Highlights - Excellent performance against all key financial metrics and strong operational progress
Significant rise in net asset values: Triple net asset value (NNNAV) rose 33p (16.9%) to 228p per share and gross net asset value (NAV) rose by 30p (12.4%) to 272p per share compared to September 2013;
Recurring profit before tax increased to £23.1m (March 2013: £14.9m); profit before tax of £49.8m (March 2013: £11.0);
Continued outperformance in our residential UK portfolio: recording a 10.4% increase, compared to a 4.6% average increase across the combined Nationwide and Halifax house price indices;
Continued reduction in consolidated loan to value to 45.2% (September 2013: 48.0%); net debt of £921m (September 2013: £959m);
One-off sale of a home reversion portfolio for £88m, announced in January 2014;
Subsequent to the period, £160m purchase of exceptional London reversionary portfolio;
Highly successful sales launch at Macaulay Walk, Clapham, London.
Robust income streams - sales, rents, fees
Significant profit from sales of £42.8m (March 2013: £34.5m), including £9.9m from the home reversion portfolio sale announced in January;
Vacant sales achieved, on average, at 9.0% above September 2013 values;
Margins on normal trading sales increased to 48.4% (March 2013: 44.7%);
Net rents of £19.5m (March 2013: £27.3m), following significant disposals in 2013 of tenanted properties into joint ventures or associated vehicles;
Gross fee income amounted to £5.1m (March 2013: £6.8m).
Dividend
Interim dividend increased by 5.5% to 0.61p per ordinary share (March 2013: 0.58p).
Robin Broadhurst, Chairman of Grainger plc, commented:
"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 and stable 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."
Andrew Cunningham, Chief Executive of Grainger plc, said:
"We have had a strong start to this financial year. 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 price indices.
"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 such as Macaulay Walk. In turn the cash generated from these sales has enabled us to recycle capital into attractive long term value accretive opportunities."
