Grainger plc, the UK’s largest listed residential property owner and manager, says it’s ideally placed to take advantage of improving market conditions, after reporting solid half-year results for the six months ended March 31.
The group, which started life in Newcastle in 1912, saw recurring profit before tax increase to £23.1m, compared to £14.9m in the same period last year.
Profit from sales amounted to £42.8m, up from £34.5m, and the firm recorded a 10.4% increase in its UK residential portfolio, compared to a 4.6% average increase across the combined Nationwide and Halifax house price indices.
Grainger plc chairman Robin Broadhurst said: “Following the company’s improved performance in the last financial year, the first half of this year saw Grainger deliver another strong period of outperformance.
“We have seen a significant rise in the value of our assets and have demonstrated our ability to realise this value through our strong sales pipeline.
“As part of our overall strategy, we are broadening our expertise within the residential sector of the property market, with a particular emphasis on developing our exposure to the private rented sector and build to rent, which we see as an opportunity to deliver stable, long-term shareholder returns.”
Grainger employs over 100 people in Newcastle, the rest of its 275 employees being based in London and in offices spread across Manchester, Birmingham and Germany. The firm is responsible for around £25m worth of property in the region.
During the period, triple net asset value rose 16.9% to 228p per share and gross net asset value rose by 12.4% to 272p per share, compared to September 2013. Net rents decreased to £19.5m, compared to £27.3m the year before, following significant disposals of tenanted properties into joint ventures or associated vehicles.
Grainger chief executive Andrew Cunningham said the group’s performance had been influenced both by a strengthening market and through careful management of assets.
“We have had a strong start to this financial year,” he said.
“Our core strategy of focusing on balanced income streams, alongside our targeted geographical asset allocation with a weighting toward London and the South East of England, and our specialist active asset management, has ensured that Grainger has been ideally positioned to take advantage of current favourable market conditions.
“As a result, we have succeeded in delivering an exceptional performance, with our assets continuing to outperform both the Halifax and Nationwide house prices. Our sales performance to the end of March has been particularly encouraging and we anticipate further good performance in the second half based on our sales pipeline and the profits to come from our development activities. In turn, the cash generated from these sales has enabled us to recycle capital into attractive long-term value accretive opportunities.”