REG - Grainger PLC - Half Year Financial Results
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RNS Number : 2324E Grainger PLC 14 May 2026
14 May 2026
Grainger plc
Half year financial results
for the six months ended 31 March 2026
Strong H1 performance
& excellent earnings outlook
§ Net rental income up +7.8%
§ EPRA Earnings up +4.0%
§ LfL rental growth +3.1%(1)
§ High occupancy at 96%
§ Dividend up +3.0%
§ On track to deliver EPRA earnings of £60m (+12%) by FY26; and £72m (+35%)
by FY29
Grainger plc, the UK's largest listed residential landlord and leader in the
build-to-rent (BTR) sector, today announces a strong financial performance for
the six months ended 31 March 2026, the company's first period reporting as a
REIT.
Helen Gordon, Chief Executive, said:
"Grainger continues to deliver a strong performance, despite operating in a
time of global and market uncertainty. We continue to build a resilient, high
quality income stream. Occupancy remains high, rental income continues to grow
along with our portfolio, and like-for-like rental growth continues in line
with expectations, underpinned by wage inflation.
"We are on track to deliver our target of £60m (8.1pps) EPRA Earnings for
this financial year, a 12% increase from FY25, and £72m (9.7pps) for FY29, a
35% increase. Grainger continues to deliver compounding earnings growth, with
strong EBITDA margin expansion continuing. We are again increasing our
dividend for the period, the 21(st) consecutive period of dividend growth.
"Earlier this month the new Renters' Rights Act took effect, which we have
supported from the beginning. The new legislation strikes a balance between
tenant and landlord rights, albeit it is contributing to structural changes in
the sector with smaller, private landlords exiting, and larger scale,
professional landlords gaining market share.
"Housing is a needs-based asset class. Everyone will always need a place to
live. Grainger's rental income is underpinned by wage inflation, with a
diversified, growing customer base and targeted asset clusters in the UK's
biggest cities. We have limited energy cost exposure, insulating us and our
customers from inflationary cost pressures over the coming months. We remain
focused on our financial discipline and have a clear capital allocation
strategy designed to deliver shareholder value, with a focus on reducing net
debt from our disposals programme in order to offset higher interest rates as
our low-cost debt facilities mature. And as we complete our committed pipeline
of high quality BTR schemes our earnings will grow as we leverage our
sector-leading operational platform.
"As the UK's only listed, scaled, pure‑play build‑to‑rent platform, we
continue to benefit from a structurally undersupplied rental market and
long‑duration, inflation‑linked income. The outlook for Grainger is
excellent."
HY26 HY25 Change
Net rental income(1) (Note 5) £66.1m £61.3m +8%
EPRA Earnings (2) £31.4m £30.2m +4%
EPRA EPS 4.2p 4.1p +4%
IFRS (loss)/profit (2) (Note 2) (£14.6m) 74.0m (120%)
Dividend per share(3) (Note 11) 2.94p 2.85p +3%
HY26 FY25 Change
EPRA NTA per share (Note 3) 290p 298p (3)%
Net debt £1,524m £1,463m +4%
Group LTV 40.2% 38.4% +186 bps
Cost of debt (average) 3.2% 3.3% (12) bps
HIGHLIGHTS
Strong rental growth & high occupancy
§ Increased net rental income by +7.8% to £66.1m (HY25: £61.3m)
§ Delivered +3.1% total like-for-like rental growth (FY25: +3.6%) with BTR
rental growth +2.9% (new lets +2.0% and renewals +3.3%), whilst regulated
tenancy rental growth was +5.9%
§ Strong demand; achieved high occupancy at 95.9% (FY25: 98.0%)
§ Customer affordability remains healthy, marginally improving to a
rent-to-income ratio of 27%
Strong earnings growth continues
§ EPRA Earnings increased to £31.4m (HY25: £30.2m)
§ Interim dividend increased +3% to 2.94p per share (HY25: 2.85pps)
§ On track to deliver targeted earnings growth from our committed pipeline to
£60m (8.1pps) by FY26 and £72m (9.7pps) by FY29
§ Following outward yield shift and subsequent modest valuation decline, IFRS
loss before tax of £(14.6)m
Strong balance sheet
§ EPRA NTA of 290p, after modest yield expansion reflecting macro sentiment
(FY25: 298p)
§ Extended £540m core banking facilities to 2033 at lower margins, resulting
in a reduction of finance costs of c.£1m per annum and a weighted average
facility maturity including extension options of 4.6 years
§ Highly cash generative with c.£200m+ operating cashflow per annum
§ Deleveraging plan supported by disposals programme with LTV forecast to
reduce over time to c.30% by FY29 and a Net debt to EBITDA ratio of c.8x
§ Ability to absorb higher interest rates and continue to deliver strong
earnings growth
Excellent earnings outlook, driving short, medium and long-term value creation
§ A clear capital allocation strategy, with a focus on delivering our
remaining onsite committed pipeline and deleveraging by £300-350m by FY29,
which will grow earnings by 35% by FY29. Future capital allocation
considerations will include share buy backs, acquisitions of stabilised assets
or committing to new developments, with a strong focus on whichever is most
accretive to shareholder returns at the appropriate time
§ Strong like-for-like rental growth expected to continue, supported by wage
inflation, expecting between 3.0-3.5% for the full year
§ Sector-leading operating platform will drive further efficiencies to
deliver EBITDA margin expansion from 56% in FY25 to 60% by FY29
§ Continuing strong year-on-year compounding earnings growth
( )
(1) Refer to Note 5 for net rental income calculation.
(2) Refer to Note 2 for IFRS profit before tax and EPRA earnings
reconciliation.
(3) Dividend - The dividend of 2.94p per share (gross) amounting to £21.7m,
all of which will be paid as a Property Income Distribution (PID), will be
paid on 3 July 2026 to shareholders on the register at the close of business
on 22 May 2026. Shareholders will again be offered the option to participate
in a dividend re-investment plan and the last day for election is 14 May 2026
- refer also to Note 11.
Future reporting dates
§ Trading Update - September 2026
§ Full year results - 19 November 2026
Half year results presentation
Grainger plc will be holding a presentation of the results at 9:00am (UK time)
today, 14 May 2026, 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_26 (https://brrmedia.news/GRI_HY_26)
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 HY26" 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 08:00am (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 may contain certain statements that are forward-looking
statements. They appear in a number of places throughout this announcement and
include statements regarding Grainger plc's (Grainger) intentions, beliefs or
current expectations and those of our officers, directors and employees
concerning, amongst other things, our results of operations, financial
condition, liquidity, prospects, growth, strategies and the business we
operate. By their nature, these statements involve risks and uncertainty since
future events and circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements reflect
knowledge and information available at the date of preparation of this
announcement and, unless otherwise required by applicable law, Grainger
undertakes no obligation to update or revise these forward-looking statements.
Nothing in this announcement should be construed as a profit forecast.
Grainger and its Directors accept no liability to third parties in respect of
this announcement save as would arise under English law.
Any forward-looking statements in this announcement speak only at the date of
this announcement and Grainger undertakes no obligation to update publicly or
review any forward-looking statement to reflect new information or events,
circumstances or developments after the date of this announcement.
Principal Risk & Uncertainties
Information about the management of the principal risks and uncertainties
facing Grainger are set out within the Annual Report and Accounts 2025. A
number of risks and uncertainties faced by the Group are not directly within
Grainger's control such as the wider economic and political environment.
In line with Grainger's risk management approach (detailed in the Annual
Report and Accounts 2025), the principal risks and uncertainties to the
business are under regular review by the Directors and by Management, applying
Grainger's risk management framework.
It is currently considered that the principal risks and uncertainties
previously reported remain Grainger's principal risks and uncertainties. The
risks and uncertainties continue to be monitored closely as well as the
potential controls and mitigants that may be applied.
These principal risks and uncertainties, and other factors could adversely
affect the outcome and financial effects of the events specified in this
announcement.
Nature of announcement
This announcement is for information purposes only and no reliance may be
placed upon it. No representative 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.
Chief Executive's review
Delivering compounding earnings growth
We have delivered a strong performance for the first half.
