Newcastle-headquartered Grainger plc, the UK’s largest listed residential landlord, announced results for the 12 months ended September 30, 2024, showing 14% growth in Net Rental Income to £110.1 million and a dividend up 14% to 7.55p per share.
Adjusted Earnings were down 6% to £91.6 million “as guided due to our reducing regulated tenancy portfolio and therefore reduced contribution from sales profits.”
Grainger, a leader in the build-to-rent sector, said it now has a £3.4 billion operational portfolio of 11,069 private rental homes and a £1.4 billion build-to-rent pipeline comprising 4,730 new homes.
Grainger CEO Helen Gordon said: “Building on last year’s record, we have delivered another strong year of growth, adding 1,236 new homes to our expanding nationwide portfolio. We added four new communities to our existing clusters in Birmingham, Bristol, London, and Manchester.
“Building on our national footprint of carefully selected locations, we now have meaningful scale in many cities across the country providing good quality rental homes into areas of high demand. We also opened our first scheme in Cardiff, The Copper Works.
“These new homes together with like-for-like rental growth of 6.3% have meant we have once again delivered double digit net rental income growth at 14% ahead of last year’s 12% growth whilst continuing to provide quality homes and communities. For our shareholders this also means a 14% growth in our dividend. We increased EPRA Earnings 21% in the year.
“Customer affordability remains strong at 28%, below the national average of over 34%, and Grainger’s customer satisfaction is higher than ever. 9 in 10 customers tell us that they ‘really like’ their Grainger home.
“This coming year is the last financial year before Grainger converts to a REIT, a major milestone in our transformation to becoming the leader in the UK’s build-to-rent (BTR) sector.
“Since setting out our strategy in 2016, we have invested £2.5bn into delivering new BTR homes, and at the same time delivered value by divesting £2bn from non-core businesses and assets.
“Over this period, we have more than tripled the net rental income for the business. In the last year alone, we have disposed of £274m of non-core assets, recycling £270m of this capital into higher yielding, new, high-quality, energy-efficient BTR homes.
“The delivery of our committed pipeline has the potential to increase EPRA Earnings by another 50% over the medium term, whilst in the near term we expect EPRA Earnings to reach £60m by FY26, a second upgrade from our previous guidance. In addition, we anticipate our EBITDA margin to increase substantially from 54% today to over 60% by FY29.
“We have been pleased to see the new Labour Government’s public rejection of rent controls and the acknowledgement that such controls would hurt supply and investment. On the contrary, it has been pleasing to see the Government’s commitment to increase housing supply and investment. Plans to raise standards in the rental sector plays to Grainger’s strengths as a leading landlord with a best-in-class operating platform and a responsible approach to housing provision.
“The market opportunity for the UK build-to-rent sector is considerable with demand for renting growing and the shortage of rental supply worsening, and with its proven track record, Grainger is best placed to help alleviate this through continued investment and housing delivery, accelerating our growth for years to come.”