REG - Grainger PLC - Half Year Financial Results
15/05/2025 07:00
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RNS Number : 7236I Grainger PLC 15 May 2025
15 May 2025
Grainger plc
Half year financial results
for the six months ended 31 March 2025
Outstanding performance; Accelerating growth;
Delivering shareholder value
§ EPRA Earnings up +23%
§ Net rental income growth of +15%
§ Strong like-for-like rental growth of +4.4%
§ Dividend up +12%
§ Strong demand and high occupancy at 96.0%
§ Property values increasing
§ Excellent outlook
Grainger plc, the UK's largest listed residential landlord and leader in the
build-to-rent (BTR) sector, today announces another period of strong
performance for the six months ended 31 March 2025.
Helen Gordon, Chief Executive, said:
"Grainger has delivered another period of outstanding performance and we are
continuing to deliver growth year-on-year. Earnings(1) are up 23% whilst net
rental income grew 15% compared to this period last year, driven by our new
openings, growth in underlying rents and our ability to leverage our central
costs and operational platform. Our properties are in high demand and our
portfolio remains fully let with occupancy at 96% with a strong customer
demographic base and stable and healthy levels of affordability. The expansion
of our BTR portfolio is accelerating our earnings growth.
"Residential, specifically private rented residential, has proven its
resilience through the cycle compared to other real estate asset classes with
excellent rental growth protecting valuations and we are seeing continued
valuation growth. Investment activity in the build-to-rent sector is very
buoyant with reports of more than £1bn of investment activity in Q1 this
year. Our market is characterised by structural demand drivers,
supply-constrained markets, strong customer demographics and a supportive
regulatory and political backdrop which is aimed at stimulating investment
activity.
"Through the delivery of the first part of our pipeline, our committed
pipeline, we expect to deliver strong like-for-like rental growth and 50%
earnings growth from FY24 to FY29 after fully absorbing the impact of higher
interest costs. We have significant firepower from our non-core portfolio to
fund growth beyond that for our remaining pipeline or additional stabilised
acquisitions.
"Our business is designed to create shareholder value. We operate in a sector
with strong structural tailwinds. Our asset class and specifically our
portfolio and platform, deliver inflation-backed rental growth. Our sector
leading operating platform is scalable and our EBITDA margins are growing
substantially as we deliver our large pipeline. This shareholder value
creation model creates excellent, risk-adjusted returns, with a commitment to
delivering a continued progressive dividend. We are increasing our interim
dividend 12%, reflecting our outstanding performance."
HY25 HY24 Change
Net rental income(2) (Note 5) £61.3m £53.2m +15%
EPRA Earnings £30.2m £24.5m +23%
Adjusted earnings(3) (Note 2) £50.1m £44.4m +13%
IFRS profit before tax(3) (Note 2) £74.0m £(31.2)m +337%
Earnings per share (diluted, after tax) (Note 10) 7.5p (3.0)p +350%
Dividend per share(4) (Note 11) 2.85p 2.54p +12%
Total Property Return(5) 2.5% (0.4)% +286bps
Total Accounting Return (Note 3) 1.3% (2.9)% +419bps
HY25 FY24 Change
EPRA NTA per share (Note 3) 300p 298p +1%
Net debt £1,475m £1,453m +2%
Group LTV 38.5% 38.2% +35bps
Cost of debt (average) 3.1% 3.2% (4)bps
HIGHLIGHTS
Delivering excellent rental growth through our best-in-class operational
platform
§ Increased net rental income by 15% to £61.3m (HY24: £53.2m)
§ Delivered 4.4% like-for-like rental growth (FY24: 6.3%) with BTR(6) rental
growth 4.2% (new lets 3.1% and renewals 4.9%), whilst regulated tenancy rental
growth was 7.0%
§ Strong demand; achieved high occupancy at 96.0% (FY24: 97.4%)
§ Strong customer demographic base with 89% between ages 20-44 from a broad,
robust employer base
Accelerating earnings growth, demonstrating our ability to leverage our
operational platform
§ EPRA Earnings increased 23% to £30.2m (HY24: £24.5m)
§ Our committed pipeline, with only £166m remaining to invest, will grow
FY24 EPRA Earnings by 25% to FY26 and 50% by FY29 even after absorbing higher
interest costs over the period
§ Interim dividend increased 12% to 2.85p per share (HY24: 2.54pps)
Strong investment market and valuations growing
§ £1.1bn of BTR investment activity seen in Q1(7), forecast to be £6bn for
2025(8)
§ Property valuations have continued to increase, with EPRA NTA up 1% to 300p
Self-funded growth
§ Significant firepower of £1.1bn of low-yielding, non-core assets to fund
future growth
§ Adjusted Earnings grown by 13% to £50.1m, which includes sales profits
(HY24: £44.4m)
§ Strong sales of regulated tenancies achieving vacant sales in line with
valuations
Attractive market dynamics
§ Rental demand expected to grow by 20% between 2021 and 2031(9)
§ Supply of rental housing remains constrained and expected to worsen
§ Opportunity to grow market share as BTR represents only 2.3% of total
rental market(10)
§ Political support for BTR
Strong balance sheet to support growth
§ Fixed low debt cost with no material refinancing required until 2029
§ Highly cash generative business with c.£200m+ pa
§ LTV forecast to reduce over time
§ Ability to absorb future implied interest rates and continue to deliver
earnings growth
REIT conversion on track for FY26
§ On track to convert to a REIT for FY26; enhancing total returns by c.50bps
and delivering corporation tax savings of c.£15m in the first year and
growing thereafter, whilst supporting our strategy and growth prospects
§ Commitment to deliver continued progressive dividend returns
Excellent outlook, delivering shareholder value
§ Strong underlying market conditions with ongoing undersupply as demand
grows
§ Strong like-for-like rental growth expected to continue, supported by
inflation
§ Sector-leading operating platform will drive further efficiencies to
deliver EBITDA margin expansion from 54% to 60%
§ Continuing strong year-on-year compounding earnings growth
§ Buoyant investment activity in the BTR sector will continue to support
property valuations
Our £1.3bn Build-to-Rent Pipeline
Committed pipeline
Investment value £413m
Remaining cost to complete £166m
Homes 1,180
Secured pipeline
Investment value £541m
Homes 2,044
Planning & legal pipeline
Investment value £370m
Homes 1,341
Total pipeline
Investment value £1,324m
Homes 4,565
ESG Awards and benchmarks
FTSE4Good Constituent since 2010
CDP 'B' for Climate Change; 'B-' for water
MSCI ESG 'AA' Rating
ISS-oekom 'Prime' rating
GRESB Public Disclosure 'A' rating
Sustainalytics 'Low risk'; 2025 ESG Top Rated company
Dow Jones 'Best-in-Class' indices constituent
S&P Global Sustainability Assessment 93 percentile
Workforce Disclosure Initiative 98% score
EPRA Sustainability Best Practice Reporting Gold
EPRA Societal Awards Outstanding Contribution to Society 2023 Winner
FTSE Women Leaders 2(nd) in Real Estate; 19(th) in FTSE250
National Equality Standard Achieved in 2024
( )
( )
(1) EPRA Earnings
(2) Refer to Note 5 for net rental income calculation.
(3) Refer to Note 2 for IFRS profit before tax and adjusted earnings
reconciliation.
(4) Dividend - The dividend of 2.85p per share (gross) amounting to £21.0m
will be paid on 7 July 2025 to shareholders on the register at the close of
business on 23 May 2025. Shareholders will again be offered the option to
participate in a dividend re-investment plan and the last day for election is
9 June 2025 - refer also to Note 11.
(5) Total Property Return (TPR) represents the change in gross asset value,
net of capital expenditure incurred, plus net income, expressed as a
percentage of gross asset value.
(6) Previously referred to as PRS
(7) Knight Frank, BTR Market Update Q1 2025
(8) LSH Built to Last report, 1 May 2025
(9) Savills using English Housing Survey data
(10) ONS, Northern Ireland Statistics & Research Agency, BPF, Savills
Future reporting dates
§ Trading Update - September 2025
§ Full year results - 20 November 2025
Half year results presentation
Grainger plc will be holding a presentation of the results at 9:00am (UK time)
today, 15 May 2025, which can be accessed via webcast and a telephone dial-in
facility (details below), which will be followed by a live Q&A session for
sell side analysts and shareholders.
Webcast details:
To view the webcast, please go to the following URL link. Registration is
required.
https://brrmedia.news/GRI_HY_25 (https://brrmedia.news/GRI_HY_25)
The webcast will be available for six months from the date of the
presentation.
Conference call details:
Call: +44 (0) 33 0551 0200
Quote "Grainger Half Year" when prompted by the operator
*Please note that Live Questions can be submitted by analysts and investors
via the webcast, but not via the conference call facility.
Presentation material:
A copy of the presentation slides will also be available to download on
Grainger's website (http://corporate.graingerplc.co.uk/
(http://corporate.graingerplc.co.uk/) ) from 08:30am (UK time).
For further information, please contact:
Investor relations
Kurt Mueller, Grainger plc:
+44 (0) 20 7940 9500
Media
Ginny Pulbrook / Geoffrey Pelham-Lane, Camarco:
+44 (0) 20 3757 4992 /
4985
Forward-looking statements disclaimer
This announcement contains certain forward-looking statements. Any statement
in this publication that is not a statement of historical fact including,
without limitation, those regarding Grainger plc's (Grainger) future financial
condition, business, operations, financial performance and other future events
or developments involving Grainger, is a forward-looking statement. Such
statements may, but not always, be identified by words such as 'expect',
'estimate', 'project', 'anticipate', 'believe', 'should', 'intend', 'plan',
'could', 'probability', 'risk', 'target', 'goal', 'objective', 'may',
'endeavour', 'outlook', 'optimistic', 'prospects' and similar expressions or
variations on these expressions. By their nature, forward-looking statements
involve inherent risks, assumptions and uncertainties as they relate to events
which occur in the future and depend on circumstances which may or may not
occur and go beyond Grainger's ability to control. Actual outcomes or results
may differ materially from the outcomes or results expressed or implied by
these forward-looking statements. Factors which may give rise to such
differences include (but are not limited to) changing economic, financial,
business, regulatory, legal, political, industry and market trends, house
prices, competition, natural disasters, terrorism or other social, political
or market conditions.
Grainger's principal risks are described in more detail in its Annual Report
and Accounts, set out in the Risk Management report on pages 62-67 of the 2024
Annual Report and Accounts, and there has been no change.
A number of risks faced by the Group are not directly within our control such
as the wider economic and political environment.
In line with our risk management approach detailed in our Annual Report and
Accounts, the key risks to the business are under regular review by the Board
and management, applying Grainger's risk management framework. It is
currently considered that the principal risks previously reported remain our
principal risks and uncertainties. The risks to Grainger will continue to be
monitored closely as well as the potential controls and mitigants that may be
applied.