Net rental income has grown 7.8% from both robust like-for-like rental growth
of 3.1% and portfolio expansion as we build out our committed pipeline and
lease up our new buildings. This in turn drove earnings growth of 4.0% for the
period and we have increased the dividend 3.0% as a result.
We are on track to deliver significant EPRA earnings growth this year of 12%
from FY25 to £60m or 8.1p per share and 35% to £72m or 9.7pps by FY29.
Portfolio valuations have reduced 1.1% following modest yield expansion
reflecting macro sentiment with net asset value of our portfolio (EPRA NTA)
down to 290p. It is worth noting that over the past five years, the net asset
value of our portfolio has materially outperformed other real estate sectors
including industrial, retail and offices, and our NTA today is ahead of what
it was five years ago (HY21), unlike many other UK REITs.
Operationally, we performed strongly. Occupancy remains high at 95.9%. Rental
growth at 3.1% is in line with expectations and accelerating into H2, whilst
customer retention at 61% remains strong. Customer affordability
(rent-to-income ratio) has improved slightly to 27% and we maintain strong
rental margins with a gross-to-net of 25%, absorbing inflationary pressures on
our operations.
Disciplined capital management
Despite the strong performance of the business and robust operating
environment, we have faced a very challenging macroeconomic and geopolitical
landscape over the past six months. This challenging macro backdrop has put
pressure on shareholder returns.
We continually review how we allocate capital within our capital allocation
framework with shareholder returns front of mind. Our approach to capital
allocation has two immediate priorities: (1) delivering our committed pipeline
and the subsequent earnings growth this generates; and (2) deleveraging our
balance sheet by between £300-£350m by FY29 and bringing LTV to c.30% and
Net debt to EBITDA to c.8x, mitigating higher interest rates.
Deleveraging is the most accretive use of shareholder capital, reducing future
finance costs and protecting future earnings. Our proven disposals programme,
with c.£850m of low-yielding, non-core assets remaining, helps generate
c.£200m operating cashflow per annum to support this deleveraging.
Following these two immediate priorities, we have set out three actions we
will consider and determine which is most accretive for shareholder returns:
(1) share buy backs, (2) acquisitions of existing stabilised assets or (3)
committing to new development. We have significant optionality with our
disposals programme and pipeline to deliver strong shareholder returns.
Cost control
We remain committed to strict cost controls across the business. Central
overheads today are the same as they were 10 years ago. Through restructuring
and other initiatives we delivered £2m of annual cost savings at the
beginning of this financial year which will offset wage inflation, with
overheads to remain flat for this year and next.
When we deliver the growth from our committed pipeline, our scalable
operational platform, enabled by our CONNECT technology platform, means that
our central overheads will remain broadly the same, and therefore we will see
significant margin expansion with EBITDA margins growing to more than 60% by
FY29 (FY25: 56%), bringing us close to substantially larger US residential
REITs.
Market update
Our market, the build to rent (BTR) sector, is characterised by both its
positive growth drivers and low risk nature. With 5.6m households in the
rental market in the UK, BTR is growing but today represents only c.2.6% of
the market, demonstrating the significant opportunity for further growth.
Housing, including BTR, is a needs-based asset class. Everyone will always
need somewhere to live. AI will not disrupt this occupational requirement. The
ongoing exit from private individual landlords in the BTR sector is continuing
to add pressure on the supply of homes in the UK. The large disparity between
housing supply and demand in the UK remains and grows larger each day. BTR is
a scarce institutional asset class with strong fundamentals.
BTR homes have low obsolescence, with the fundamental design of a home that
endures. Rental housing exhibits low volatility. Through recent cycles rents
continued to grow and occupancy in our portfolio remained high, averaging
97.5% since Covid and averaging over 90% through the pandemic. BTR also has
low depreciation with no end-of-lease write downs and with ongoing repairs and
maintenance expensed through the income statement..
Our market has a growing, low-risk tenant base, which is diversified and
granular, and is significantly lower risk than other real estate sectors. Our
customer base has a very broad range of employment sectors, and our core
demographic group sees steady levels of employment and are at a point in their
lives when their careers and earnings are on an upward trajectory. Nearly
three-quarters of our customer base is between the ages of 25 and 44. Our
self-imposed student cap of 10% remains in place, a decision to distinguish
our communities from those of student accommodation.
BTR, as a real estate sub sector, has the characteristics of a 'HALO' trade
(Hard Asset, Low Obsolescence) and a 'PACE' trade (Physical Asset, Compounding
Earnings).
Regulatory changes - Renters' Rights Act
On 1 May 2026, the Renters' Rights Act came into force. We've successfully
transitioned to the new rules due to a business-wide focus on preparing for
the changes over a number of months.
As a provider of high quality, energy efficient homes, we remain confident in
our outlook and operational guidance under the new Act and will continue to
monitor our operational data daily to ensure we respond as necessary to
maintain ongoing performance.
Insulated from energy cost inflation
Grainger has limited exposure to energy costs with a direct energy bill of
only c.£2m. Equally, our customers benefit from highly energy efficient
properties, with 99.9% of our BTR homes with EPC ratings of A-C, resulting in
materially lower energy bills.
Our committed pipeline of development projects benefits from fixed price
contracts, meaning there is limited risk to construction cost inflation
affecting the delivery of our earnings targets.
Portfolio performance
Our carefully curated portfolio of high-quality assets in top locations
continues to prove its value through our operational performance and leasing
success.
Our city cluster strategy, targeting the cities with the greatest rental
demand, limited supply and strong economic growth prospects is delivering.
We see broadly similar rental growth and operational performance across our
key markets.
Political and future regulatory outlook
The Renters' Rights Act, now in force, was the biggest regulatory change to
the rental market in 40 years and we therefore expect no further major
legislative or regulatory changes directly aimed at our market over the coming
years.
We remain in active dialogue with policy makers and politicians across all
parties to ensure our sector is well understood and the positive role it plays
for the housing market, in local communities and for the economy.
Conclusion
Our business is resilient with high quality homes, high occupancy, robust
rental growth underpinned by wage inflation, a large, diverse and growing
customer base and strong customer affordability.
Our growth is locked-in. Our committed pipeline is under construction, and
with fixed priced contracts and an undersupplied market, we are confident of
achieving our stretching targets. We are on track to deliver significant EPRA
earnings growth this year of 12% from FY25 to £60m or 8.1pps and 35% to £72m
of 9.7pps by FY29. We are also on track to achieve our ambitious target of
>60% EBITDA margin by FY29, demonstrating the inherent scalability of our
operational platform enabled by our CONNECT technology platform and stable
central cost base.
Lastly, our capital allocation strategy sets a clear path for driving returns
and protecting our growing earnings. Whilst completing our committed pipeline,
we are focused on deleveraging to offset future rising finance costs,
supported by our accelerated disposals programme.
We are clear-eyed in our determination to deliver long-term shareholder value.
Helen Gordon
Chief Executive
13 May 2026
Financial review
The first half of FY26 delivered another strong set of results, driven by a
strong operational performance across the business. Healthy demand for our
homes continues, with occupancy strong at 95.9% and robust like-for-like
rental growth of 3.1%, in line with our expectations. These, combined with
pipeline deliveries, drove growth in net rental income of 7.8%.This growth
coupled with effective cost control resulted in pre-tax EPRA earnings growth
of 4.0%, and we are on track to achieve our target £60m for the full year
(representing 12% growth on FY25) and £72m by FY29 (c.35% growth on FY25).
Due to the challenging macroeconomic backdrop, valuations were marginally down
in the period, with ERV growth of 1.1% partially offsetting c.25bps of outward
yield shift. As a result of this 1.1% valuation decline, IFRS loss before tax
was £(14.6)m (HY25 profit: £74.0m). It is worth noting that over the past
five years, the net asset value of our portfolio has materially outperformed
other real estate sectors including industrial, retail and offices, and our
NTA today is ahead of what it was five years ago (HY21), unlike many other UK
REITs.
Our balance sheet remains in good shape with strong liquidity and a good
hedging profile. As expected, both H1 net debt and LTV are marginally
increased from the year end. We expect net debt to be broadly flat on FY25 by
FY26 year end. With c.£120m of committed capex left to spend we will start
using our significant operating cash flows to lower leverage by
c.£300m-£350m from FY27 onwards, in line with our plans.
