Grainger profit up 96% to £299m; record rental income

Grainger CEO Helen Gordon

Newcastle-headquartered Grainger plc, the UK’s largest listed residential landlord, said on Thursday its profit surged in its recent financial year as “record” rental income growth was driven by higher occupancy.

Grainger recorded a 96% jump in pretax profit to £298.6 million in the 12 months that ended September 30.

Grainger said the profit improvement included a £81.2 million valuation uplift from one-off transfers from a trading property to an investment property in the year.

Adjusted earnings rose 12% to £93.5 million.

Grainger declared a 5.97p per share dividend, up 16% from 5.15p last year.

Rental income from Grainger’s portfolio of 9,669 homes increased by 22% to £86.3 million, representing “record” growth of 22%.

Like-for-like rental rate growth was 4.7%, accelerating from 1.0% the year before.

Throughout the year, rent collection averaged 98% and occupancy held above 90%.

EPRA net tangible assets increased 6.7% to 317p from 297p last year due to an uplift in valuations.

However, the company’s net debt increased by 21% to £1.26 billion from £1.04 billion year-on-year.

Grainger CEO Helen Gordon said: “I am pleased to report a very successful year for Grainger, in which we delivered record net rental income growth of 22%, driven by record occupancy, rental growth and lease up of our new schemes.

“Adjusted earnings for the year up 12%, EPRA NTA up 7% and dividend up 16%.

“Our £953m committed pipeline of 3,658 new build-to-rent homes is locked-in, fully-funded and de-risked with fixed construction costs, providing visibility on earnings growth for the next four years.

“On top of this we have the option to proceed with a further £241m of 769 homes in our secured pipeline and we have £599m in our planning and legal pipeline, comprising 2,411 homes. In total, our build-to-rent pipeline stands at £1.8bn and 6,838 new homes.

“We have a strong financial footing with a robust balance sheet. Our debt is 97% hedged with average debt maturities of six and a half years and we have no significant refinancing requirements until 2027.

“All of this puts Grainger in a position of strength to take advantage of the increasing demand for renting homes in the UK.

“Whilst we are mindful of the wider macro-economic environment, we are well positioned for the challenges ahead and our market benefits from positive long-term structural trends.

“Demand for renting continues to grow, supply remains constrained as many small landlords exit the rental market, and we benefit from a resilient customer base.

“The inflation-linked characteristics of our asset class, coupled with our high-quality, energy-efficient and well-located properties, scalable operating platform and unrivalled data, insight and analytics gives us confidence for our continued strong operational performance.”


Reporter: Jaskeet Briah

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