These risks and other factors could adversely affect the outcome and financial
effects of the events specified in this announcement. The forward-looking
statements reflect knowledge and information available at the date they are
made, and Grainger does not intend to update on the forward-looking statements
contained in this announcement.
This announcement is for information purposes only and no reliance may be
placed upon it. No representation or warranty, either expressed or implied, is
provided in relation to the accuracy, completeness or reliability of the
information contained in this announcement. Past performance of securities in
Grainger cannot be relied upon as a guide to the future performance of such
securities.
This announcement does not constitute an offer for sale or subscription of, or
solicitation of any offer to buy or subscribe for, any securities of Grainger
plc.
Chief Executive's review
Outstanding performance; accelerating growth
We have again delivered an outstanding performance.
We increased net rental income by 15%, driven by new openings and
like-for-like rental growth of 4.4%. By leveraging our central costs and our
sector-leading operational platform, we accelerated EPRA Earnings by 23%,
demonstrating the compounding nature of our business. We are increasing
dividend 12%, reflecting our strong performance.
Our £413m committed pipeline of 1,180 homes, with £166m remaining left to
spend, will increase FY24 EPRA Earnings by 50% to FY29 even after fully
absorbing higher interest rates.
We have c.£1.1bn of low-yielding non-core assets to fund our continued growth
through either our remaining pipeline of 4,565 homes or opportunistic
opportunities.
We operate in one of the strongest and most resilient real estate markets in
the UK. The private rental market in the UK faces growing demand, severe
supply constraints, and political support for BTR as a means to deliver new
homes and raise housing standards.
We have always espoused the resilience of UK residential and this was proven
again during the past cycle where strong rental growth broadly offset yield
expansion. We have now returned to growth and have seen our second consecutive
period of valuation growth. EPRA net tangible assets were up 1% to 300pps. The
BTR investment market is very buoyant with over £1bn of investment activity
reported in Q1 1 (#_ftn1) , supporting valuations.
Our sector-leading operational platform continues to deliver excellent
performance and service
Our operational platform is designed for scale. As we grow, we will accelerate
earnings growth and are able to further enhance our service to our customers.
Our newly upgraded customer App, 'MyGrainger', is a great example. It provides
customers with enhanced functionality enabling them to more efficiently and
effectively enjoy their homes and live their lives.
Having great properties in great locations is essential for a successful
property business, but the platform is what drives outperformance. Demand for
our homes remains high and with occupancy at 96%, our portfolio remains fully
let. We are seeing high levels of demand across all locations in our national
portfolio. Customers want to stay with us, with a retention rate of 62% and an
average length of stay of nearly three years. We retained strong like-for-like
total rental growth over the past six months at 4.4%, whilst customer
affordability remained healthy at 28% of gross income. The demographics of our
target customer base underpins the resilience and strength of our rental
income with 89% of our customers aged between 20-44 in good, reliable jobs who
typically see above-average wage growth.
The nature of our fully-integrated platform allows us to harness data into
actionable insights to enable us to continually improve efficiencies and
customer service. Our CONNECT technology platform is a key differentiator, and
we are increasingly utilising AI, most recently to monitor customer sentiment
across our national portfolio in real time.
Self-funding our growth
We have £1.1bn of low-yielding, non-core assets which provide us firepower to
reinvest into higher yielding BTR assets and continue to grow for years to
come.
We continue to successfully work through our regulated tenancy portfolio.
Vacant sales performance remains strong, with sales prices broadly in line
with valuations at (0.1)%. We are able to accelerate this wind down through
the sale of tenanted properties (investment sales), which we have increased
over recent years as part of our accelerated asset recycling programme. These
investment sales are equally performing well, albeit we are unable to capture
the reversionary uplift on vacancy in these instances. Sales proceeds during
the past six months totalled £79m, demonstrating the significant cash we are
able to generate, typically in the order of c.£200m per annum.
A positive political and regulatory backdrop
The UK Labour Government is proving its commitment to supporting economic
growth and investment, specifically by stimulating new housing delivery. We
are heavily engaged in positive dialogue with policy makers and there is
clear, strong support for BTR, recognising the important contribution
businesses like Grainger can make to the UK housing market. Proposals to
improve and speed up the planning process are welcome, as are proposals to
strengthen recognition for BTR within the planning system.
The Renters' Rights Bill, entering its final stages of debate and scrutiny in
the House of Lords, will professionalise the rental market and raise
standards, something that Grainger has been forging the way forward for many
years. Grainger, in the main, is already aligned to the new legislative
landscape with our focus on high management standards, good quality customer
service and high-quality, energy efficient properties. We are very well
positioned to continue to perform strongly. That said, it is likely that many
smaller, private individual landlords will find the new regime challenging and
will therefore accelerate their exit from the market, further constraining
supply.
As we have stated previously, we have fully provided for the very limited
number of cladding remediation issues within our portfolio. The vast majority
of our portfolio has been built post-Grenfell and the majority of the facades
are brickwork. The timing of our pipeline projects means that we have been
insulated from delays associated with the Building Safety Regulator approval
process.
Clarity on the Renters Rights Bill, a resolute commitment from Government
opposing rent controls, and support from Government for growing the BTR sector
means Grainger is in a strong position to continue to grow.
Leading through responsibility
We continue to make great strides in our environmental and social impact.
95% of our BTR portfolio is now EPC rated A-C, in line with future minimum
standards. Our energy efficient properties are not only better for the
environment but, importantly, they support our customers' affordability by
enabling them to keep their energy costs down.
Our environmental targets were approved by the Science Based Target Initiative
(SBTi) during the period, confirming that they are robust and aligned to the
1.5 degree reduction pathway.
We were recognised once again for our commitment to diversity, equality and
inclusion, building on our National Equality Standard accreditation, we were
ranked 2(nd) place in the real estate sector in the FTSE Women Leaders Review,
and 19(th) position overall in the FTSE250.
Exciting outlook, delivering shareholder value
We are on track and ready to convert to a REIT in September this year ready
for FY26, a significant milestone in our strategy to reposition to a BTR
rental investment business.
The BTR market continues to grow strongly supporting our growth ambitions,
whilst consumer demand for renting accelerates. At the same time, housing
supply remains well below demand and is set to remain so for many years to
come.
Our growth ambitions remain unabated. Our platform which is designed for
scale, our significant pipeline, our firepower from non-core assets and the
strong levels of activity in the BTR investment market provides us with great
confidence for delivering accelerated growth ahead.
Our committed pipeline alone will see us delivering earnings growth
year-on-year, increasing by 25% from FY24 to FY26 and by 50% by FY29, even
after fully absorbing higher interest rate costs. This excludes the projects
in our remaining pipeline or any attractive stabilised acquisitions that may
arise.
Our business is designed to create shareholder value. We operate in a sector
with strong structural tailwinds. Our asset class and specifically our
portfolio and platform, deliver inflation-backed rental growth. Our sector
leading operating platform is scalable and our EBITDA margins are growing
substantially as we deliver our large pipeline. EPRA Earnings are set to grow
by 50% by FY29 even after absorbing higher interest rates. This is underpinned
by our growth funding engine as we continue to dispose of our low-yielding
regulated tenancy portfolio and non-core assets. This shareholder value
creation model creates excellent, risk-adjusted returns, with a commitment to
delivering a continued progressive dividend.
We are looking forward to welcoming many new customers to their new Grainger
home as we open the doors at our new schemes in London and Bristol later this
year.
Helen Gordon
Chief Executive
14 May 2025
Financial review
The first six months of FY25 continued to deliver strong results on the back
of our excellent performance as a business. Strong demand for our homes
continues with fully let occupancy levels at 96.0% and total like-for-like
rental growth remains at a healthy level of 4.4%. The strong occupational
market combined with the opening of new schemes has resulted in a significant
increase in net rents of 15%. The operating leverage in our business model,
which is built for scale, means this revenue growth results in even higher
earnings growth with EPRA earnings up 23%.
Valuations to 31 March 2025 have continued to grow, up 1% in the period
despite the difficult current macro-economic conditions, with yields largely
remaining flat.
Our balance sheet is well positioned and continues to reflect our strong
liquidity position. Our committed pipeline is fully funded and fully hedged,
giving us minimal exposure to interest rate rises for the next 3 ½ years. In
line with the strong underlying performance of the business we increase our
interim dividend per share to 2.85p on a per share basis (HY24: 2.54p), up 12%
as we continue to deliver strong, sustainable dividend growth.
With new openings and our committed pipeline, we are seeing and have great
visibility on net rental income growth. Our guidance is maintained based off
our strong near-term earnings growth to deliver an EPRA earnings target of
£60m by FY26. Beyond this, we will continue to deliver strong compounding
earnings growth for years to come.
Highlights
Income returns HY25 HY24 Change
Rental growth (like-for-like) 4.4% 8.0% (355)bps
- PRS 4.2% 8.1% (392)bps
- Regulated tenancies (annualised) 7.0% 7.1% (8)bps
Net rental income (Note 5) £61.3m £53.2m +15%
Adjusted earnings (Note 2) £50.1m £44.4m +13%
EPRA earnings (Note 3) £30.2m £24.5m +23%
IFRS profit/(loss) before tax (Note 2) £74.0m £(31.2)m +337%
Earnings/(loss) per share (diluted, after tax) (Note 10) 7.5p (3.0)p +350%
Dividend per share (Note 11) 2.85p 2.54p +12%
Capital returns HY25 HY24 Change
Total Property Return 2.5% (0.4)% +286bps
Total Accounting Return 1.3% (2.9)% +419bps
HY25 FY24 Change
EPRA NTA per share (Note 3) 300p 298p +1%
Net debt £1,475m £1,453m +2%
Group LTV 38.5% 38.2% +35bps
Cost of debt (average) 3.1% 3.2% (4)bps
Reversionary surplus £139m £147m (5)%
Income statement
Strong increase in net rental income of £8.1m has resulted in improving
adjusted earnings increasing by 13% to £50.1m (HY24: £44.4m). Profits from
sales were in line with the prior year as we continue to divest from our
regulated tenancy portfolio and focus on growing recurring net rental income.
Overheads increased in line with wage inflation as we remain focused on cost
control, whilst interest costs increased by £3.1m due to higher average debt
levels during the period. EPRA earnings, which is an increasingly important
metric for our business, continued to deliver very strong growth and was up
23% to £30.2m (HY24: £24.5m). The valuation movement was £28.7m with other
adjustments of £4.8m including a derivative valuation movement of £2.9m and
an additional £1.9m fire safety provision. This resulted in IFRS profits for
the period of £74.0m.
