Grainger PLC Pre-Close Statement & Capital Markets Day (8980R)
27 September 2017 - 4:00PM
UK Regulatory
TIDMGRI
RNS Number : 8980R
Grainger PLC
27 September 2017
27 September 2017
Grainger plc
Pre-Close Statement & Capital Markets Day
Good end to the year and positive strategic progress
Grainger plc, the UK's largest listed residential landlord,
today provides an update on trading for the year ending 30
September 2017 ahead of its full year results announcement on 30
November 2017.
Helen Gordon, Chief Executive, said:
"It has been a year of significant strategic progress. We have
secured substantial private rented sector ("PRS") investments and
improved our operational platform. We expect to deliver another
period of strong financial performance at our full year results in
November, and our in-house capability to originate, invest in and
operate UK rental homes provides a strong platform for future
growth.
"Our transition to a business focused on the PRS with improved
income returns continues at pace. Our secured PRS pipeline stands
at GBP517m, and has been achieved within 20 months of announcing
our new strategy and GBP850m investment target. It will be
supplemented by our recently announced GBP80m investment at Gore
Street in Salford, and we have a number of other exciting
opportunities in advanced stages."
Financial performance
Trading performance and outturn
We have delivered a strong trading performance in the second
half of the year, with good results from sales and tightly
controlled operational and finance costs. We expect to report
Adjusted Earnings of approaching GBP70m (FY16: GBP53.1m).
Sales of vacant properties have been achieved at c.2% ahead of
the September 2016 year end vacant possession value, and robust
residential sales have been supported by development activity and
as we work through our strategic land sites.
Our year end valuation process is currently underway. We saw
2.1% growth in capital values in the first half of the year and
anticipate a modest further improvement in the second half, in line
with the Board's expectations.
Continued rental growth
We have seen like-for-like rental growth across our portfolio of
3.7% for the eleven months to the end of August. Our PRS portfolio
has seen 3.2% growth and we have seen 4.4% annualised rental growth
in our regulated tenancy portfolio.
Reducing costs
Our focus on managing costs and operating efficiency has
continued and we expect to report a gross to net property operating
cost for the full year of around 26%. We are also on track to
achieve our GBP27.5m overheads target.
Grainger's income return is also benefiting from improved
finance costs and we expect our cost of debt at the period end to
have reduced to 3.5%.
Continued investment in PRS
Our transition to a business focused on the UK private rented
sector ("PRS") continues at pace and our secured investment
pipeline now stands at GBP517m, around 60% of our GBP850m target,
achieved within 20 months of announcing our new strategy. Once our
GBP80m acquisition on Gore Street in Salford goes unconditional
following completion of a building contract, we will reach 70% of
our target.
In total we have GBP341m of schemes in the planning or legal
stages, which if secured will enable us to achieve our GBP850m
target. A further GBP469m of potential schemes are under
consideration.
Capital markets day
We are hosting a capital markets day today, followed by a site
visit to Argo Apartments, a GBP33m, 134 unit PRS scheme in Canning
Town, London. It is due to complete by the end of 2017 and is being
acquired by GRIP REIT plc, our London-focused PRS co-investment
vehicle with APG.
Our update will focus on Grainger's market leading position and
its in-house capability to originate, invest in and operate UK
rental homes.
A presentation will be made available at 14:00 GMT on Grainger
plc's corporate website - www.graingerplc.co.uk. No webcast or
conference call facilities will be available.
No further information will be provided on current trading.
-ENDS-
For further information:
Grainger plc
Helen Gordon/ Vanessa Simms/ Kurt Mueller
London Office Tel: +44 (0) 20 7940 9500
Newcastle Office Tel: +44 (0) 191 261 1819
Camarco (Financial PR adviser)
Ginny Pulbrook / Geoffrey Pelham-Lane
+44 (0) 20 3757 4992/4985
This information is provided by RNS
The company news service from the London Stock Exchange
END
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