With our new post-REIT dividend policy now in effect, our dividend per share
continues its growth trajectory, increasing by 3% to 2.94p on a per share
basis (HY25: 2.85p).
Financial highlights
Income return HY26 HY25 Change
Rental growth (like-for-like) 3.1% 4.4% (135) bps
- BTR 2.9% 4.2% (132) bps
- Regulated tenancies 5.9% 7.0% (107) bps
Net rental income (Note 5) £66.1m £61.3m +8%
EPRA earnings (Note 3) £31.4m £30.2m +4%
IFRS (loss)/profit before tax (Note 2) £(14.6)m £74.0m (120)%
Earnings per share (diluted, after tax) (Note 10) (2.1)p 7.5p (128)%
Dividend per share (Note 11) 2.94p 2.85p +3%
Capital return HY26 HY25 Change
Total Property Return 0.7% 2.5% (178) bps
Total Accounting Return (NTA basis) (Note 3) (1.0)% 2.0% (211) bps
HY26 FY25 Change
EPRA NTA per share (Note 3) 290p 298p (3)%
Net debt £1,524m £1,463m +4%
Group LTV 40.2% 38.4% 186 bps
Cost of debt (average) 3.2% 3.3% (12) bps
Income statement
We have continued to deliver good growth in EPRA earnings in H1, up 4.0% to
£31.4m (HY25: £30.2m). This was driven by both strong growth in net rents of
7.8% and a focus on cost efficiency, with overheads flat at £16.9m.
IFRS loss before tax was £(14.6)m (HY25 profit: £74.0m) as a result of
valuation decline.
HY26 HY25
Income statement (£m) Change
Net rental income 66.1 61.3 +8%
Mortgage income (CHARM, Note 16) 1.7 2.1 (19)%
Management fees and other income(1) 2.8 4.7 (40)%
Overheads (16.9) (16.9) -
Pre-contract costs (0.3) (0.3) -
Net finance costs (21.8) (20.8) (5)%
Joint ventures 0.1 0.1 -
EPRA earnings(2) 31.4 30.2 +4%
EPRA EPS 4.3p 4.1p +4%
Profit from sales 5.2 19.9 (74)%
Valuation movements (46.6) 28.7 (262)%
Other adjustments(3) (4.6) (4.8) +4%
IFRS (loss)/profit before tax (14.6) 74.0 (120)%
Earnings per share (diluted, after tax) (2.1)p 7.5p (128)%
1 Including LADs: "liquidated and ascertained damages" in HY25 of £3.6m
which provide financial compensation for the loss of rental income caused by
delays to the practical completion of our schemes
2 EPRA Earnings is a measure of recurring earnings from core operational
activities. For more details please see note 3.
3 Including derivative valuation movements of £3.4m (HY25: £2.9m) and
one-off restructuring costs of £1.2m (HY25: nil). HY25 also included a £1.9m
increase in fire safety provision.
Rental income
Net rental income grew strongly by 7.8% to £66.1m (HY25: £61.3m), as we saw
continued strength in occupational markets. The £4.8m increase was driven by
a combination of strong lease up of recent pipeline scheme launches which
contributed £5.7m along with another year of good rental growth reflecting
healthy demand for our product.
Overall like-for-like rental growth was in line with expectations and with our
long run average at +3.1% (FY25: +3.6%) with the BTR portfolio continuing to
deliver good rental growth at +2.9% (FY25: +3.4%), with rental growth on
renewals of +3.3% (FY25: +4.5%) and +2.0% (FY25: +1.8%) on new lets. Our
regulated tenancy portfolio also delivered strong rental growth at +5.9%
(FY25: +6.6%). Looking forward we expect full year BTR rental growth to be in
line with the long-run average rate of 3.0% - 3.5%, reflecting our normal
patterns of seasonality as demand grows into the second half.
Gross to net for our stabilised portfolio was stable at 25.0% (FY25: 25.0%) as
we continue our focus on cost efficiencies.
£m
HY25 Net rental income 61.3
Rental growth and occupancy 1.5
BTR Investment 5.7
Disposals (2.4)
HY26 Net rental income 66.1
Net finance costs
Finance costs were higher at £21.8m in the period (HY25: £20.8m) due to
one-off costs related to refinancing our bank debt, with the benefits of this
to be delivered in the second half and beyond.
Sales
Our disposals programme continued to deliver throughout the period with sales
revenue of £58.8m (HY25: £79.0m). Post half year end we have exchanged on a
further £23m of sales. Sales profits were lower at £5.2m (HY25: £19.9m) a
result of both the timing and mix of asset sales. Vacant property sales
profits in the period were down as expected, delivering £4.5m (HY25: £9.9m),
Vacancy rates were slightly higher at 8.2% (HY25: 6.5%), giving a strong sales
pipeline for the second half of the year. Pricing achieved remained robust
with sales values in line with previous vacant possession values.
Sales of tenanted and other properties delivered £0.7m of profit (HY25:
£10.0m) from £42.1m of revenue (HY25: £50.4m), reflecting a greater
proportion of PRS sales which were sold in line with book.
HY26 HY25
Sales (£m) Revenue Profit Revenue Profit
Residential sales on vacancy 16.7 4.5 28.6 9.9
Tenanted and other sales 42.1 0.7 50.4 10.0
Overall sales total 58.8 5.2 79.0 19.9
Overheads
Overheads remained flat in the half having implemented a c.£2m annualised
cost saving. This will keep our overheads flat during FY26 and FY27.
Balance sheet
Our BTR portfolio is now 85% of our operational portfolio due to the success
of both our pipeline delivery and regulated tenancy recycling.
Net debt increased marginally to £1,524m, as expected, reflecting investment
in our pipeline and our typically second half weighted sales. Since 31 March,
we have exchanged on a further £23m of sales. LTV was up on the year end at
40.2% (FY25: 38.4%) as values marginally declined as a result of the macro
economic uncertainty. Looking forward, we will lower net debt by
c.£300m-£350m by FY29 in order to mitigate the impact of rising finance
costs as our low rate hedging rolls off. This will be funded by our strong
operating cash flows.
EPRA NTA was down at 290p per share (FY25: 298p per share) reflecting an
outward yield shift of c.25bps in our valuation due to macroeconomic
uncertainty.
Market value balance sheet (£m) HY26 FY25
Residential - BTR 2,908 2,846
Residential - regulated tenancies 486 503
Residential - mortgages (CHARM) 44 49
Forward Funded - BTR work in progress 146 223
Development work in progress 104 93
Investment in JVs/associates 96 93
Total investments 3,784 3,807
Net debt (1,524) (1,463)
Other liabilities (40) (61)
EPRA NRV 2,220 2,283
Deferred and contingent tax - trading assets (63) (64)
Exclude: intangible assets (3) (2)
EPRA NTA 2,154 2,217
Add back: intangible assets 3 2
Deferred and contingent tax - investment assets (1) (1)
Fair value of fixed rate debt and derivatives 69 60
EPRA NDV 2,225 2,278
EPRA NRV pence per share 299 307
EPRA NTA pence per share 290 298
EPRA NDV pence per share 299 307
Pence per share
EPRA NTA at 30 September 2025 298
Net rents, fees & income 9
Overheads (2)
Finance costs (5)
EPRA earnings 2
Valuations (trading & investment property) (6)
Dividends, tax & other (6)
EPRA NTA at 31 March 2026 290
Property portfolio performance
Our portfolio valuation was down 1.1% over the period. Our BTR portfolio
valuation fell 1.4% over the half, driven by an outward yield movement of
c.25bps which was partly offset by continued good ERV growth of 1.1% in the
period. Valuations in the regulated portfolio were up 0.6% in the period.
Portfolio Region Capital Value Total Valuation movement
£m £m %
BTR London & SE 1,342 (17) (1.3)%
Regions 1,566 (23) (1.5)%
BTR total 2,908 (40) (1.4)%
Regulated tenancies London & SE 433 2 0.6%
Regions 53 1 1.0%
Regulated tenancy total 486 3 0.6%
Operational portfolio
BTR development 250 (1) (0.5)%
Total portfolio 3,644 (38) (1.1)%
Financing and capital structure
As expected, net debt was up in the period to £1,524m (FY25: £1,463m). The
committed investment in our pipeline of £80m was partially offset by our
continued asset recycling strategy generating £61m of net sales proceeds.