Income statement (£m) HY25 HY24 Change
Net rental income 61.3 53.2 +15%
Mortgage income (CHARM) (Note 16) 2.1 2.3 (9)%
Management fees and other income 4.7 3.5 +34%
Overheads (16.9) (16.2) (4)%
Pre-contract costs (0.3) (0.7) +57%
Net finance costs (20.8) (17.7) (18)%
Joint ventures and associates 0.1 0.1 -
EPRA earnings 30.2 24.5 +23%
Profit from sales 19.9 19.9 -
Adjusted earnings 50.1 44.4 +13%
Underlying valuation movements 28.7 (16.8) +138%
MDR valuation movement - (58.8) +100%
Other adjustments (4.8) - (100)%
IFRS profit/(loss) before tax 74.0 (31.2) +337%
Rental income
Net rental income increased by 15% to £61.3m (HY24: £53.2m), a continuation
of the high levels of growth in recent years. The £8.1m increase was driven
by continued high occupational demand for our homes resulting in both strong
lettings of new launches and continued rental growth.
Overall like-for-like rental growth remains robust at +4.4%, with rental
growth in our PRS portfolio continuing to deliver healthy growth at +4.2%
(HY24: +8.1%), with rental growth on renewals of +4.9% and +3.1% on new lets.
Our regulated tenancy portfolio also delivered strong rental growth at +7.0%
(HY24: +7.1%). Gross to net for our stabilised portfolio has remained at a
resilient level of 25.0% (FY24: 25.0%) as we continue to deliver the
efficiency benefits of our scale and clustering model.
£m
HY24 Net rental income 53.2
Disposals (3.1)
PRS investment 10.3
Rental growth 0.9
HY25 Net rental income 61.3
YoY growth +15%
Sales
Our disposals programme continued to deliver throughout the period with
overall sales revenue of £79.0m exceeding the prior period (HY24: £71.1m).
Sales profits were flat at £19.9m (HY24: £19.9m) as demand for our
properties remains strong.
Residential sales
Vacant sales delivered £9.9m of profit (HY24: £10.6m). The 7% reduction in
vacant property sales in the period reflects the reducing portfolio size of
our regulated tenancy portfolio as part of our strategic divestment and
recycling capital into higher yielding BTR assets. Vacancy rates within our
regulated tenancy portfolio, driving sales, were 6.5% (HY24: 6.8%) with
margins lower than in the prior year reflecting the mix of assets becoming
vacant. Pricing achieved remained robust with sales values within 0.1% of
previous vacant possession value.
Sales of tenanted and other properties delivered £10.0m of profit (HY24:
£8.4m) from £50.4m of revenue (HY24: £49.2m). There were no development
sales in the period (HY24: £0.9m) as we continue to work through sales of our
remaining legacy land portfolio.
Sales
HY25 HY24
Units sold Revenue Profit Units sold Revenue Profit
£m £m £m £m
Residential sales on vacancy 53 28.6 9.9 53 21.0 10.6
Tenanted and other sales 189 50.4 10.0 146 49.2 8.4
Residential sales total 242 79.0 19.9 199 70.2 19.0
Development activity - - 0.9 0.9
Overall sales 242 79.0 19.9 199 71.1 19.9
Balance sheet
Maintaining a strong balance sheet from which to execute our growth strategy
remains an absolute priority, and we are in good shape. Our LTV is 38.5%
(FY24: 38.2%) and liquidity is strong with cash and available facilities of
£545m. Our committed pipeline is fully funded and our debt costs are fully
hedged, meaning we have minimal exposure to potential interest rate rises.
Market value balance sheet (£m) HY25 FY24
Residential - PRS 2,788 2,708
Residential - regulated tenancies 545 591
Residential - mortgages (CHARM) 53 57
Forward Funded - PRS work in progress 260 266
Development work in progress 85 84
Investment in JVs/associates 94 91
Total investments 3,825 3,797
Net debt (1,475) (1,453)
Other liabilities (52) (48)
EPRA NRV 2,298 2,296
Deferred and contingent tax - trading assets (70) (76)
Exclude: intangible assets (2) (2)
EPRA NTA 2,226 2,218
Add back: intangible assets 2 2
Deferred and contingent tax - investment assets (123) (113)
Fair value of fixed rate debt and derivatives 79 88
EPRA NDV 2,184 2,195
EPRA NRV pence per share 309 309
EPRA NTA pence per share 300 298
EPRA NDV pence per share 294 295
EPRA NTA remained robust, increasing 1% from the year end to 300p per share
(FY24: 298p per share). The 4p contribution from EPRA earnings was offset by
the payment of our final dividend (5)p. EPRA NTA excludes the value of our
reversionary surplus of £139m or 19p per share (FY24: £147m).
EPRA NTA movement £m Pence per share
EPRA NTA at 30 September 2024 2,218 298
Net rents, fees & income 65 9
Overheads & finance costs (38) (5)
EPRA earnings 27 4
Valuations (trading & investment property) 26 4
Dividend, tax & other (45) (6)
EPRA NTA at 31 March 2025 2,226 300
Property portfolio valuations
Our portfolio values increased by 0.8% (HY24: (0.3)%) over the six-month
period. Our BTR portfolio saw strong ERV growth of 1.7% with yields remaining
largely flat. Our regional PRS portfolio outperformed London marginally with
stronger ERV growth of 1.9% compared to 1.6% in London. The regulated
portfolio again proved its resilience with a 0.4% increase in the six month
period.
Portfolio Region Capital Value Total Valuation movement
£m £m %
PRS London & SE 1,341 13 1.0%
Regions 1,447 16 1.1%
PRS Total 2,788 29 1.0%
Regulated Tenancies London & SE 469 0 -
Regions 76 2 2.2%
Regulated Total 545 2 0.4%
Operational Portfolio 3,333 31 0.9%
Development 345 (2) (0.7)%
Total Portfolio(1) 3,678 29 0.8%
(1) Excluding CHARM and Vesta.
Financing and capital structure
Net debt increased to £1,475m (FY24: £1,453m) in line with plan as we
invested £64m into our pipeline which was offset by £83m of sales in the
period. Going forward we expect net debt to be broadly flat with sales
offsetting our pipeline capex.
LTV now stands at 38.5% (FY24: 38.2%) with our average cost of debt marginally
decreasing compared to the full year at 3.1% (FY24: 3.2%). We have an average
debt maturity of over four years including extension options. Our refinancing
risk is minimal with £545m in headroom and no material refinancing required
until 2029.
We plan to reduce our debt and LTV over the medium term. We will manage the
quantum of this deleveraging to ensure that we offset the impact of higher
interest rates and continue to deliver strong, compounding earnings growth.
HY25 FY24
Net debt £1,475m £1,453m
Loan to value 38.5% 38.2%
Cost of debt (average) 3.1% 3.2%
Headroom £545m £509m
Weighted average facility maturity 4.3 4.7
Hedging 97% 95%
Summary and outlook
Our business continues to deliver resilient growth, once again evident in the
period. Strong demand for our product combined with the delivery of new
pipeline schemes drove growth in our net rental income. With the strong
operational leverage in our business model this drives even larger growth in
our EPRA Earnings which are set to grow strongly delivering compounding growth
for many years to come. With our balance sheet in good shape and the strong
operational cashflow that our business creates, we are well placed to take
advantage of any opportunities to accelerate growth further.
Rob Hudson
Chief Financial Officer
14 May 2025
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
§ the condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted for use in the UK;
§ the interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
Helen
Gordon
Rob Hudson
Chief Executive
Officer
Chief Financial Officer
14 May
2025
14 May 2025
Independent Review Report to Grainger plc
Conclusion
We have been engaged by Grainger plc ("the Group") to review the condensed set
of financial statements in the half-yearly financial report for the six months
ended 31 March 2025 which comprises the Condensed Consolidated Income
Statement, the Condensed Consolidated Statement of Other Comprehensive Income,
the Condensed Consolidated Statement of Financial Position, the Condensed
Consolidated Statement of Changes in Equity, the Condensed Consolidated
Statement of Cash Flows and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 March 2025 is not prepared, in
all material respects, in accordance with IAS 34 Interim Financial Reporting
as adopted for use in the UK and the Disclosure Guidance and Transparency
Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the
UK. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other
information contained in the half-yearly financial report and consider whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in Note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Craig Steven-Jennings
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
Canary Wharf
London
E145GL
14 May 2025
Consolidated income statement
Unaudited
For the 6 months ended 31 March Notes 2025 2024
£m
£m
Group revenue 4 136.4 113.7
Net rental income 5 61.3 53.2
Profit on disposal of trading property 6 20.2 19.9
Loss on disposal of investment property 7 (0.3) -
Income from financial interest in property assets 16 1.5 0.8
Fees and other income 8 4.7 3.5
Administrative expenses (16.9) (16.2)
Other expenses (2.2) (0.7)
Reversal of impairment of inventories to net realisable value 13 1.0 0.4
Operating profit 69.3 60.9
Net valuation gain/(loss) on investment property 12 28.2 (73.8)
Hedge ineffectiveness under IFRS9 20 (2.9) -
Finance costs 9 (22.4) (19.2)
Finance income 9 1.6 1.5
Share of profit/(loss) of associates after tax 14 0.4 (0.5)
Share of loss of joint ventures after tax 15 (0.2) (0.1)
Profit/(loss) before tax 2 74.0 (31.2)
Tax (charge)/credit for the period 21 (18.6) 9.2
Profit/(loss) for the period attributable to the owners of the Company 55.4 (22.0)
Basic earnings/(loss) per share 10 7.5p (3.0)p
Diluted earnings/(loss) per share 10 7.5p (3.0)p
Consolidated statement of comprehensive income
Unaudited
For the 6 months ended 31 March Notes 2025 2024
£m
£m
Profit/(loss) for the period 2 55.4 (22.0)
Items that will not be transferred to the consolidated income statement:
Actuarial loss on BPT Limited defined benefit pension scheme 22 (0.1) (0.2)
Items that may be or are reclassified to the consolidated income statement:
Changes in fair value of cash flow hedges 0.2 (17.3)
Other comprehensive income and expense for the period before tax 0.1 (17.5)
Tax relating to components of other comprehensive income:
Tax relating to items that will not be transferred to the consolidated income 21 - 0.1
statement
Tax relating to items that may be or are reclassified to the consolidated 21 (0.1) 4.3
income statement
Total tax relating to components of other comprehensive income (0.1) 4.4
Other comprehensive income and expense for the period after tax - (13.1)
Total comprehensive income and expense for the period attributable to the 55.4 (35.1)
owners of the Company
Consolidated statement of financial position
Unaudited Audited
31 March 2025 30 Sept
2024
As at Notes £m £m
ASSETS
Non-current assets
Investment property 12 3,035.9 2,996.8
Property, plant and equipment 9.9 10.6
Investment in associates 14 15.3 14.9
Investment in joint ventures 15 78.5 76.4
Financial interest in property assets 16 53.2 57.4
Retirement benefits 22 6.4 6.5
Deferred tax assets 21 6.8 6.1
Intangible assets 2.2 1.8
3,208.2 3,170.5
Current assets
Inventories - trading property 13 310.6 331.6
Investment property - held for sale 12 66.2 31.5
Trade and other receivables 17 51.0 90.9
Derivative financial instruments 20 21.1 19.8
Current tax assets 3.7 5.2
Cash and cash equivalents 74.9 93.2
