Shares in Grainger (GRI) jumped over 4 per cent after the UK's largest private landlord delivered an upbeat trading statement for the four months to 31 January. Sales jumped from £64.6m for the same period a year earlier to £149.3m, mainly as a result selling a home reversion portfolio for £88m. Crucially, Grainger will retain management of the portfolio, which will provide further fee income.
Underlying rental rates remained strong on the regulated-tenancy portfolio, rising around 3.4 per cent on renewals and 6.7 per cent on new lets, although gross rental income was down from £27.3m to £19.3m as expected, following the disposal of £348m of assets last year into joint-venture or associate vehicles. Fee income slipped from £4.6m to £3.8m, but this was largely the result of project completions during the period. In fact, the latest home reversion portfolio sale is expected to generate around £600,000 fee income on an annualised basis. On the development side, planning permission has been secured on three projects in Kensington, Hammersmith and Hampshire.
Grainger has also made further progress in decreasing net debt, which fell from £959m last September to £917m. However, the loan-to-value (LTV) rate rose from 48 per cent to 49 per cent after the £36m cost of breaking interest-rate swaps ahead of a £200m corporate bond issue last November. That leaves the group with a £402m war chest, comprising cash and undrawn facilities, and further acquisitions in the regulated and private rented sector are being explored.