With c.£120m left to spend on our committed pipeline, we will start to use
operational cash flows to lower net debt from FY27, in line with our plans. We
expect net debt to be broadly flat on FY25 by FY26 year end.
We have low refinancing risk with an average debt maturity of 4.6 years
including extension options and continue to benefit from a very strong hedging
profile, which is in place until FY29. Our average cost of debt has remained
broadly flat at 3.2% (FY25: 3.3%). During the period, we have successfully
extended £540m of bank facilities to 2033 and reduced margins, giving an
annual saving of c.£1m on current debt levels.
As stated at the full year, we will lower our net debt by £300m-£350m over
FY27 to FY29, which would equate to a reduction in LTV to c.30% and c.8x net
debt to EBITDA, which we consider to be the appropriate capital structure for
the long term.
HY26 FY25
Net debt £1,524m £1,463m
Loan to value (LTV) 40.2% 38.4%
Cost of debt 3.2% 3.3%
Headroom £251m £532m
Weighted average facility maturity (years) 4.6 3.9
Hedging 94% 100%
Summary and outlook
The first half of FY26 was another period of strong growth in the business. We
maintain our prior guidance of targeting pre-tax EPRA earnings of £60m for
FY26 and £72m by FY29, a period over which we will absorb the substantial
headwind of higher interest rates. Despite current macroeconomic uncertainty,
we continue to demonstrate the resilience of our asset class and the
excellence of our team and operating platform. Our strong focus on operational
execution both now and in the years to come will continue to deliver excellent
earnings growth.
Rob Hudson
Chief Financial Officer
13 May 2026
Responsibility statement of the directors in respect of the half-yearly
financial report
Each member of the Board who was a Director during the period under review,
confirms to the best of their 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
13 May
2026
13 May 2026
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 2026 which comprises the Condensed Consolidated Income
Statement, the Condensed Consolidated Statement of Other Comprehensive Income,
the Condensed Consolidated Statement of Financial Position, the Condensed
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 2026 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
13 May 2026
Consolidated income statement
Unaudited
For the 6 months ended 31 March Notes 2026 2025
£m
£m
Group revenue 4 113.7 136.4
Net rental income 5 66.1 61.3
Profit on disposal of trading property 6 6.1 20.2
Loss on disposal of investment property 7 (0.9) (0.3)
(Loss)/gain from financial interest in property assets 16 (0.3) 1.5
Fees and other income 8 2.7 4.7
Administrative expenses (16.9) (16.9)
Other expenses (1.5) (2.2)
Reversal of impairment of inventories to net realisable value 13 1.1 1.0
Operating profit 56.4 69.3
Net valuation (loss)/gain on investment property 12 (44.8) 28.2
Hedge ineffectiveness under IFRS9 20 (3.4) (2.9)
Finance costs 9 (22.6) (22.4)
Finance income 9 0.8 1.6
Share of (loss)/profit of associates after tax 14 (0.2) 0.4
Share of loss of joint ventures after tax 15 (0.8) (0.2)
(Loss)/profit before tax 2 (14.6) 74.0
Tax charge for the period 21 (1.2) (18.6)
(Loss)/profit for the period attributable to the owners of the Company (15.8) 55.4
Basic (loss)/earnings per share 10 (2.1)p 7.5p
Diluted (loss)/earnings per share 10 (2.1)p 7.5p
Consolidated statement of comprehensive income
Unaudited
For the 6 months ended 31 March Notes 2026 2025
£m
£m
(Loss)/profit for the period 2 (15.8) 55.4
Items that will not be transferred to the consolidated income statement:
Actuarial loss on BPT Limited defined benefit pension scheme 22 (0.1) (0.1)
Items that may be or are reclassified to the consolidated income statement:
Changes in fair value of cash flow hedges 1.6 0.2
Other comprehensive income and expense for the period before tax 1.5 0.1
Tax relating to components of other comprehensive income:
Tax relating to items that may be or are reclassified to the consolidated 21 0.7 (0.1)
income statement
Total tax relating to components of other comprehensive income 0.7 (0.1)
Other comprehensive income and expense for the period after tax 2.2 -
Total comprehensive income and expense for the period attributable to the (13.6) 55.4
owners of the Company
Consolidated statement of financial position
Unaudited Audited
31 March 2026 30 Sept
2025
As at Notes £m £m
ASSETS
Non-current assets
Investment property 12 2,966.0 3,059.4
Property, plant and equipment 8.5 9.2
Investment in associates 14 15.0 15.2
Investment in joint ventures 15 80.7 77.5
Financial interest in property assets 16 43.6 48.6
Retirement benefits 22 6.2 6.2
Deferred tax assets 21 4.1 4.6
Intangible assets 3.1 2.9
3,127.2 3,223.6
Current assets
Inventories - trading property 13 292.1 298.6
Investment property - held for sale 12 144.4 64.9
Trade and other receivables 17 109.2 79.2
Derivative financial instruments 20 22.4 14.1
Current tax assets 1.8 5.6
Cash and cash equivalents 65.9 85.8
635.8 548.2
Total assets 3,763.0 3,771.8
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings 20 1,573.7 1,515.1
Trade and other payables 18 5.5 5.7
Provisions for other liabilities and charges 19 0.7 0.7
Deferred tax liabilities 21 7.2 8.2
1,587.1 1,529.7
Current liabilities
Interest-bearing loans and borrowings 20 83.9 75.0
Trade and other payables 18 94.5 115.3
Provisions for other liabilities and charges 19 10.4 12.0
188.8 202.3
Total liabilities 1,775.9 1,732.0
NET ASSETS 1,987.1 2,039.8
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 5.0 2.7
Retained earnings 1,106.6 1,161.6
TOTAL EQUITY 1,987.1 2,039.8
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 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 expense 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
Total comprehensive expense - - - - - (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
Profit for the period - - - - - 147.2 147.2
Other comprehensive expense for the period - - - - (1.8) (0.1) (1.9)
Total comprehensive income - - - - (1.8) 147.1 145.3
Share-based payments charge - - - - - 2.4 2.4
Dividends paid - - - - - (21.1) (21.1)
Total transactions with owners recorded directly in equity - - - - - (18.7) (18.7)
Balance as at 30 September 2025 37.2 817.9 20.1 0.3 2.7 1,161.6 2,039.8
Loss for the period 2 - - - - - (15.8) (15.8)
Other comprehensive income for the period - - - - 2.3 (0.1) 2.2
Total comprehensive expense - - - - 2.3 (15.9) (13.6)
Purchase of own shares - - - - - - -
Share-based payments charge 23 - - - - - 1.3 1.3
Dividends paid 11 - - - - - (40.4) (40.4)
Total transactions with owners recorded directly in equity - - - - - (39.1) (39.1)
Balance as at 31 March 2026 37.2 817.9 20.1 0.3 5.0 1,106.6 1,987.1
Consolidated statement of cash flows
Unaudited
For the 6 months ended 31 March Notes 2026 2025
£m
£m
Cash flow from operating activities
(Loss)/profit for the period 2 (15.8) 55.4
Depreciation and amortisation 0.9 0.9
Net valuation loss/(gains) on investment property 12 44.8 (28.2)
Net finance costs 9 21.8 20.8
Hedge ineffectiveness under IFRS9 20 3.4 2.9
Share of loss/(profit) of associates and joint ventures 14, 15 1.0 (0.2)
Loss on disposal of investment property 7 0.9 0.3
Share-based payment charge 23 1.3 1.2
Loss/(gain) from financial interest in property assets 16 0.3 (1.5)
Provisions for liabilities and charges 19 - 1.6
Tax charge 21 1.2 18.6
Cash generated from operating activities before changes in working capital 59.8 71.8
(Increase)/decrease in trade and other receivables (2.7) 6.6
Decrease in trade and other payables (6.9) (0.9)
Decrease in inventories 6.5 21.0
Cash generated from operating activities 56.7 98.5
Interest paid (24.9) (26.0)
Interest received 0.8 1.0
Cash outflow from fire safety remediation work (1.6) (1.0)
Tax received/(paid) 2.8 (8.0)
Net cash inflow from operating activities 33.8 64.5
Cash flow from investing activities
Proceeds from sale of investment property 7 9.0 63.8
Proceeds from financial interest in property assets 16 4.7 5.7
Investment in joint ventures 15 (4.8) (1.4)
Loans advanced to joint ventures 15 (1.9) (0.9)
Loans repaid by joint ventures 15 2.7 -
Acquisition of investment property 12 (68.1) (76.4)
Acquisition of property, plant and equipment and intangible assets (0.5) (0.6)
Net cash outflow from investing activities (58.9) (9.8)
Cash flow from financing activities
Purchase of own shares - (0.1)
Proceeds from new borrowings 181.4 146.0
Payment of loan costs (0.3) (1.9)
Cash flows relating to new derivatives/settlement of derivatives (10.1) (4.0)
Repayment of borrowings (125.4) (176.0)
Dividends paid 11 (40.4) (37.0)
Net cash inflow/(outflow) from financing activities 5.2 (73.0)
Net decrease in cash and cash equivalents (19.9) (18.3)
Cash and cash equivalents at the beginning of the period 85.8 93.2
Cash and cash equivalents at the end of the period 65.9 74.9
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 2025
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 2026 Consolidated Income Statement are the six month period ended 31
March 2025 Consolidated Income Statement. It is therefore not necessary to
disclose the Consolidated Income Statement for the full year ended 30
September 2025 (available in the last annual report).