527.5 572.2
Total assets 3,735.7 3,742.7
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings 20 1,562.8 1,592.9
Trade and other payables 18 6.0 6.3
Provisions for other liabilities and charges 19 0.7 1.0
Deferred tax liabilities 21 131.3 121.5
1,700.8 1,721.7
Current liabilities
Trade and other payables 18 107.6 114.1
Provisions for other liabilities and charges 19 14.1 13.2
121.7 127.3
Total liabilities 1,822.5 1,849.0
NET ASSETS 1,913.2 1,893.7
EQUITY
Issued share capital 37.2 37.2
Share premium account 817.9 817.9
Merger reserve 20.1 20.1
Capital redemption reserve 0.3 0.3
Cash flow hedge reserve 4.5 4.4
Retained earnings 1,033.2 1,013.8
TOTAL EQUITY 1,913.2 1,893.7
Consolidated statement of changes in equity
Notes Issued Share Merger Capital Cash flow Retained Total
share
premium account
reserve
redemption
hedge
earnings
equity
capital
£m
£m
reserve
reserve
£m
£m
£m
£m
£m
Balance as at 1 October 2023 37.2 817.8 20.1 0.3 20.0 1,033.2 1,928.6
Loss for the period 2 - - - - - (22.0) (22.0)
Other comprehensive expense for the period - - - - (13.0) (0.1) (13.1)
Total comprehensive expense - - - - (13.0) (22.1) (35.1)
Purchase of own shares - - - - - (0.1) (0.1)
Share-based payments charge 23 - - - - - 1.2 1.2
Total comprehensive expense - - - - - (32.2) (32.2)
Total transactions with owners recorded directly in equity - - - - - (31.1) (31.1)
Balance as at 31 March 2024 37.2 817.8 20.1 0.3 7.0 980.0 1,862.4
Profit for the period - - - - - 53.2 53.2
Other comprehensive expense for the period - - - - (2.6) (2.2) (4.8)
Total comprehensive income - - - - (2.6) 51.0 48.4
Award of SAYE shares - 0.1 - - - - 0.1
Share-based payments charge - - - - - 1.6 1.6
Dividends paid - - - - - (18.8) (18.8)
Total transactions with owners recorded directly in equity - 0.1 - - - (17.2) (17.1)
Balance as at 30 September 2024 37.2 817.9 20.1 0.3 4.4 1,013.8 1,893.7
Profit for the period 2 - - - - - 55.4 55.4
Other comprehensive income for the period - - - - 0.1 (0.1) -
Total comprehensive income - - - - 0.1 55.3 55.4
Purchase of own shares - - - - - (0.1) (0.1)
Share-based payments charge 23 - - - - - 1.2 1.2
Dividends paid 11 - - - - - (37.0) (37.0)
Total transactions with owners recorded directly in equity - - - - - (35.9) (35.9)
Balance as at 31 March 2025 37.2 817.9 20.1 0.3 4.5 1,033.2 1,913.2
Consolidated statement of cash flows
Unaudited
For the 6 months ended 31 March Notes 2025 2024
£m
£m
Cash flow from operating activities
Profit/(loss) for the period 2 55.4 (22.0)
Depreciation and amortisation 0.9 0.7
Net valuation (gains)/loss on investment property 12 (28.2) 73.8
Net finance costs 9 20.8 17.7
Hedge ineffectiveness under IFRS9 20 2.9 -
Share of (profit)/loss of associates and joint ventures 14, 15 (0.2) 0.6
Loss on disposal of investment property 7 0.3 -
Share-based payment charge 23 1.2 1.2
Income from financial interest in property assets 16 (1.5) (0.8)
Tax charge/(credit) 21 18.6 (9.2)
Cash generated from operating activities before changes in working capital 70.2 62.0
Decrease/(increase) in trade and other receivables 6.6 (15.1)
Increase in trade and other payables (0.9) 13.6
Increase in provisions for liabilities and charges 0.6 -
Decrease in inventories 21.0 6.2
Cash generated from operating activities 97.5 66.7
Interest paid (26.0) (24.8)
Interest received 1.0 1.0
Tax paid (8.0) (6.9)
Net cash inflow from operating activities 64.5 36.0
Cash flow from investing activities
Proceeds from sale of investment property 7 63.8 34.3
Proceeds from financial interest in property assets 16 5.7 3.9
Investment in joint ventures 15 (1.4) -
Loans advanced to joint ventures 15 (0.9) (0.6)
Acquisition of investment property 12 (76.4) (121.9)
Acquisition of property, plant and equipment and intangible assets (0.6) (3.4)
Net cash outflow from investing activities (9.8) (87.7)
Cash flow from financing activities
Purchase of own shares (0.1) (0.1)
Proceeds from new borrowings 146.0 164.0
Payment of loan costs (1.9) (0.2)
Cash flows relating to new derivatives/settlement of derivatives (4.0) -
Repayment of borrowings (176.0) (135.0)
Dividends paid 11 (37.0) (32.2)
Net cash outflow from financing activities (73.0) (3.5)
Net decrease in cash and cash equivalents (18.3) (55.2)
Cash and cash equivalents at the beginning of the period 93.2 121.0
Cash and cash equivalents at the end of the period 74.9 65.8
Notes to the unaudited interim financial results
1. Accounting policies
1a Basis of preparation
These condensed interim financial statements are unaudited and do not comprise
statutory accounts within the meaning of Section 434 of the Companies Act
2006. This condensed set of financial statements has been prepared using
accounting policies consistent with UK-adopted international accounting
standards, in accordance with IAS 34 Interim Financial Reporting, and in
accordance with the Disclosure Guidance and Transparent Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The current period financial information presented in this document has been
reviewed, not audited.
The accounting policies used are consistent with those contained in the
Group's last annual report and accounts for the year ended 30 September 2024
which is available on the Group's website (www.graingerplc.co.uk
(http://www.graingerplc.co.uk) ). The Grainger business is not judged to be
highly seasonal, therefore comparatives used for the six month period ended 31
March 2025 Consolidated Income Statement are the six month period ended 31
March 2024 Consolidated Income Statement. It is therefore not necessary to
disclose the Consolidated Income Statement for the full year ended 30
September 2024 (available in the last annual report).
The comparative figures for the financial year ended 30 September 2024 are not
the Company's statutory accounts for that financial year. Those accounts have
been reported on by the Company's auditor and delivered to the registrar of
companies. The report of the auditor was (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
All property assets are subject to a Directors' valuation at the half year
end, supported by an independent external valuation. External valuations at
the half year are conducted by the Group's valuers, Allsop LLP and CBRE
Limited. The valuation process is consistent with the approach set out on
pages 131-132 of the 2024 Annual Report and Accounts, with the exception being
the Group's Residential portfolio valued by Allsop LLP. At the half year,
Allsop LLP inspected 14.1% of the Residential portfolio, with the movement
extrapolated over the non-sampled assets to form 50% of the valuation movement
for these portfolios. The remaining 50% is based on a blended rate arrived at
by taking Halifax, Nationwide and Acadata indices (16.67% weighting each),
applied on a regional Implicit Price Deflator 'IPD' basis.
The Group's financial derivatives were valued as at 31 March 2025 in-house by
a specialised treasury management system, using a discounted cash flow model
and market information. The fair value is derived from the present value of
future cash flows discounted at rates obtained by means of the current yield
curve appropriate for those instruments.
1b Adoption of new and revised International Financial Reporting Standards
and interpretations
New standards, amendments and interpretations in the period
The following new standards, amendments to standards and interpretations were
effective for the Group in the period and have no material impact on the
financial statements:
• Amendments to IAS 1 - Classification of liabilities as current or
non-current;
• Amendments to IAS 1 - Non-current Liabilities with Covenants;
• Amendments to IAS 7 and IFRS 7 - Disclosures: Supplier finance
arrangements;
• Amendments to IFRS 16 - Lease liability in a sale and leaseback;
Notes to the unaudited interim financial results continued
The following new standards and amendments to standards have been issued but
are not yet effective for the Group and have not been early adopted:
• Amendments to IAS 21 - Lack of exchangeability;
• Amendments to IFRS 9 and IFRS 7 - Amendments to the Classification
and Measurement of Financial Instruments;
• Annual Improvements to IFRS Accounting Standards - Volume 11;
• Amendments to IFRS 9 and IFRS 7 - Contracts Referencing
Nature-dependent Electricity;
• IFRS 18 - Presentation and Disclosure in Financial Statements;
• IFRS 19 - Subsidiaries without Public Accountability: Disclosures;
With the exception of IFRS 18, the application of these new standards and
amendments are not expected to have a material impact on the Group's financial
statements.
1c Significant judgements and estimates
Full details of critical accounting estimates are given on pages 131-133 of
the 2024 Annual Report and Accounts. This includes detail of the Group's
approach to valuation of property assets and the use of external valuers in
the process.
The valuations exercise is an extensive process which includes the use of
historical experience, estimates and judgements. The Directors are satisfied
that the valuations agreed with our external valuers are a reasonable
representation of property values in the circumstances known and evidence
available at the reporting date. Actual results may differ from these
estimates. Estimates and assumptions are reviewed on an on-going basis with
revisions recognised in the period in which the estimates are revised and in
any future periods affected.
1d Group risk factors
The principal risks and uncertainties facing the Group are set out in the Risk
Management report on pages 56-64 of the 2024 Annual Report and Accounts. A
number of risks faced by the Group are not directly within our control such as
the wider economic and political environment.
In line with our risk management approach detailed on pages 56-58 of the 2024
Annual Report and Accounts, the key risks to the business are under regular
review by the Board and management,
applying Grainger's risk management framework. There have been no significant
updates to risk, or failures of control, within the reporting period.
1e Going concern assessment
The Directors are required to make an assessment of the Group's ability to
continue to trade as a going concern for a period of at least 12 months from
the date of the financial statements. Given the macro-economic conditions in
which the Group is operating, the Directors have placed a particular focus on
the appropriateness of adopting the going concern basis in preparing the
interim financial statements for the period ended 31 March 2025.
The Directors have assessed the future funding commitments of the Group and
compared these to the level of committed loan facilities and cash resources
over the medium term. In making this assessment, consideration has been given
to compliance with borrowing covenants along with the uncertainty inherent in
future financial forecasts and, where applicable, severe sensitivities have
been applied to the key factors affecting financial performance for the Group.
The going concern assessment is based on the first 18 months of the Group's
five year forecast model, which exceeds the required period of assessment of
at least 12 months in order to be aligned to the Group's financial year end,
covering the period 1 April 2025 to 30 September 2026.
