Grainger plc
(“Grainger”, the “Group”, or the “Company”)
PROPOSED PLACING
Placing to accelerate PRS growth strategy
Grainger plc, the UK's largest listed provider of private rental housing, today announces a proposed placing (the “Placing”) of up to 61.2 million new Ordinary Shares (“Placing Shares”) representing approximately 9.99% of the Company's issued share capital. The Placing is being conducted through an accelerated bookbuild which will be launched immediately following release of this announcement.
The Placing is expected to raise gross proceeds of approximately £185 million. Including additional debt of approximately £120 million based on Company's LTV target range, this will generate aggregate funding capacity of approximately £305 million. This funding capacity will enable the Company to accelerate its successful PRS growth strategy by committing to a further £246 million of new acquisitions into its secured pipeline. In addition, the £305 million gives the Company headroom to pursue a further £59 million of projects currently in the planning and legal pipeline.
Highlights
- The Placing is expected to enable the Company to accelerate its next phase of growth and bring forward its PRS investment pipeline, retain a robust and disciplined capital structure and enhance shareholder returns.
- The Placing is expected to be accretive to earnings upon stabilisation.
- The Placing will enable the Company to maintain a strong, disciplined balance sheet and operate within its targeted loan-to-value range of 40-45%.
- The Company's progressive dividend policy of distributing the equivalent of 50% of net rental income remains unchanged, and DPS is expected to grow despite the higher share count following the Placing.
Helen Gordon, Chief Executive, said:
“We have real momentum in the business and now is the right time to invest for the future and increase our investment in our secured pipeline. Over the last four years, we have transformed Grainger into the UK's leading provider of private rental homes, with c.9,000 operational rental homes and an attractive and growing pipeline of opportunities for over 9,000 more new private rental homes. Today's placing will enable us to bring forward £246 million of investment for four new schemes, three of which are in strong regional cities, delivering 1,160 new homes, as well as expand our planning and legal pipeline, accelerating the delivery of net rental income and earnings growth.
“The outlook for the UK's private rented sector is positive, with growing customer demand and structural undersupply supporting the investment case. With our deep knowledge and experience in the market, we are able to deliver long-term, sustainable returns through our targeted investment strategy, coupled with our strong operational platform.
“Grainger's integrated owner-operator business model delivers enhanced returns at scale, and today's placing will allow us to further grow our business in high-quality rental homes and deliver great service to our customers, which in turn will drive long-term shareholder value.”