Grainger plc
Half year results for the six months ended 31 March 2020
Strong H1 performance; positive lead indicators for H2
- Net rental income up +27%
- Like-for-like rental growth up +3.4%
- LTV at six year low at 32.9%
- No staff furloughed
- Dividend policy maintained, +6% on a per share basis
Helen Gordon, Chief Executive of Grainger, the UK's largest listed residential landlord, said:
“Grainger is in a strong position financially and our portfolio is performing as expected, showing a high degree of resilience during these uncertain times. We have achieved high rent collection, strong rental growth and maintained occupancy levels over 97%. We have continued to grow our business, serve our customers and deliver new rental homes.
“Our business has been focused on three key areas since the coronavirus lockdown: Innovate, Communicate and Improve. We have implemented new ways of serving our customers remotely and enabling safe interactions and property transactions using technology and virtual viewings. We have increased our contact with and support for our customers, suppliers and partners. And we have been investing in training for our employees so that we can emerge from this global crisis stronger.
“Due to the strength of the business and the resilience of our sector, our dividend policy will be maintained, with a +6% increase in our interim dividend.
“Our focus for the rest of the year will remain on the continuity of service to our customers and the delivery of new rental homes, whilst ensuring the health and safety of all our employees, customers and suppliers remains our highest priority.”
Key financial headlines
Resilient rental demand
- 60% of Grainger's income is now derived from PRS assets
- Net rental income1 up +27% to £37.0m in H1 (HY19: £29.1m)
- +3.4% like-for-like rental growth2 in H1 across our entire portfolio (HY19: 3.7%)
- Rent collection for March 2020 of 95% and April 2020 of 94%
- Rental growth in April of +3.3% (PRS: 3.0%; Regulated tenancies: 4.0%)
Robust sales in H1, continuing in H2
- H1 sales generated £22.8m of profits (HY19: £31.3m) with last year having a higher level of asset recycling from our GRIP portfolio
- In line with Government guidelines we took swift action to ensure sales momentum continue into early H2 with new offers received and contracts exchanged. Government guidelines were further relaxed on 13 May 2020.
Pipeline delivery continues and construction sites active
- Our PRS pipeline remains in progress, totalling £2bn of investment and c.9,000 new rental homes
- The majority of our schemes under construction in our secured pipeline are open and active, with a few having temporarily closed in order to implement social distancing and new safety guidelines
Strong balance sheet and liquidity
- £527m of cash and committed undrawn facilities available, a six year high
- LTV at six-year low at 32.9%
- No debt maturities until March 2022
- Cost of debt reduced to 3.0%
Robust H1 performance
- Adjusted earnings3 were in line with expectations at £33.7m (HY19: £38.3m) due to higher levels of asset recycling last year
- Profit before tax3 was £49.6m (HY19: £54.3m)
- Adjusted EPRA earnings 4 were up +9% to £16.0m (HY19: £14.7m)
- Valuation of our total portfolio increased +1.6%
- EPRA Net Tangible Assets (NTA) 4 per share rose to 281p (FY19: 278p)
- Dividend policy maintained with interim dividend per share increased +6% to 1.83p per share5 (HY19: 1.73p), driven by rental growth and investment activity