Notes to the unaudited interim financial results continued
The assessment considers a severe but plausible downside scenario, reflecting
the following key assumptions:
· Reducing PRS occupancy to 93.0% by 30 September 2025 and to 86.0%
by 30 September 2026
· Rental growth reduced to 2.5% in FY25 and FY26
· Reducing property valuations by 2.5% by 30 September 2025 and
another 7.5% by 30 September 2026, driven by rents, yield expansion or house
price deflation
· Operating and development cost inflation of 10% p.a.
· Delay of 3 months to the development sites completions and
stabilisations
· Assumption of 75% of the regulated tenancies recycling target
achieved
· An increase in SONIA rate of 2% from 1 April 2025
· Credit rating downgrade to increase coupon rates on corporate
bonds by 1.25% from 1 April 2025
The Directors consider these assumptions appropriate given the majority of
costs are incurred under fixed term price contracts, development agreements,
or are under the Group's control.
No new financing is assumed in the assessment period and excluding the
Rothesay GRIP 7yr facility of £75m reaching maturity in June 2026 the other
existing facilities are assumed to remain available. Even in this severe but
plausible downside scenario, the Group has sufficient cash reserves, with the
loan-to-value covenant remaining no higher than 48% (facility maximum covenant
ranges between 70% - 75%) and interest cover no lower than 2.69x (facility
minimum covenant ranges between 1.35x - 1.75x) for the 18 months to September
2026, which covers the required period of at least 12 months from the date of
authorisation of these financial statements.
Based on these considerations, together with available market information and
the Directors' experience of the Group's property portfolio and markets, the
Directors continue to adopt the going concern basis in preparing the interim
financial statements for the period ended 31 March 2025.
1f Forward-looking statement
Certain statements in this interim announcement are forward-looking. Although
the Group believes that the expectations reflected in these forward-looking
statements are reasonable, we can give no assurance that these expectations
will prove to have been correct.
Because these statements involve risks and uncertainties, actual results may
differ materially from those expressed or implied by these forward-looking
statements. We undertake no obligation to update any forward-looking
statements whether as a result of new information, future events or otherwise.
2. Analysis of profit before tax
The table below details adjusted earnings, which is one of Grainger's key
performance indicators. The metric is utilised as a key measure to aid
understanding of the performance of the continuing business and excludes
valuation movements and other adjustments which do not form part of the normal
ongoing revenue or costs of the business and, either individually or in
aggregate, are material to the reported Group results.
Notes to the unaudited interim financial results continued
For the 6 months ended 2025 2024
31 March (unaudited)
£m Statutory Valuation Other adjustments Adjusted earnings Statutory Valuation Other adjustments Adjusted earnings
Group revenue 136.4 - - 136.4 113.7 - - 113.7
Net rental income 61.3 - - 61.3 53.2 - - 53.2
Profit on disposal of trading property 20.2 - - 20.2 19.9 - - 19.9
Loss on disposal of investment property (0.3) - - (0.3) - - - -
Income from financial interest in property assets 1.5 0.6 - 2.1 0.8 1.5 - 2.3
Fees and other income 4.7 - - 4.7 3.5 - - 3.5
Administrative expenses (16.9) - - (16.9) (16.2) - - (16.2)
Other expenses (2.2) - 1.9 (0.3) (0.7) - - (0.7)
Reversal of impairment of inventories to net realisable value 1.0 (1.0) - - 0.4 (0.4) - -
Operating profit 69.3 (0.4) 1.9 70.8 60.9 1.1 - 62.0
Net valuation gain/(loss) on investment property 28.2 (28.2) - - (73.8) 73.8 - -
Hedge ineffectiveness under IFRS9 (2.9) - 2.9 - - - - -
Finance costs (22.4) - - (22.4) (19.2) - - (19.2)
Finance income 1.6 - - 1.6 1.5 - - 1.5
Share of profit/(loss) of associates after tax 0.4 (0.1) - 0.3 (0.5) 0.7 - 0.2
Share of loss of joint ventures after tax (0.2) - - (0.2) (0.1) - - (0.1)
Profit/(loss) before tax 74.0 (28.7) 4.8 50.1 (31.2) 75.6 - 44.4
Tax (charge)/credit for the period (18.6) 9.2
Profit/(loss) for the period attributable to the owners of the Company 55.4 (22.0)
Basic adjusted earnings per share 5.1p 4.5p
Diluted adjusted earnings per share 5.1p 4.5p
Profit before tax in the adjusted columns above of £50.1m (2024: £44.4m) is
the adjusted earnings of the Group. Adjusted earnings per share assumes tax of
£12.5m (2024: £11.1m) in line with the standard rate of UK Corporation Tax
of 25.0% (2024: 25.0%), divided by the weighted average number of shares as
shown in Note 10. The Group's IFRS statutory earnings per share is also
detailed in Note 10. The classification of amounts as other adjustments is a
judgement made by management and is a matter referred to the Audit Committee
for approval. Included in other adjustments are £1.9m for fire safety
provisions (2024: £nil) and hedge ineffectiveness under IFRS9 of £2.9m
(2024: £nil).
Notes to the unaudited interim financial results continued
3. Segmental Information
IFRS 8, Operating Segments requires operating segments to be identified based
upon the Group's internal reporting to the Chief Operating Decision Maker
('CODM') so that the CODM can make decisions about resources to be allocated
to segments and assess their performance. The Group's CODM are the Executive
Directors.
The two significant segments for the Group are PRS and Reversionary. The PRS
segment includes stabilised PRS assets as well as PRS under construction due
to direct development and forward funding arrangements, both for wholly-owned
assets and the Group's interest in joint ventures and associates as relevant.
The Reversionary segment includes regulated tenancies, as well as CHARM. The
Other segment includes legacy strategic land and development arrangements,
along with administrative expenses.
The key operating performance measure of profit or loss used by the CODM is
adjusted earnings before tax, valuation and other adjustments.
The principal net asset value (NAV) measure reviewed by the CODM is EPRA NTA
which is considered to be the most relevant, and therefore the primary NAV
measure for the Group. EPRA NTA reflects the tax that will crystallise in
relation to the trading portfolio, whilst excluding the volatility of mark to
market movements on fixed rate debt and derivatives which are unlikely to be
realised. Other NAV measures include EPRA NRV and EPRA NDV which we report
alongside EPRA NTA.
Information relating to the Group's operating segments is set out in the
tables below. The tables distinguish between adjusted earnings, valuation
movements and other adjustments and should be read in conjunction with Note 2.
March 2025 Income statement (unaudited)
For the 6 months ended 31 March 2025 PRS Reversionary Other Total
£m
Group revenue
Segment revenue - external 82.4 53.1 0.9 136.4
Net rental income 55.3 5.4 0.6 61.3
Profit on disposal of trading property (0.4) 20.6 - 20.2
Loss on disposal of investment property (0.3) - - (0.3)
Income from financial interest in property assets - 2.1 - 2.1
Fees and other income 4.5 - 0.2 4.7
Administrative expenses - - (16.9) (16.9)
Other expenses (0.3) - - (0.3)
Net finance costs (17.2) (3.3) (0.3) (20.8)
Share of trading profit of joint ventures and associates 0.1 - - 0.1
after tax
Adjusted earnings 41.7 24.8 (16.4) 50.1
Valuation movements 28.1 0.6 - 28.7
Other adjustments (1.9) - (2.9) (4.8)
Profit before tax 67.9 25.4 (19.3) 74.0
A reconciliation from adjusted earnings to EPRA earnings is detailed in the
table below, with further details shown in the EPRA performance measures
section at the end of this document:
For the 6 months ended 31 March 2025 PRS Reversionary Other Total
£m
Adjusted earnings 41.7 24.8 (16.4) 50.1
Profit on disposal of trading property 0.4 (20.6) - (20.2)
Loss on disposal of investment property 0.3 - - 0.3
EPRA earnings 42.4 4.2 (16.4) 30.2
Notes to the unaudited interim financial results continued
March 2024 Income statement (unaudited)
For the 6 months ended 31 March 2024 PRS Reversionary Other Total
£m
Group revenue 70.1 41.9 1.7 113.7
Segment revenue - external
Net rental income 46.8 5.8 0.6 53.2
Profit on disposal of trading property 0.1 18.9 0.9 19.9
Income from financial interest in property assets - 2.3 - 2.3
Fees and other income 3.5 - - 3.5
Administrative expenses - - (16.2) (16.2)
Other expenses (0.7) - - (0.7)
Net finance costs (14.0) (3.4) (0.3) (17.7)
Share of trading profit of joint ventures and associates after tax 0.1 - - 0.1
Adjusted earnings 35.8 23.6 (15.0) 44.4
Valuation movements (75.0) (0.6) - (75.6)
Other adjustments - - - -
(Loss)/profit before tax (39.2) 23.0 (15.0) (31.2)
A reconciliation from adjusted earnings to EPRA earnings is detailed in the
table below:
For the 6 months ended 31 March 2024 PRS Reversionary Other Total
£m
Adjusted earnings 35.8 23.6 (15.0) 44.4
Profit on disposal of trading property (0.1) (18.9) (0.9) (19.9)
EPRA earnings 35.7 4.7 (15.9) 24.5
Segmental assets
The principal net asset value measures reviewed by the CODM are EPRA NRV, EPRA
NTA and EPRA NDV. These measures reflect the current market value of trading
property owned by the Group rather than the lower of historical cost and net
realisable value. These measures are considered to be a more relevant
reflection of the value of the assets owned by the Group.
EPRA NRV is the Group's statutory net assets plus the adjustment required to
increase the value of trading stock from its statutory accounts value of the
lower of cost and net realisable value to its market value. In addition, the
statutory statement of financial position amounts for both deferred tax on
property revaluations and derivative financial instruments net of deferred
tax, including those in joint ventures and associates, are added back to
statutory net assets. Finally, the market value of Grainger plc shares owned
by the Group are added back to statutory net assets.
EPRA NTA assumes that entities buy and sell assets, thereby crystallising
certain levels of deferred tax liabilities. For the Group, deferred tax in
relation to revaluations of its trading portfolio is taken into account by
applying the expected rate of tax to the adjustment that increases the value
of trading stock from its statutory accounts value of the lower of cost and
net realisable value, to its market value. The measure also excludes all
intangible assets on the statutory balance sheet, including goodwill.
Notes to the unaudited interim financial results continued
EPRA NDV reverses some of the adjustments made between statutory net assets,
EPRA NRV and EPRA NTA. All of the adjustments for the value of derivative
financial instruments net of deferred tax, including those in joint ventures
and associates, are reversed. The adjustment for the deferred tax on
investment property revaluations excluded from EPRA NRV and EPRA NTA are also
reversed, as is the intangible adjustment in respect of EPRA NTA, except for
goodwill which remains excluded. In addition, adjustments are made to net
assets to reflect the fair value, net of deferred tax, of the Group's fixed
rate debt.
Total Accounting Return of 1.3% is calculated from the closing EPRA NTA of
300p per share plus the dividend of 2.85p per share for the half year, divided
by the opening EPRA NTA of 298p per share.
