recognised in the income statement £m Interest income (6.1) Finance income (6.1) Gross interest expense on loans 42.1 Amortisation of fair value of debt recognised on acquisition (2.3) Interest capitalised (26.8) Loan interest and similar charges 13.0 Interest on lease liabilities 7.6 Mark to market changes in interest rate swaps 22.5 Swap cancellation and loan break costs 0.0 Finance costs 43.1 Net financing costs 37.0 The average cost of the Group’s wholly-owned debt at 31 December 2025 is 3.3% (2024: 3.0%). The overall average cost of debt on an EPRA basis is 3.9% (2024: 3.6%). 4.4 Gearing LTV is a key indicator that the Group uses to manage its indebtedness. The Group also monitors gearing, which is calculated using EPRA net tangible assets (NTA) and adjusted net debt. Adjusted net debt excludes IFRS 16 lease liabilities, the unamortised fair value of debt recognised on acquisition and mark to market of interest rate swaps as shown below. The Group’s gearing ratios are calculated as follows: 2025 Note £m Cash and cash equivalents 5.1 35.8 Current borrowings 4.1 - Non-current borrowings 4.1 (1,256.2) Lease liabilities 4.6a (74.3) Interest rate swaps 4.2 44.0 Net debt per balance sheet (1,250.7) Lease liabilities (add back) 4.6a 74.3 Unamortised fair value of debt recognised on acquisition 2.3c 7.9 Adjusted net debt (1,168.5) Reported net asset value 4,733.8 EPRA NTA 2.3c 4,684.9 Gearing Gearing (Basic: net debt / reported net asset value) 26% Adjusted gearing (adjusted net debt / EPRA NTA) 25% Loan to value 2.3a 27% THE UNITE GROUP PLC Annual Report and Accounts 2025 183 2024 £m (16.7) (16.7) 39.0 (4.1) (15.5) 19.4 8.8 0.4 3.1 31.7 15.0 2024 £m 274.3 - (1,273.8) (72.8) 53.4 (1,018.9) 72.8 11.1 (935.0) 4,811.5 4,758.4 21% 20% 24%