Grainger profits climb after net rental growth

Grainger on Wednesday reported that annual profits grew by almost a third after a jump in rental income driven by a new acquisition and property completions.

The residential property business booked a profit before tax of £131.3m for the 12 months ended 30 September, marking a 30% increase versus the year before, as net rental income jumped by 45% to £63.5m.

On the back of the announcement, the FTSE 250-listed company hiked its final dividend by 9% to 5.19p per share.

Growth in rental income was driven by Grainger's acquisition of the 1,700 home GRIP portfolio, which contributed £17.7m, and the delivery of 1,152 new private rented sector (PRS) homes.

Over 1,045 PRS homes were expected to be delivered during the following year and the company had a total pipeline to deliver approximately 9,104 of the homes after partnering with Transport for London.

Grainger said the pipeline provided a clear path to a portfolio that was over 75% PRS, adding that its recurring rental income had the potential to more than double as it moved forward with development.

Chief financial officer Vanessa Simms said: "The continued structural growth story with continuing undersupply of rental homes compared to demand, provides a strong positive outlook for sustainable rental growth for years to come.

"Our portfolio of attractive rental homes in high demand locations, our strong operational capability and fully integrated business model places us in an excellent position to continue building on our leadership in the UK residential rental market."

Grainger shares were up by 2.14% at 281.90p at 1220 GMT.