These measures are set out below by segment along with a reconciliation to the
summarised statutory statement of financial position:
March 2025 Segment net assets (unaudited)
£m PRS Reversionary Other Total Pence per share
Total segment net assets (statutory) 1,781.7 114.6 16.9 1,913.2 259
Total segment net assets (EPRA NRV) 1,907.0 362.0 29.0 2,298.0 309
Total segment net assets (EPRA NTA) 1,904.3 299.7 22.0 2,226.0 300
Total segment net assets (EPRA NDV) 1,781.4 299.7 103.1 2,184.2 294
March 2025 Reconciliation of EPRA NAV measures (unaudited)
£m Statutory balance sheet Adjustments EPRA NRV Adjustments to deferred and contingent tax and intangibles EPRA NTA balance sheet Adjustments to derivatives, fixed rate debt and intangibles EPRA NDV
to market
balance
balance
value, deferred
sheet
sheet
tax and
derivatives
Investment property(1) 3,102.1 - 3,102.1 - 3,102.1 - 3,102.1
Investment in joint ventures and associates 93.8 - 93.8 - 93.8 - 93.8
Financial interest in property assets 53.2 - 53.2 - 53.2 - 53.2
Inventories - trading property 310.6 265.6 576.2 - 576.2 - 576.2
Cash and cash equivalents 74.9 - 74.9 - 74.9 - 74.9
Other assets 101.1 (7.1) 94.0 (2.2) 91.8 23.1 114.9
Total assets 3,735.7 258.5 3,994.2 (2.2) 3,992.0 23.1 4,015.1
Interest-bearing loans and borrowings (1,562.8) - (1,562.8) - (1,562.8) 84.4 (1,478.4)
Deferred and contingent tax liabilities (131.3) 126.3 (5.0) (69.8) (74.8) (149.3) (224.1)
Other liabilities (128.4) - (128.4) - (128.4) - (128.4)
Total liabilities (1,822.5) 126.3 (1,696.2) (69.8) (1,766.0) (64.9) (1,830.9)
Net assets 1,913.2 384.8 2,298.0 (72.0) 2,226.0 (41.8) 2,184.2
(1) Includes investment property - held for sale.
Notes to the unaudited interim financial results continued
September 2024 Segment net assets (audited)
£m PRS Reversionary Other Total Pence per share
Total segment net assets (statutory) 1,757.6 117.5 18.6 1,893.7 255
Total segment net assets (EPRA NRV) 1,873.5 386.9 35.5 2,295.9 309
Total segment net assets (EPRA NTA) 1,870.3 319.1 28.7 2,218.1 298
Total segment net assets (EPRA NDV) 1,757.3 319.1 118.5 2,194.9 295
September 2024 Reconciliation of EPRA NAV measures (audited)
£m Statutory balance sheet Adjustments EPRA NRV Adjustments to deferred and contingent tax and intangibles EPRA NTA balance sheet Adjustments to derivatives, fixed rate debt and intangibles EPRA NDV
to market
balance
balance
value, deferred
sheet
sheet
tax and
derivatives
Investment property 3,028.3 - 3,028.3 - 3,028.3 - 3,028.3
Investment in joint ventures and associates 91.3 - 91.3 - 91.3 - 91.3
Financial interest in property assets 57.4 - 57.4 - 57.4 - 57.4
Inventories - trading property 331.6 288.5 620.1 - 620.1 - 620.1
Cash and cash equivalents 93.2 - 93.2 - 93.2 - 93.2
Other assets 140.9 (3.2) 137.7 (1.8) 135.9 21.1 157.0
Total assets 3,742.7 285.3 4,028.0 (1.8) 4,026.2 21.1 4,047.3
Interest-bearing loans and borrowings (1,592.9) - (1,592.9) - (1,592.9) 98.1 (1,494.8)
Deferred and contingent tax liabilities (121.5) 116.9 (4.6) (76.0) (80.6) (142.4) (223.0)
Other liabilities (134.6) - (134.6) - (134.6) - (134.6)
Total liabilities (1,849.0) 116.9 (1,732.1) (76.0) (1,808.1) (44.3) (1,852.4)
Net assets 1,893.7 402.2 2,295.9 (77.8) 2,218.1 (23.2) 2,194.9
4. Group revenue
Unaudited
2025 2024
£m
£m
Gross rental income (Note 5) 84.1 74.7
Gross proceeds from disposal of trading property (Note 6) 47.6 35.5
Fees and other income (Note 8) 4.7 3.5
136.4 113.7
5. Net rental income
Unaudited
2025 2024
£m
£m
Gross rental income 84.1 74.7
Property operating expenses (22.8) (21.5)
61.3 53.2
Notes to the unaudited interim financial results continued
6. Profit on disposal of trading property
Unaudited
2025 2024
£m
£m
Gross proceeds from disposal of trading property 47.6 35.5
Selling costs (1.2) (0.9)
Net proceeds from disposal of trading property 46.4 34.6
Carrying value of trading property sold (Note 13) (26.2) (14.7)
20.2 19.9
7. Loss on disposal of investment property
Unaudited
2025 2024
£m
£m
Gross proceeds from disposal of investment property 31.4 35.6
Selling costs (0.9) (1.3)
Net proceeds from disposal of investment property 30.5 34.3
Carrying value of investment property sold (Note 12) (30.8) (34.3)
(0.3) -
8. Fees and other income
Unaudited
2025 2024
£m
£m
Property and asset management fee income 1.2 1.2
Other sundry income 3.5 2.3
4.7 3.5
Included within other sundry income in the current period is £3.5m (2024:
£2.2m) liquidated and ascertained damages (LADs) recorded to compensate the
Group for lost rental income resulting from the delayed completion of
construction contracts.
9. Finance costs and
income
Unaudited
2025 2024
£m
£m
Finance costs
Bank loans and mortgages 11.4 8.6
Non-bank financial institution 3.2 4.2
Corporate bond 11.4 11.3
Interest capitalised under IAS 23 (5.4) (6.6)
Other finance costs 1.8 1.7
22.4 19.2
Finance income
Interest receivable from joint ventures (Note 24) (0.6) (0.6)
Other interest receivable (1.0) (0.9)
(1.6) (1.5)
Net finance costs 20.8 17.7
Notes to the unaudited interim financial results continued
10. Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit or loss
attributable to the owners of the Company by the weighted average number of
ordinary shares in issue during the period, excluding ordinary shares
purchased by the Group and held both in Trust and as treasury shares to meet
its obligations under the Long-Term Incentive Plan ('LTIP') and Deferred Bonus
Plan ('DBP'), on which the dividends are being waived.
Diluted
Diluted earnings per share is calculated by adjusting the weighted average
number of shares in issue by the dilutive effect of ordinary shares that the
Company may potentially issue relating to its share option schemes and
contingent share awards under the LTIP and DBP, based upon the number of
shares that would be issued if 31 March 2025 was the end of the contingency
period. Where the effect of the above adjustments is antidilutive, they are
excluded from the calculation of diluted earnings per share.
Unaudited
31 March 2025 31 March 2024
Profit for Weighted average number of shares (millions) Earnings Loss for Weighted average number of shares (millions) Loss
the period
per share (pence)
the period
per share (pence)
£m
£m
Basic earnings/(loss) per share
Profit/(loss) attributable to equity holders 55.4 738.5 7.5 (22.0) 738.2 (3.0)
Effect of potentially dilutive securities
Share options and contingent shares - 3.7 - - 3.3 -
Diluted earnings/(loss) per share
Profit/(loss) attributable to equity holders 55.4 742.2 7.5 (22.0) 741.5 (3.0)
11. Dividends
The Company has announced an interim dividend of 2.85p (March 2024: 2.54p) per
share which will return £21.0m (March 2024: £18.8m) of cash to shareholders.
In the six months ended 31 March 2025, the final dividend for the year ended
30 September 2024 which amounted to £37.0m has been paid.
12. Investment property
Unaudited Audited
30 Sept
31 March
2025 2024
£m
£m
Opening balance 3,028.3 2,948.9
Acquisitions 7.6 85.9
Capital expenditure - completed assets 9.6 13.9
Capital expenditure - assets under construction 59.2 161.2
Total additions 76.4 261.0
Disposals (Note 7) (30.8) (149.1)
Net valuation gain/(loss) on investment properties 28.2 (32.5)
3,102.1 3,028.3
Reclassifications to investment property - held for sale (66.2) (31.5)
Closing balance 3,035.9 2,996.8
Notes to the unaudited interim financial results continued
Within investment property are a number of assets held for sale at the
reporting date, valued at £66.2m (September 2024: £31.5m). Held for sale
properties are those that are for sale, where solicitors have been instructed,
or where contracts have been exchanged. All investment properties which are
held for sale are included within our PRS segment. Investment properties -
held for sale are classified as current assets and are carried at fair value.
13. Inventories - trading property
Unaudited 31 March Audited
30 Sept
2025 2024
£m
£m
Opening balance 331.6 392.2
Additions 4.2 15.0
Disposals (Note 6) (26.2) (75.5)
Reversal of impairment/(impairment) of inventories to net realisable value 1.0 (0.1)
Closing balance 310.6 331.6
14. Investment in associates
Unaudited 31 March Audited
30 Sept
2025 2024
£m
£m
Opening balance 14.9 15.8
Share of profit/(loss) for the period 0.4 (0.4)
Dividends paid - (0.5)
Closing balance 15.3 14.9
The closing balance comprises share of net assets of £0.8m (September 2024:
£0.4m) and net loans due from associates of £14.5m (September 2024:
£14.5m). At the balance sheet date, there is no expectation of any material
credit losses on loans due.
As at 31 March 2025, the Group's interest in active associates was as follows:
% of ordinary Country of incorporation Accounting period end
share capital held
Vesta LP 20.0 UK 30 September
15. Investment in joint ventures
Unaudited Audited
30 Sept
31 March
2025 2024
£m
£m
Opening balance 76.4 75.2
Share of loss for the period (0.2) (0.2)
Further investment(1) 1.4 -
Loans advanced to joint ventures 0.9 1.4
Closing balance 78.5 76.4
(1) Grainger invested £1.4m into Connected Living London (BTR) Limited in the
period (September 2024: £nil).
The closing balance comprises share of net assets of £48.1m (September 2024:
£46.7m) and net loans due from joint ventures of £30.4m (September 2024:
£29.7m). At the balance date, there is no expectation of any material credit
losses on loans due.
Notes to the unaudited interim financial results continued
At 31 March 2025, the Group's interest in active joint ventures was as
follows:
% of ordinary share capital held Country of incorporation Accounting
period end
Connected Living London (BTR) Limited 51 UK 30 September
Curzon Park Limited 50 UK 31 March
Lewisham Grainger Holdings LLP 50 UK 30 September
16. Financial interest in property assets ('CHARM' portfolio)
Unaudited Audited
30 Sept
31 March
2025 2024
£m
£m
Opening balance 57.4 67.0
Cash received from the instrument (5.7) (8.3)
Amounts taken to income statement 1.5 (1.3)
Closing balance 53.2 57.4
The CHARM portfolio is a financial interest in equity mortgages held by the
Church of England Pensions Board as mortgagee. It is accounted for under IFRS
9 and is measured at fair value through profit and loss.
