REG - Grainger PLC - Trading Update

GraingerAnnouncement

07/02/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240207:nRSG2506Ca&default-theme=true

RNS Number : 2506C  Grainger PLC  07 February 2024

7 February 2024

 

Grainger plc

 

("Grainger", the "Group", or the "Company")

 

TRADING UPDATE

 

Strong rental growth and portfolio expansion continues

·      Like-for-like PRS rental growth 8.4% YTD

·      Occupancy 97.2% (PRS)

·      Sales of regulated tenancy homes at prices 2.6% above valuations

·      Over 600 new homes delivering in H1

 

 

Grainger plc, the UK's largest listed provider of private rental homes with a
c.£3.3bn operational portfolio of c.10,200 homes and a £1.6bn pipeline of a
further 5,634 build-to-rent homes 1  (#_ftn1) , today provides an update on
trading for the four months to the end of January 2024, alongside its AGM
which is being held today at its head office in Newcastle upon Tyne. The
Company will announce its half year results for the six-month period ending 31
March 2024 on 16 May 2024.

( )

Helen Gordon, Chief Executive of Grainger, said:

 

"Positive momentum continues within the business, underpinned by our market
leading operating platform. We are maintaining strong levels of rental growth
with like-for-like rents in our PRS/Build-to-rent portfolio growing 8.4%,
while maintaining healthy customer affordability levels. Occupancy remains
high at 97.2%. Our forward-looking key performance indicators show continued
high levels of rental demand over the coming months, supporting occupancy.

"Sales from our legacy regulated tenancy portfolio continue to perform well
with strong liquidity and pricing. The sales market is proving robust with a
high proportion of our sales going to 'best and final' bids. On average, we
are achieving sales prices 2.6% above valuations.

"Since our year end results in November, we have completed 307 homes at The
Copper Works in Cardiff and continue with the phased delivery of homes at
Weavers Yard in Newbury, with leasing in line with our underwriting
assumptions. In the next month we will see two new build-to-rent schemes
launching in Birmingham and Bristol totalling 606 homes.

"In line with our stated strategy, we are continuing to build on our
geographic clusters of PRS (build-to-rent) developments which delivers
operational and financial efficiencies, and we are on track with the delivery
of our committed pipeline which will deliver significant growth in EPRA
Earnings over the coming years."

 

Strong rental performance continues

 Our market-leading operational platform continues to deliver value.
 ·      Like-for-like rental growth continues strongly:                          Jan24  Jan23
 o  Total like-for-like rental growth YTD:                                       8.3%   6.1%
 o  PRS like-for-like rental growth YTD:                                         8.4%   6.1%
 § New Lets YTD:                                                                 8.5%   7.8%
 § Renewals YTD:                                                                 8.4%   5.0%
 o  Regulated tenancy like-for-like rental growth YTD:                           7.6%   6.2%
 ·      Occupancy in our PRS portfolio remains high (spot, as at 31 Jan):        97.2%  98.7%

 

Robust sales performance

 

·    Whilst an increasingly smaller part of the business (c.23% by value),
sales generated from our regulated tenancy portfolio as it unwinds (vacant
possession) continue to provide a reliable source of capital for our continued
growth.

·    We are seeing good levels of liquidity in the residential sales
market.

·    We continue to see strong pricing, achieving average sales prices
2.6% ahead of valuations.

·    As our regulated tenancy portfolio reduces in size, we would
naturally expect to see volumes of sales reduce. Last year, our portfolio
reduced by c.14% (now £760m as at September 2023 valuations), whilst our PRS
portfolio grows (£2.5bn).

·    As previously stated, we continue our elevated asset recycling
activity, selling tenanted properties, portfolios and land to reinvest the
capital into our build-to-rent pipeline and new higher-yielding opportunities.
We expect to deliver similar proceeds from sales for the full year, including
asset recycling, compared to last year.

 

Strong earnings growth momentum continues

 

·    Two new build-to-rent schemes in Birmingham and Bristol launching in
March, totaling 606 homes.

·    The operational leverage inherent in our business model ensures that
we remain on track to deliver significant growth in EPRA Earnings over the
coming years.

 

Outlook

 

The strong, compelling fundamentals of the UK residential rental market
continue to underpin our investment case. Demand for renting, and our product
specifically, remains exceptionally high. We continue to achieve record levels
of rental growth, and should wage growth ameliorate later this year, we expect
rental growth to continue be higher than historic averages, driven by our
market-leading operational platform. With local and national elections later
this year, we are comfortable that political and regulatory risk for our
business is low and that our responsible approach to delivering high quality
rental homes for the mid-market is very much aligned to the main political
parties' priorities.

 

-ENDS-

 

For further information:

 

Grainger plc

Helen Gordon / Rob Hudson / Kurt Mueller

London Office Tel: +44 (0) 20 7940 9500

 

Camarco (Financial PR adviser)

Ginny Pulbrook / Geoffrey Pelham-Lane

Tel: +44 (0) 20 3757 4992/4985

 1  (#_ftnref1) Last reported at FY23 Full Year Results in Nov 2023, figures
as at 30 Sept 2023

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTDBGDDLBGDGSL