Grainger ups dividend as rental income rises

Grainger increased its interim dividend as the residential landlord reported a 27% increase in rental income for the first half.

Net rental income for the six months to the end of March rose to £37m from £29.1m a year earlier, the FTSE 250 company said. Pretax profit fell 9% to £49.6m.

Grainger increased its half-year dividend by 7% to 1.83p a share based on the resilience of its business. Grainger said it was sticking to its dividend policy of paying out half of net rental income each year.

The company said like-for-like rent rose 3.4% in the first half with 3.3% growth in April. Rent collection in March was 95% and in April it was 94%. Occupancy at its private sector rental properties was stable at 97.2% compared with 97.5% a year earlier.

After raising £183m in a share placing during the first half the company has £527m of cash and undrawn credit facilities with capital spending forecast at £165m for the next 12 months..

"As the first half came to a close, the business was in its strongest financial position in recent years. With a robust balance sheet, low leverage and significant liquidity, Grainger is well positioned to weather the current economic uncertainty," Chief Executive Helen Gordon said. "Due to the strength of the business and the resilience of our sector, our dividend policy will be maintained, with a +6% increase in our interim dividend."

Grainger said the lettings market remained active but at lower levels. Enquiries have picked up in recent weeks, returning to pre-coronavirus levels, it said.