It is considered to be a Level 3 financial asset as defined by IFRS 13. The
financial asset is included in the fair value hierarchy within Note 20.
17. Trade and other receivables
Unaudited Audited
30 Sept
31 March
2025 2024
£m
£m
Rent and other tenant receivables 4.6 4.8
Deduct: Provision for impairment (1.6) (1.5)
Rent and other tenant receivables - net 3.0 3.3
Restricted deposits 30.0 63.3
Other receivables 13.8 19.3
Prepayments 4.2 5.0
Closing balance 51.0 90.9
The Group's assessment of expected credit losses involves estimation given its
forward-looking nature. This is not considered to be an area of significant
judgement or estimation due to the balance of gross rent and other tenant
receivables of £4.6m (September 2024: £4.8m). Assumptions used in the
forward-looking assessment are continually reviewed to take into account
likely rent deferrals.
At the balance date, there is no expectation of any material credit losses on
contract assets.
Restricted deposits arise from contracts with lenders that place restrictions
on use of funds which cannot be accessed until the lender validates that
covenant requirements continue to be met. They are made up of rental and sales
income from assets linked to our non-bank facility. Funds are released by the
lender once quarterly covenant compliance assessments have been completed.
The fair values of trade and other receivables are considered to be equal to
their carrying amounts.
Notes to the unaudited interim financial results continued
18. Trade and other payables
Unaudited Audited
30 Sept
31 March
2025 2024
£m
£m
Current liabilities
Deposits received 13.0 12.8
Trade payables 28.7 19.0
Lease liabilities 0.7 0.7
Tax and social security costs 3.2 4.9
Accruals 52.9 64.5
Deferred income 9.1 12.2
107.6 114.1
Non-current liabilities
Lease liabilities 6.0 6.3
6.0 6.3
Total trade and other payables 113.6 120.4
Within accruals, £34.8m comprises accrued expenditure in respect of ongoing
construction activities (September 2024: £43.9m).
19. Provisions for other liabilities and charges
Unaudited Audited
30 Sept
31 March
2024
2025
£m
£m
Current provisions for other liabilities and charges
Opening balance 13.2 8.6
Additions 1.9 5.0
Utilisation (1.0) (0.4)
14.1 13.2
Non-current provisions for other liabilities and charges
Opening balance 1.0 1.1
Utilisation (0.3) (0.1)
0.7 1.0
Total provisions for other liabilities and charges 14.8 14.2
Following an extensive review of legacy development projects, £14.1m
(September 2024: £13.2m) for potential fire safety remediation costs has been
provided for, relating to a small number of legacy properties that Grainger
historically had an involvement in developing and may require fire safety
related remediation works. Where appropriate, the Group is seeking recoveries
from contractors and insurers which may reduce the liability over time.
Notes to the unaudited interim financial results continued
20. Interest-bearing loans and borrowings and financial risk management
Unaudited Audited
30 Sept
31 March
2025 2024
£m
£m
Non-current liabilities
Bank loans - Pounds sterling 517.4 548.2
Bank loans - Euro 0.8 0.8
Non-bank financial institution 348.2 347.9
Corporate bond 696.4 696.0
Closing balance 1,562.8 1,592.9
The above analyses of loans and borrowings are net of unamortised loan issue
costs and the discount on issuance of the corporate bonds. As at 31 March
2025, unamortised costs totalled £14.0m (September 2024: £13.7m) and the
outstanding discount was £1.4m (September 2024:
£1.6m).
Categories of financial instrument
The Group holds financial instruments such as financial interest in property
assets, trade and other receivables (excluding prepayments), derivatives, cash
and cash equivalents. For all assets and liabilities excluding
interest-bearing loans the book value was the same as the fair value as at 31
March 2025 and as at 30 September 2024.
As at 31 March 2025, the fair value of interest-bearing loans is lower than
the book value by £84.4m (September 2024: £319.1m lower than book value),
but there is no requirement under IFRS 9 to adjust the carrying value of
loans, all of which are stated at unamortised cost in the consolidated
statement of financial position.
Market risk
The Group is exposed to market risk through interest rates, the availability
of credit and house price movements relating to the Tricomm Housing portfolio
and the CHARM portfolio. The Group is not significantly exposed to equity
price risk or to commodity price risk.
Fair values
IFRS 13 sets out a three-tier hierarchy for financial assets and liabilities
valued at fair value. These are as follows:
Level 1 - quoted prices (unadjusted) in active markets for identical assets
and liabilities;
Level 2 - inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly or indirectly; and
Level 3 - unobservable inputs for the asset or liability.
Notes to the unaudited interim financial results continued
The following table presents the Group's assets and liabilities that are
measured at fair value:
Unaudited Audited
31 March 2025 30 September 2024
Assets Liabilities Assets Liabilities
£m
£m
£m
£m
Level 3
CHARM 53.2 - 57.4 -
Investment property(1) 3,102.1 - 3,028.3 -
3,155.3 - 3,085.7 -
Level 2
Interest rate swaps - in cash flow hedge accounting relationships 21.1 - 19.8 -
21.1 - 19.8 -
(1) Includes investment property - held for sale
The significant unobservable inputs affecting the carrying value of the CHARM
portfolio are house price inflation and discount rates. A reconciliation of
movements and amounts recognised in the consolidated income statement are
detailed in Note 16.
The investment valuations provided by Allsop LLP and CBRE Limited are based on
RIC's Professional Valuation Standards, but include a number of unobservable
inputs and other valuation assumptions.
The fair value of swaps and caps were valued in-house by a specialised
treasury management system, using first a discounted cash flow model and
market information. The fair value is derived from the present value of future
cash flows discounted at rates obtained by means of the current yield curve
appropriate for those instruments. As all significant inputs required to value
the swaps and caps are observable, they fall within Level 2.
The reconciliation between opening and closing balances for Level 3 is
detailed in the table below:
Unaudited Audited
30 Sept
31 March
Assets - Level 3 2025 2024
£m
£m
Opening balance 3,085.7 3,015.9
Amounts taken to income statement 29.7 (33.8)
Other movements 39.9 103.6
Closing balance 3,155.3 3,085.7
In accordance with IFRS 13, the Group measures derivatives at fair value
including the effect of counterparty credit risk. Where derivatives have been
designated in a cash flow hedge relationship, the Group carries out hedge
effectiveness testing in accordance with IFRS 9. Hedge ineffectiveness
recognised in the period of £2.9m (2024: £nil).
Notes to the unaudited interim financial results continued
21. Tax
The tax charge for the period of £18.6m (2024: £9.2m credit) recognised in
the consolidated income statement comprises:
Unaudited
2025 2024
£m
£m
Current tax
Corporation tax on profit/(loss) 9.5 9.5
Adjustments relating to prior periods - (0.1)
9.5 9.4
Deferred tax
Origination and reversal of temporary differences 9.1 (16.9)
Adjustments relating to prior periods - (1.7)
9.1 (18.6)
Total tax charge/(credit) for the period 18.6 (9.2)
The Group works in an open and transparent manner and maintains a regular
dialogue with HM Revenue & Customs. This approach is consistent with the
'low risk' rating that has been reconfirmed by HM Revenue & Customs during
the period and to which the Group is committed.
The Group's results for this period are taxed at the standard rate of 25.0%
(2024: 25.0%).
In addition to the above, a deferred tax charge £0.1m (2024: credit £4.4m)
was recognised within other comprehensive income comprising:
Unaudited
2025 2024
£m
£m
Remeasurement of BPT Limited defined benefit pension scheme - (0.1)
Fair value movement in cash flow hedges 0.1 (4.3)
Amounts recognised in other comprehensive income 0.1 (4.4)
Deferred tax balances comprise temporary differences attributable to:
Unaudited 31 March 2025 Audited
£m
30 Sept
2024
£m
Deferred tax assets
Short-term temporary differences 6.8 6.1
6.8 6.1
Deferred tax liabilities
Trading property uplift to fair value on business combinations (3.5) (3.9)
Investment property revaluation (102.4) (93.8)
Short-term temporary differences (23.0) (21.9)
Fair value movement in financial interest in property assets (0.7) (0.2)
Actuarial gain on BPT Limited defined benefit pension scheme (0.2) (0.2)
Fair value movement in derivative financial instruments (1.5) (1.5)
(131.3) (121.5)
Total deferred tax (124.5) (115.4)
Deferred tax has been calculated at a rate of 25.0% (September 2024: 25.0%) in
line with the enacted main rate of corporation tax. These calculations do not
incorporate any impact of the Group's anticipated REIT conversion.
Notes to the unaudited interim financial results continued
In addition to the tax amounts shown above, contingent tax based on EPRA
market value measures, being tax on the difference between the carrying value
of trading properties in the consolidated statement of financial position and
their market value has not been recognised by the Group. This contingent tax
amounts to £66.4m, calculated at 25.0% (September 2024: £72.1m, calculated
at 25.0%) and will be realised as the properties are sold.
22. Retirement benefits
The Group retirement benefit asset decreased by £0.1m to £6.4m in the six
months ended 31 March 2025. This movement has arisen from a £1.5m reduction
on plan assets offset by gains due to changes in assumptions of £1.4m
(primarily market observable discount rates and inflationary expectations).
The principal actuarial assumptions used to reflect market conditions as at 31
March 2025 are as follows:
Unaudited Audited
31 March 2025 30 Sept 2024
% %
Discount rate 5.7 5.0
Retail Price Index (RPI) inflation 3.4 3.3
Consumer Price Index (CPI) inflation 2.7 2.6
Rate of increase of pensions in payment 5.0 5.0
23. Share-based payments
The Group operates a number of equity-settled, share-based compensation plans
comprising awards under a Long-Term Incentive Plan ('LTIP'), a Deferred Bonus
Plan ('DBP'), a Share Incentive Plan ('SIP') and a Save As You Earn Scheme
('SAYE'). The share-based payments charge recognised in the consolidated
income statement for the period is £1.2m (2024: £1.2m).