The comparative figures for the financial year ended 30 September 2025 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 Allsop LLP and CBRE Limited as well as Savills
who have been appointed in the period. The valuation process is consistent
with the approach set out on pages 139-141 of the 2025 Annual Report and
Accounts, with the exception being the Group's Residential portfolio valued by
Allsop LLP. At the half year, Allsop LLP inspected 26.8% 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 ONS 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 2026 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 21 - Lack of exchangeability.
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 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.
IFRS 18 is set to supersede IAS 1 Presentation of Financial Statements and
will apply to reporting periods beginning on or after 1 January 2027. The new
standard does not change how items are recognised or measured in the Financial
Statements; however, it is expected to bring significant changes to how
information is presented and disclosed. Management is currently evaluating how
the adoption of IFRS 18 may affect the Group's consolidated Financial
Statements.
Notes to the unaudited interim financial results continued
1c Significant judgements and estimates
Full details of critical accounting estimates are given on pages 139-142 of
the 2025 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 61-69 of the 2025 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 61-64 of the 2025
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 2026.
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 2026 to 30 September 2027.
The assessment considers a severe but plausible downside scenario, reflecting
the following key assumptions:
• Reducing PRS occupancy to 93.0% by 30 September 2026 and to 86.0%
by 30 September 2027
• Rental growth reduced by 100bps in FY26 and FY27
• Reducing property valuations by 15.0% by 30 September 2026
remaining 15.0% down by 30 September 2027, 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 2026
• Credit rating downgrade to increase coupon rates on corporate
bonds by 1.25% from 1 April 2026
The Directors consider these assumptions appropriate given the majority of
costs are incurred under fixed term price contracts, development agreements,
or are under the company's control.
Notes to the unaudited interim financial results continued
During H2 FY26 £75m of the Rothesay Life facility will expire in July 2026,
with the remaining £75m to mature in October 2027 at the end of the going
concern period. The other existing facilities are assumed to remain available.
Upon expiry, the Rothesay facilities will be repaid out of existing undrawn
debt facilities and ongoing sales. Even in the severe but plausible downside
scenario, the Group has sufficient cash reserves, with the loan-to-value
covenant remaining no higher than 49% (facility maximum covenant ranges
between 70% - 75%) and interest cover no lower than 3.08x (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 2026.
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 EPRA 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 business and excludes sales profit,
valuation movements and other adjustments which do not form part of the normal
ongoing revenue or costs of the business. EPRA earnings are presented on page
39, and the reconciliation from statutory profit to EPRA earnings is shown
below.
For the 6 months ended
31 March 2026 (unaudited)
£m Statutory Profit on disposals Valuation Other adjustments EPRA earnings
Group revenue 113.7 - - - 113.7
Net rental income 66.1 - - - 66.1
Profit on disposal of trading property 6.1 (6.1) - - -
Loss on disposal of investment property (0.9) 0.9 - - -
Loss from financial interest in property assets (0.3) - 2.0 - 1.7
Fees and other income 2.7 - - - 2.7
Administrative expenses (16.9) - - - (16.9)
Other expenses (1.5) - - 1.2 (0.3)
Reversal of impairment of inventories to net realisable value 1.1 (1.1) - -
-
Operating profit 56.4 (5.2) 0.9 1.2 53.3
Net valuation loss on investment property (44.8) - 44.8 - -
Hedge ineffectiveness under IFRS9 (3.4) - - 3.4 -
Finance costs (22.6) - - - (22.6)
Finance income 0.8 - - - 0.8
Share of loss of associates after tax (0.2) - 0.9 - 0.7
Share of loss of joint ventures after tax (0.8) - - - (0.8)
(Loss)/profit before tax (14.6) (5.2) 46.6 4.6 31.4
Tax charge for the period (1.2)
Loss for the period attributable to the owners of the Company (15.8)
Basic EPRA earnings per share 4.2p
Diluted EPRA earnings per share 4.2p
Notes to the unaudited interim financial results continued
For the 6 months ended
31 March 2025 (unaudited)
£m Statutory Profit on disposals Valuation Other adjustments EPRA earnings
Group revenue 136.4 - - - 136.4
Net rental income 61.3 - - - 61.3
Profit on disposal of trading property 20.2 (20.2) - - -
Loss on disposal of investment property (0.3) 0.3 - - -
Gain from financial interest in property assets 1.5 - 0.6 - 2.1
Fees and other income 4.7 - - - 4.7
Administrative expenses (16.9) - - - (16.9)
Other expenses (2.2) - - 1.9 (0.3)
Reversal of impairment of inventories to net realisable value 1.0 (1.0) - -
-
Operating profit 69.3 (19.9) (0.4) 1.9 50.9
Net valuation gain on investment property 28.2 - (28.2) - -
Hedge ineffectiveness under IFRS9 (2.9) - - 2.9 -
Finance costs (22.4) - - - (22.4)
Finance income 1.6 - - - 1.6
Share of profit of associates after tax 0.4 - (0.1) - 0.3
Share of loss of joint ventures after tax (0.2) - - - (0.2)
Profit before tax 74.0 (19.9) (28.7) 4.8 30.2
Tax charge for the period (18.6)
Profit for the period attributable to the owners of the Company 55.4
Basic EPRA earnings per share 3.1p
Diluted EPRA earnings per share 3.1p
EPRA earnings of £31.4m (2025: £30.2m) are presented in the tables above.
EPRA earnings per share assumes tax of £nil at an effective tax rate of nil%
following the Group's conversion to REIT status (2025: £7.6m, in line with
the standard rate of UK Corporation Tax of 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 £nil for fire safety provisions (2025:
£1.9m), restructuring costs of £1.2m (2025: £nil) and hedge ineffectiveness
under IFRS9 of £3.4m (2025: £2.9m).
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 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.
