Grainger upbeat as rental income, earnings rise
By Josh White
Date: Thursday 17 Nov 2022
(Sharecast News) - Residential landlord Grainger reported 22% growth in net rental income in its final results on Thursday, to £86.3m.
Adjusted earnings were ahead 12% at £93.5m, as the board hiked the total dividend by 16% to 5.97p per share.
The company recorded 4.7% like-for-like rental growth across its total portfolio in the 12 months ended 30 September, with 3.5% growth in the first half and 5.5% in the second.
Grainger reached a record occupancy rate of 98% in its private rental sector portfolio, adding that its total property return for the year came in at 7.5% due to strong valuation growth of £157m, driven by strong performance on lettings and rental growth.
Its EPRA net tangible assets were up 7% to 317p per share, with the board adding that its debt was 97% hedged, with its average cost of debt of 3.1% expected to "rise marginally" by 20 basis points in the new financial year.
The firm had a weighted average debt maturity of six-and-a-half years, and no significant refinancing requirements until 2027.
"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," said chief executive officer Helen Gordon.
"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."
Gordon said that, while the company was "mindful" of the wider macroeconomic environment, it was "well-positioned" for the challenges ahead, as its market benefitted 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."
At 1034 GMT, shares in Grainger were up 0.76% at 238.6p.
Reporting by Josh White for Sharecast.com.
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