24. Related party transactions
During the period ended 31 March 2025, the Group transacted with its
associates and joint ventures (details of which are set out in Notes 14 and
15). The Group provides a number of services to its associates and joint
ventures. These include property and asset management services for which the
Group receives fee income. The related party transactions recognised in the
consolidated income statement and consolidated statement of financial position
are as follows:
Unaudited
31 March 2025 31 March 2024
Fees Period end Fees Period end
recognised
balance
recognised
balance
£'000
£'000
£'000
£'000
Connected Living London (BTR) Limited 280 347 390 648
Lewisham Grainger Holdings LLP 74 587 144 431
Vesta Limited Partnership 405 198 399 190
759 1,132 933 1,269
Unaudited Audited
31 March 2025 30 Sept 2024
Interest Period end loan Interest Interest Period end loan Interest
recognised
balance
rate
recognised
balance
rate
£'000
£m
%
£'000
£m
%
Curzon Park Limited - 18.1 Nil - 18.1 Nil
Lewisham Grainger Holdings LLP 628 12.3 10.5 1,196 11.5 11.0
Vesta LP - 15.3 Nil - 14.5 Nil
628 45.7 1,196 44.1
EPRA Performance Measures - Unaudited
The European Public Real Estate Association (EPRA) is the body that represents
Europe's listed property companies. The association sets out guidelines and
recommendations to facilitate consistency in listed real estate reporting, in
turn allowing stakeholders to compare companies on a like-for-like basis. As a
member of EPRA, the Group is supportive of EPRA's initiatives and discloses
measures in relation to the EPRA Best Practices Recommendations ('EPRA BPR')
guidelines. The most recent guidelines, updated in September 2024, have been
adopted by the Group.
EPRA Earnings
31 March 2025 31 March 2024
Earnings Shares Pence per Earnings Shares Pence per share
£m millions share £m millions
Earnings per IFRS income statement 74.0 742.2 10.0 (31.2) 741.5 (4.2)
Adjustments to calculate EPRA Earnings, exclude:
i) Changes in value of investment properties, development properties held for (27.6) - (3.7) 75.3 - 10.1
investment and other interests
ii) Profits or losses on disposal of investment properties, development 0.3 - - - - -
properties held for investment and other interests
iii) Profits or losses on sales of trading properties including impairment (21.2) - (2.9) (20.3) - (2.7)
charges in respect of trading properties
iv) Tax on profits or losses on disposals - - - - - -
v) Negative goodwill/goodwill impairment - - - - - -
vi) Changes in fair value of financial instruments and associated close-out 2.9 - 0.4 - - -
costs
vii) Acquisition costs on share deals and non-controlling joint venture - - - - - -
interests
viii) Deferred tax in respect of EPRA adjustments - - - - - -
ix) Adjustments i) to viii) in respect of joint ventures (0.1) - - 0.7 - 0.1
x) Non-controlling interests in respect of the above - - - - - -
xi) Other adjustments in respect of adjusted earnings 1.9 - 0.3 - - -
EPRA Earnings/Earnings per share 30.2 742.2 4.1 24.5 741.5 3.3
EPRA Earnings per share after tax 3.1 2.5
EPRA Earnings have been divided by the average number of shares shown in Note
10 to these financial statements to calculate earnings per share. EPRA
Earnings per share after tax is calculated using the standard rate of UK
Corporation Tax of 25.0% (2024: 25.0%).
EPRA Performance Measures - Unaudited (continued)
EPRA NRV, EPRA NTA and EPRA NDV
31 March 2025 30 Sept 2024
EPRA NRV EPRA NTA EPRA NDV EPRA NRV EPRA NTA EPRA NDV
£m £m £m £m £m £m
IFRS Equity attributable to shareholders 1,913.2 1,913.2 1,913.2 1,893.7 1,893.7 1,893.7
Include/Exclude:
i) Hybrid Instruments - - - - - -
Diluted NAV 1,913.2 1,913.2 1,913.2 1,893.7 1,893.7 1,893.7
Include:
ii.a) Revaluation of IP (if IAS 40 cost option is used) - - - - - -
ii.b) Revaluation of IPUC (if IAS 40 cost option is used) - - - - - -
ii.c) Revaluation of other non-current investments 8.9 8.9 8.9 11.8 11.8 11.8
iii) Revaluation of tenant leases held as finance leases - - - - - -
iv) Revaluation of trading properties 269.0 199.2 199.2 292.4 216.4 216.4
Diluted NAV at Fair Value 2,191.1 2,121.3 2,121.3 2,197.9 2,121.9 2,121.9
Exclude:
v) Deferred tax in relation to fair value gains of IP 122.7 122.7 - 112.9 112.9 -
vi) Fair value of financial instruments (15.8) (15.8) - (14.9) (14.9) -
vii) Goodwill as a result of deferred tax - - - - - -
viii.a) Goodwill as per the IFRS balance sheet - (0.4) (0.4) - (0.4) (0.4)
viii.b) Intangible as per the IFRS balance sheet - (1.8) - - (1.4) -
Include:
ix) Fair value of fixed interest rate debt - - 63.3 - - 73.4
x) Revalue of intangibles to fair value - - - - - -
xi) Real estate transfer tax - - - - - -
NAV 2,298.0 2,226.0 2,184.2 2,295.9 2,218.1 2,194.9
Fully diluted number of shares 743.1 743.1 743.1 743.1 743.1 743.1
NAV
NAV pence per share 309 300 294 309 298 295
EPRA Performance Measures - Unaudited (continued)
EPRA NIY
31 March 30 Sept
2025 2024
£m
£m
Investment property - wholly-owned 3,102.1 3,028.3
Investment property - share of JVs/Funds 69.3 66.5
Trading property (including share of JVs) 576.2 620.1
Less: developments (399.2) (401.7)
Completed property portfolio 3,348.4 3,313.2
Allowance for estimated purchaser's costs 188.0 180.5
Gross up completed property portfolio valuation B 3,536.4 3,493.7
Annualised cash passing rental income 168.2 166.1
Property outgoings (44.8) (48.8)
Annualised net rents A 123.6 117.3
Add: rent incentives 0.2 0.2
'Topped up' net annualised rents C 123.6 117.5
EPRA NIY A/B 3.5% 3.4%
EPRA 'topped up' NIY C/B 3.5% 3.4%
Gross up completed property portfolio valuation 3,536.4 3,493.7
Adjustments to completed property portfolio in respect of regulated tenancies (589.2) (634.4)
Adjusted gross up completed property portfolio valuation b 2,947.2 2,859.2
Annualised net rents 123.4 117.3
Adjustments to annualised cash passing rental income in respect of newly 10.5 8.3
completed developments and refurbishment activity
Adjustments to property outgoings in respect of newly completed developments (2.8) (2.4)
and refurbishment activity
Adjustments to annualised cash passing rental income in respect of regulated (14.2) (15.0)
tenancies
Adjustments to property outgoings in respect of regulated tenancies 3.8 4.5
Adjusted annualised net rents a 120.7 112.7
Add: rent incentives 0.2 0.2
EPRA 'topped up' NIY c 120.9 112.9
Adjusted EPRA NIY a/b 4.1% 3.9%
Adjusted EPRA 'topped up' NIY c/b 4.1% 3.9%
EPRA Vacancy Rate
31 March 30 Sept
2025 2024
£m
£m
Estimated rental value of vacant space A 5.1 3.3
Estimated rental value of the whole portfolio B 128.6 122.9
EPRA Vacancy Rate A/B 4.0% 2.7%
The vacancy rate reflects estimated rental values of the Group's stabilised
habitable PRS units as at the reporting date.
EPRA Performance Measures - Unaudited (continued)
EPRA Cost Ratio
For the 6 months ended 31 March 2025 2024
£m
£m
Administrative expenses 16.9 16.2
Property operating expenses 22.8 21.5
Share of joint ventures expenses 0.4 (0.1)
Management fees (1.2) (1.2)
Other operating income/recharges intended to cover overhead expenses (3.5) (2.3)
Exclude:
Investment property depreciation - -
Ground rent costs (0.1) (0.1)
Costs (including direct vacancy costs) A 35.3 34.0
Direct vacancy costs (1.2) (1.3)
Costs (excluding direct vacancy costs) B 34.1 32.7
Gross rental income 84.1 74.7
Less: ground rent income (0.3) (0.3)
Add: share of joint ventures (gross rental income less ground rents) 0.4 0.4
Add: adjustment in respect of profits or losses on sales of properties 19.9 19.9
Gross Rental Income and Trading Profits C 104.1 94.7
Adjusted EPRA Cost Ratio (including direct vacancy costs) A/C 33.9% 36.0%
Adjusted EPRA Cost Ratio (excluding direct vacancy costs) B/C 32.8% 34.5%
EPRA LTV
31 March 2025
£m Group Share of Joint Ventures Share of Associates Combined
Borrowings from Financial Institutions 878.2 - - 878.2
Bond loans 700.0 - - 700.0
Net payables 62.6 7.1 14.6 84.3
Exclude:
Cash and cash equivalents (87.7) (0.6) (0.6) (88.9)
Net debt A 1,553.1 6.5 14.0 1,573.6
Investment properties at fair value 2,801.1 - 14.9 2,816.0
Investment properties under development 301.0 54.5 - 355.5
Properties held for sale 576.2 - - 576.2
Financial assets 98.1 - - 98.1
Total property value B 3,776.4 54.5 14.9 3,845.8
EPRA LTV % A/B 41.1% 11.9% 94.0% 40.9%
EPRA Performance Measures - Unaudited (continued)
30 Sept 2024
£m Group Share of Joint Ventures Share of Associates Combined
Borrowings from Financial Institutions 908.2 - - 908.2
Bond loans 700.0 - - 700.0
Net payables 29.5 6.7 14.6 50.9
Exclude:
Cash and cash equivalents (140.1) (1.4) (0.5) (142.0)
Net debt A 1,497.6 5.3 14.2 1,517.1
Investment properties at fair value 2,720.2 - 14.5 2,734.7
Investment properties under development 308.1 52.0 - 360.1
Properties held for sale 620.1 - - 620.1
Financial assets 101.7 - - 101.7
Total property value B 3,750.1 52.0 14.5 3,816.6
EPRA LTV % A/B 39.9% 10.1% 97.6% 39.7%
EPRA Capital Expenditure
31 March 2025
£m Trading Properties Investment Properties Group (excl Joint Ventures) Share of Joint Ventures Combined
Acquisitions - 7.6 7.6 - 7.6
Development 3.1 53.8 56.9 2.2 59.1
Completed assets
- Incremental letting space - - - - -
- No incremental letting space 1.1 9.6 10.7 0.1 10.8
- Tenant incentives - - - - -
- Other material non-allocated types of expenditure - - - - -
Capitalised interest - 5.4 5.4 0.3 5.7
Total capital expenditure 4.2 76.4 80.6 2.6 83.2
30 Sept 2024
£m Trading Properties Investment Properties Group (excl Joint Ventures) Share of Joint Ventures Combined
Acquisitions 0.2 85.9 86.1 - 86.1
Development 11.0 149.6 160.6 1.2 161.8
Completed assets
- Incremental letting space - - - - -
- No incremental letting space 3.8 13.9 17.7 - 17.7
- Tenant incentives - - - - -
- Other material non-allocated types of expenditure - - - - -
Capitalised interest - 11.6 11.6 0.6 12.2
Total capital expenditure 15.0 261.0 276.0 1.8 277.8
1 (#_ftnref1) Knight Frank, BTR Market Update Q1 2025
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