Notes to the unaudited interim financial results continued
March 2026 Income statement (unaudited)
For the 6 months ended 31 March 2026 PRS Reversionary Other Total
£m
Group revenue
Segment revenue - external 84.7 28.0 1.0 113.7
Net rental income 60.7 4.8 0.6 66.1
Income from financial interest in property assets - 1.7 - 1.7
Fees and other income 1.3 - 1.4 2.7
Administrative expenses - - (16.9) (16.9)
Other expenses (0.3) - - (0.3)
Net finance costs (18.3) (3.0) (0.5) (21.8)
Share of trading loss of joint ventures and associates 0.1 - (0.2) (0.1)
after tax
EPRA earnings 43.5 3.5 (15.6) 31.4
Profit on disposal of trading property - 6.1 - 6.1
Loss on disposal of investment property (0.9) - - (0.9)
Valuation movements (45.9) (0.7) - (46.6)
Other adjustments - - (4.6) (4.6)
Loss before tax (3.3) 8.9 (20.2) (14.6)
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
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
EPRA earnings 42.4 4.2 (16.4) 30.2
Profit on disposal of trading property (0.4) 20.6 - 20.2
Loss on disposal of investment property (0.3) - - (0.3)
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
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 (0.8)% is calculated from the closing EPRA NTA of
290p per share plus the dividend paid of 5.46p per share in the period,
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 2026 Segment net assets (unaudited)
£m PRS Reversionary Other Total Pence per share
Total segment net assets (statutory) 1,868.9 86.1 32.1 1,987.1 267
Total segment net assets (EPRA NRV) 1,872.6 305.2 42.8 2,220.6 299
Total segment net assets (EPRA NTA) 1,869.8 250.4 34.1 2,154.3 290
Total segment net assets (EPRA NDV) 1,868.8 250.4 105.3 2,224.5 299
March 2026 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) 3,110.4 - 3,110.4 - 3,110.4 - 3,110.4
Investment in joint ventures and associates 95.7 - 95.7 - 95.7 - 95.7
Financial interest in property assets 43.6 - 43.6 - 43.6 - 43.6
Inventories - trading property 292.1 241.7 533.8 - 533.8 - 533.8
Cash and cash equivalents 65.9 - 65.9 - 65.9 - 65.9
Other assets 155.3 (12.0) 143.3 (3.1) 140.2 25.0 165.2
Total assets 3,763.0 229.7 3,992.7 (3.1) 3,989.6 25.0 4,014.6
Interest-bearing loans and borrowings (1,657.6) - (1,657.6) - (1,657.6) 69.0 (1,588.6)
Deferred and contingent tax liabilities (7.2) 3.8 (3.4) (63.2) (66.6) (23.8) (90.4)
Other liabilities (111.1) - (111.1) - (111.1) - (111.1)
Total liabilities (1,775.9) 3.8 (1,772.1) (63.2) (1,835.3) 45.2 (1,790.1)
Net assets 1,987.1 233.5 2,220.6 (66.3) 2,154.3 70.2 2,224.5
(1) Includes investment property - held for sale.
Notes to the unaudited interim financial results continued
September 2025 Segment net assets (audited)
£m PRS Reversionary Other Total Pence per share
Total segment net assets (statutory) 1,911.1 104.3 24.4 2,039.8 274
Total segment net assets (EPRA NRV) 1,915.1 327.5 40.5 2,283.1 307
Total segment net assets (EPRA NTA) 1,912.1 271.7 32.8 2,216.6 298
Total segment net assets (EPRA NDV) 1,911.1 271.7 95.2 2,278.0 307
September 2025 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(1) 3,124.3 - 3,124.3 - 3,124.3 - 3,124.3
Investment in joint ventures and associates 92.7 - 92.7 - 92.7 - 92.7
Financial interest in property assets 48.6 - 48.6 - 48.6 - 48.6
Inventories - trading property 298.6 242.4 541.0 - 541.0 - 541.0
Cash and cash equivalents 85.8 - 85.8 - 85.8 - 85.8
Other assets 121.8 (3.1) 118.7 (2.9) 115.8 (3.3) 112.5
Total assets 3,771.8 239.3 4,011.1 (2.9) 4,008.2 (3.3) 4,004.9
Interest-bearing loans and borrowings (1,590.1) - (1,590.1) - (1,590.1) 65.7 (1,524.4)
Deferred and contingent tax liabilities (8.2) 4.0 (4.2) (63.6) (67.8) (1.0) (68.8)
Other liabilities (133.7) - (133.7) - (133.7) - (133.7)
Total liabilities (1,732.0) 4.0 (1,728.0) (63.6) (1,791.6) 64.7 (1,726.9)
Net assets 2,039.8 243.3 2,283.1 (66.5) 2,216.6 61.4 2,278.0
(1) Includes investment property - held for sale.
4. Group revenue
Unaudited
2026 2025
£m
£m
Gross rental income (Note 5) 89.3 84.1
Gross proceeds from disposal of trading property (Note 6) 21.7 47.6
Fees and other income (Note 8) 2.7 4.7
113.7 136.4
5. Net rental income
Unaudited
2026 2025
£m
£m
Gross rental income 89.3 84.1
Property operating expenses (23.2) (22.8)
66.1 61.3
Notes to the unaudited interim financial results continued
6. Profit on disposal of trading property
Unaudited
2026 2025
£m
£m
Gross proceeds from disposal of trading property 21.7 47.6
Selling costs (0.7) (1.2)
Net proceeds from disposal of trading property 21.0 46.4
Carrying value of trading property sold (Note 13) (14.9) (26.2)
6.1 20.2
7. Loss on disposal of investment property
Unaudited
2026 2025
£m
£m
Gross proceeds from disposal of investment property 37.0 31.4
Selling costs (0.7) (0.9)
Net proceeds from disposal of investment property 36.3 30.5
Carrying value of investment property sold (Note 12) (37.2) (30.8)
(0.9) (0.3)
8. Fees and other income
Unaudited
2026 2025
£m
£m
Property and asset management fee income 1.2 1.2
Other sundry income 1.5 3.5
2.7 4.7
Included within other sundry income in the current period is £nil (2025:
£3.5m) 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
2026 2025
£m
£m
Finance costs
Bank loans and mortgages 8.5 11.4
Non-bank financial institution 4.2 3.2
Corporate bond 11.2 11.4
Interest capitalised under IAS 23 (3.4) (5.4)
Other finance costs 2.1 1.8
22.6 22.4
Finance income
Interest receivable from joint ventures (Note 24) (0.4) (0.6)
Other interest receivable (0.4) (1.0)
(0.8) (1.6)
Net finance costs 21.8 20.8
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 2026 31 March 2025
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 (loss)/earnings per share
(Loss)/profit attributable to equity holders (15.8) 739.6 (2.1) 55.4 738.5 7.5
Effect of potentially dilutive securities
Share options and contingent shares - 4.0 - - 3.7 -
Diluted (loss)/earnings per share
(Loss)/profit attributable to equity holders (15.8) 743.6 (2.1) 55.4 742.2 7.5
11. Dividends
The Company has announced an interim dividend of 2.94p (March 2025: 2.85p) per
share, all of which will be paid as a Property Income Distribution (PID),
which will return £21.7m (March 2025: £21.0m) to shareholders. In the six
months ended 31 March 2026, the final dividend for the year ended 30 September
2025 which amounted to £40.4m has been paid.
12. Investment property
Unaudited Audited
30 Sept
31 March
2026 2025
£m
£m
Opening balance 3,124.3 3,028.3
Acquisitions 6.2 20.0
Capital expenditure - completed assets 4.7 17.2
Capital expenditure - assets under construction 57.2 111.2
Total additions 68.1 148.4
Disposals (Note 7) (37.2) (81.9)
Net valuation (loss)/gain on investment properties (44.8) 29.5
3,110.4 3,124.3
Reclassifications to investment property - held for sale (144.4) (64.9)
Closing balance 2,966.0 3,059.4
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 £144.4m (September 2025: £64.9m). 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
2026 2025
£m
£m
Opening balance 298.6 331.6
Additions 7.3 11.9
Disposals (Note 6) (14.9) (45.5)
Reversal of impairment of inventories to net realisable value 1.1 0.6
Closing balance 292.1 298.6
14. Investment in associates
Unaudited 31 March Audited
30 Sept
2026 2025
£m
£m
Opening balance 15.2 14.9
Share of (loss)/profit for the period (0.2) 0.6
Dividends paid - (0.3)
Closing balance 15.0 15.2
The closing balance comprises share of net assets of £0.5m (September 2025:
£0.7m) and net loans due from associates of £14.5m (September 2025:
£14.5m). At the balance sheet date, there is no expectation of any material
credit losses on loans due.
As at 31 March 2026, 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
2026 2025
£m
£m
Opening balance 77.5 76.4
Share of loss for the period (0.8) (4.3)
Further investment(1) 4.8 3.7
Loans advanced to joint ventures 1.9 1.7
Loans repaid by joint ventures (2.7) -
Closing balance 80.7 77.5
(1) Grainger invested £4.8m into Connected Living London (BTR) Limited in the
period (September 2025: £3.7m).
The closing balance comprises share of net assets of £50.2m (September 2025:
£46.1m) and net loans due from joint ventures of £30.5m (September 2025:
£31.4m). 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 2026, 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
2026 2025
£m
£m
Opening balance 48.6 57.4
Cash received from the instrument (4.7) (9.9)
Amounts taken to income statement (0.3) 1.1
Closing balance 43.6 48.6
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
2026 2025
£m
£m
Rent and other tenant receivables 5.2 4.5
Deduct: Provision for impairment (1.8) (1.6)
Rent and other tenant receivables - net 3.4 2.9
Restricted deposits 85.0 57.7
Other receivables 15.7 12.7
Prepayments 5.1 5.9
Closing balance 109.2 79.2
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 £5.2m (September 2025: £4.5m). 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
2026 2025
£m
£m
Current liabilities
Deposits received 13.9 13.9
Trade payables 13.4 22.7
Lease liabilities 0.4 0.6
Tax and social security costs 1.2 0.8
Accruals 56.2 66.0
Deferred income 9.4 11.3
94.5 115.3
Non-current liabilities
Lease liabilities 5.5 5.7
5.5 5.7
Total trade and other payables 100.0 121.0
Within accruals, £40.0m comprises accrued expenditure in respect of ongoing
construction activities (September 2025: £46.0m).
19. Provisions for other liabilities and charges
Unaudited Audited
30 Sept
31 March
2025
2026
£m
£m
Current provisions for other liabilities and charges
Opening balance 12.0 13.2
Additions - 1.9
Utilisation (1.6) (3.1)
10.4 12.0
Non-current provisions for other liabilities and charges
Opening balance 0.7 1.0
Reversal - (0.3)
0.7 0.7
Total provisions for other liabilities and charges 11.1 12.7
Current provisions relate to potential fire safety remediation costs relating
to a small number of legacy properties that Grainger historically had an
involvement in developing and are expected to require fire safety related
remediation works. These were first recognised in the year ended 30 September
2022 after an extensive assessment of the Group's legal and constructive
obligations arising from the Building Safety Act 2022 and other associated
fire regulations, and based on the results of relevant surveys which were
commissioned. The provision is based on the latest estimation of costs to be
incurred, offset by costs incurred to date. Where fire safety works are
required and the Group owns the properties, the cost is considered as part of
the valuation of those properties. Where appropriate, the Group is seeking
recoveries from contractors and insurers. This activity has not been
quantified in the financial statements as it is not considered to meet asset
recognition criteria.
Notes to the unaudited interim financial results continued
20. Interest-bearing loans and borrowings and financial risk management
Unaudited Audited
30 Sept
31 March
2026 2025
£m
£m
Current liabilities
Bank loans - Pound Sterling 0.9 -
Non-bank financial institution 75.3 75.0
Corporate Bond 7.7 -
83.9 75.0
Non-current liabilities
Bank loans - Pounds sterling 603.0 544.1
Bank loans - Euros - 0.7
Non-bank financial institution 273.5 273.5
Corporate bonds 697.2 696.8
1,573.7 1,515.1
Total interest-bearing loans and borrowings 1,657.6 1,590.1
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
2026, unamortised costs totalled £9.1m (September 2025: £11.7m) and the
outstanding discount was £1.2m (September 2025:
£1.3m).
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 2026 and as at 30 September 2025.
As at 31 March 2026, the fair value of the non-bank loans is £330.8m
(September 2025: £331.1m), 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 2026 30 September 2025
Assets Liabilities Assets Liabilities
£m
£m
£m
£m
Level 3
CHARM 43.6 - 48.6 -
Investment property(1) 3,110.4 - 3,124.3 -
3,154.0 - 3,172.9 -
Level 2
Interest rate swaps - in cash flow hedge accounting relationships 22.4 - 14.1 -
22.4 - 14.1 -
(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 Savills, 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 2026 2025
£m
£m
Opening balance 3,172.9 3,085.7
Amounts taken to income statement (45.1) 30.6
Other movements 26.2 56.6
Closing balance 3,154.0 3,172.9
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 £3.4m (2025: £2.9m).
Notes to the unaudited interim financial results continued
21. Tax
The tax charge for the period of £1.2m (2025: £18.6m) recognised in the
consolidated income statement comprises:
Unaudited
2026 2025
£m
£m
Current tax
Corporation tax on (loss)/profit 1.1 9.5
1.1 9.5
Deferred tax
Origination and reversal of temporary differences 0.1 9.1
0.1 9.1
Total tax charge for the period 1.2 18.6
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 taxable results for this period are taxed at the standard rate of
25.0% (2025: 25.0%). Property Rental Business profits are exempt from
corporation tax as a result of the Group's REIT status.
In addition to the above, a deferred tax credit of £0.7m (2025: charge
£0.1m) was recognised within other comprehensive income comprising:
Unaudited
2026 2025
£m
£m
Fair value movement in cash flow hedges (0.7) 0.1
Amounts recognised in other comprehensive income (0.7) 0.1
Deferred tax balances comprise temporary differences attributable to:
Unaudited 31 March 2026 Audited
£m
30 Sept
2025
£m
Deferred tax assets
Short-term temporary differences 4.1 4.6
4.1 4.6
Deferred tax liabilities
Trading property uplift to fair value on business combinations (2.9) (3.0)
Investment property revaluation (1.0) (1.0)
Short-term temporary differences (2.8) (2.4)
Fair value movement in financial interest in property assets (0.2) (0.7)
Actuarial gain on BPT Limited defined benefit pension scheme (0.1) (0.2)
Fair value movement in derivative financial instruments (0.2) (0.9)
(7.2) (8.2)
Total deferred tax (3.1) (3.6)
Deferred tax has been calculated at a rate of 25.0% (September 2025: 25.0%) in
line with the enacted main rate of corporation tax.
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
amount it £60.4m, calculated at 25.0% (September 2025: £60.6m, calculated at
25.0%) and will be realised as the properties are sold.
22. Retirement benefits
The Group retirement benefit asset remained at £6.2m at the six months ended
31 March 2026. This movement has arisen from a £0.6m reduction on plan assets
offset by gains due to changes in assumptions of £0.6m (primarily market
observable discount rates and inflationary expectations). The principal
actuarial assumptions used to reflect market conditions as at 31 March 2026
are as follows:
Unaudited Audited
31 March 2026 30 Sept 2025
% %
Discount rate 6.0 5.8
Retail Price Index (RPI) inflation 3.6 3.0
Consumer Price Index (CPI) inflation 2.9 2.3
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 £1.3m (2025: £1.2m).
24. Related party transactions
During the period ended 31 March 2026, 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 2026 31 March 2025
Fees Period end Fees Period end
recognised
balance
recognised
balance
£'000
£'000
£'000
£'000
Connected Living London (BTR) Limited 323 330 280 347
Lewisham Grainger Holdings LLP 64 717 74 587
Vesta Limited Partnership 410 206 405 198
797 1,253 759 1,132
Unaudited Audited
31 March 2026 30 Sept 2025
Interest Period end loan Interest Interest Period end loan Interest
recognised
balance
rate
recognised
balance
rate
£'000
£m
%
£'000
£m
%
Curzon Park Limited - 17.7 Nil - 18.1 Nil
Lewisham Grainger Holdings LLP 379 12.8 5.6 921 13.2 5.8
Vesta LP - 14.5 Nil - 14.5 Nil
379 45.0 921 45.8
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 2026 31 March 2025
Earnings Shares Pence per Earnings Shares Pence per share
£m millions share £m millions
Earnings per IFRS income statement (14.6) 739.6 (2.0) 74.0 738.5 10.0
Adjustments to calculate EPRA Earnings, exclude:
i) Changes in value of investment properties, development properties held for 46.8 - 6.3 (27.6) - (3.7)
investment and other interests
ii) Profits or losses on disposal of investment properties, development 0.9 - 0.1 0.3 - -
properties held for investment and other interests
iii) Profits or losses on sales of trading properties including impairment (7.2) - (1.0) (21.2) - (2.9)
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 3.4 - 0.5 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 0.9 - 0.1 (0.1) - -
x) Non-controlling interests in respect of the above - - - - - -
xi) Other adjustments in respect of adjusted earnings 1.2 - 0.2 1.9 - 0.3
EPRA Earnings/Earnings per share 31.4 739.6 4.2 30.2 738.5 4.1
EPRA Earnings per share after tax 4.2 3.1
EPRA Earnings have been divided by the basic average number of shares shown in
Note 10 to these financial statements to calculate earnings per share. EPRA
earnings per share assumes an effective tax rate of nil% following the Group's
conversion to REIT status (2025: in line with the standard rate of UK
Corporation Tax of 25.0%).
EPRA Performance Measures - Unaudited (continued)
EPRA NRV, EPRA NTA and EPRA NDV
31 March 2026 30 Sept 2025
EPRA NRV EPRA NTA EPRA NDV EPRA NRV EPRA NTA EPRA NDV
£m £m £m £m £m £m
IFRS Equity attributable to shareholders 1,986.9 1,986.9 1,986.9 2,039.8 2,039.8 2,039.8
Include/Exclude:
i) Hybrid Instruments - - - - - -
Diluted NAV 1,986.9 1,986.9 1,986.9 2,039.8 2,039.8 2,039.8
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 5.0 5.0 5.0 7.5 7.5 7.5
iii) Revaluation of tenant leases held as finance leases - - - - - -
iv) Revaluation of trading properties 244.5 181.3 181.3 245.4 181.8 181.8
Diluted NAV at Fair Value 2,236.4 2,173.2 2,173.2 2,292.7 2,229.1 2,229.1
Exclude:
v) Deferred tax in relation to fair value gains of IP 1.0 1.0 - 1.0 1.0 -
vi) Fair value of financial instruments (16.8) (16.8) - (10.6) (10.6) -
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 - (2.7) - - (2.5) -
Include:
ix) Fair value of fixed interest rate debt - - 51.7 - - 49.3
x) Revalue of intangibles to fair value - - - - - -
xi) Real estate transfer tax - - - - - -
NAV 2,220.6 2,154.3 2,224.5 2,283.1 2,216.6 2,278.0
Fully diluted number of shares 743.1 743.1 743.1 743.1 743.1 743.1
NAV
NAV pence per share 299 290 299 307 298 307
EPRA Performance Measures - Unaudited (continued)
EPRA NIY
31 March 30 Sept
2026 2025
£m
£m
Investment property - wholly-owned 3,110.4 3,124.3
Investment property - share of JVs/Funds 70.5 67.6
Trading property (including share of JVs) 533.8 541.0
Less: developments (305.7) (369.1)
Completed property portfolio 3,409.0 3,363.8
Allowance for estimated purchaser's costs 194.2 188.9
Gross up completed property portfolio valuation B 3,603.2 3,552.7
Annualised cash passing rental income 176.5 177.6
Property outgoings (46.0) (48.8)
Annualised net rents A 130.5 128.8
Add: rent incentives 0.7 0.7
'Topped up' net annualised rents C 131.2 129.5
EPRA NIY A/B 3.6% 3.6%
EPRA 'topped up' NIY C/B 3.6% 3.6%
Gross up completed property portfolio valuation 3,603.2 3,552.7
Adjustments to completed property portfolio in respect of regulated tenancies (527.0) (545.2)
Adjusted gross up completed property portfolio valuation b 3,076.2 3,007.5
Annualised net rents 130.5 128.8
Adjustments to annualised cash passing rental income in respect of newly 11.1 6.6
completed developments and refurbishment activity
Adjustments to property outgoings in respect of newly completed developments (2.8) (1.9)
and refurbishment activity
Adjustments to annualised cash passing rental income in respect of regulated (12.7) (13.3)
tenancies
Adjustments to property outgoings in respect of regulated tenancies 3.5 3.4
Adjusted annualised net rents a 129.6 123.6
Add: rent incentives 0.7 0.7
EPRA 'topped up' NIY c 130.3 124.3
Adjusted EPRA NIY a/b 4.2% 4.1%
Adjusted EPRA 'topped up' NIY c/b 4.2% 4.1%
EPRA Vacancy Rate
31 March 30 Sept
2026 2025
£m
£m
Estimated rental value of vacant space A 5.9 2.5
Estimated rental value of the whole portfolio B 147.5 130.0
EPRA Vacancy Rate A/B 4.0% 1.9%
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 2026 2025
£m
£m
Administrative expenses 16.9 16.9
Property operating expenses 23.2 22.8
Share of joint ventures expenses 0.5 0.4
Management fees (1.2) (1.2)
Other operating income/recharges intended to cover overhead expenses (1.5) (3.5)
Exclude:
Investment property depreciation - -
Ground rent costs (0.1) (0.1)
Costs (including direct vacancy costs) A 37.8 35.3
Direct vacancy costs (1.4) (1.2)
Costs (excluding direct vacancy costs) B 36.4 34.1
Gross rental income 89.4 84.1
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 5.2 19.9
Gross Rental Income and Trading Profits C 94.7 104.1
Adjusted EPRA Cost Ratio (including direct vacancy costs) A/C 39.9% 33.9%
Adjusted EPRA Cost Ratio (excluding direct vacancy costs) B/C 38.4% 32.8%
EPRA LTV
31 March 2026
£m Group Share of Joint Ventures Share of Associates Combined
Borrowings from Financial Institutions 959.0 - - 959.0
Bond loans 700.0 - - 700.0
Net payables (9.2) 9.4 14.6 14.8
Exclude:
Cash and cash equivalents (134.1) (3.7) (0.6) (138.4)
Net debt A 1,515.7 5.7 14.0 1,535.4
Investment properties at fair value 2,921.1 - 14.5 2,935.6
Investment properties under development 189.3 55.9 - 245.2
Properties held for sale 533.8 - - 533.8
Financial assets 88.5 - - 88.5
Total property value B 3,732.7 55.9 14.5 3,803.1
EPRA LTV % A/B 40.6% 10.3% 96.8% 40.4%
EPRA Performance Measures - Unaudited (continued)
30 Sept 2025
£m Group Share of Joint Ventures Share of Associates Combined
Borrowings from Financial Institutions 903.0 - - 903.0
Bond loans 700.0 - - 700.0
Net payables 41.8 9.8 14.6 66.2
Exclude:
Cash and cash equivalents (126.6) (3.3) (0.3) (130.2)
Net debt A 1,518.2 6.5 14.3 1,539.0
Investment properties at fair value 2,858.1 - 14.9 2,873.0
Investment properties under development 266.2 52.7 - 318.9
Properties held for sale 541.0 - - 541.0
Financial assets 94.4 - - 94.4
Total property value B 3,759.7 52.7 14.9 3,827.3
EPRA LTV % A/B 40.4% 12.3% 96.0% 40.2%
EPRA Capital Expenditure
31 March 2026
£m Trading Properties Investment Properties Group (excl Joint Ventures) Share of Joint Ventures Combined
Acquisitions - 6.2 6.2 - 6.2
Development 6.4 53.9 60.3 1.5 61.8
Completed assets
- Incremental letting space - - - - -
- No incremental letting space 0.8 4.7 5.5 - 5.5
- Tenant incentives - - - - -
- Other material non-allocated types of expenditure - - - - -
Capitalised interest - 3.3 3.3 0.4 3.7
Total capital expenditure 7.2 68.1 75.3 1.9 77.2
30 Sept 2025
£m Trading Properties Investment Properties Group (excl Joint Ventures) Share of Joint Ventures Combined
Acquisitions 0.1 20.0 20.1 - 20.1
Development 9.5 100.8 110.3 3.9 114.2
Completed assets
- Incremental letting space - - - - -
- No incremental letting space 2.3 17.2 19.5 0.2 19.7
- Tenant incentives - - - - -
- Other material non-allocated types of expenditure - - - - -
Capitalised interest - 10.4 10.4 0.5 10.9
Total capital expenditure 11.9 148.4 160.3 4.6 164.9
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