Grainger ups dividend as it sees great growth in residential rental market

The FTSE 250 company also said it was seeing for the first time an increase in the number of households renting across the broadest age range of 25-64, which, coupled with an undersupply of housing, meant the private rented sector offered good growth prospects.

Net rental income of £20.0m was generated in the six months ended 31 March 2017, up 11% on the same period last year, with profit before tax up 13% to £41.2m.

Although cash generated from operating and investment activities decreased in the period, the dividend was hiked 10% to 1.6p per share.

Chief executive Helen Gordon said her strategy was delivering "strong results" and she expect this momentum to continue having secured £439m of PRS investment and with a further £425m in the planning or legal process to achieve the rest of the £850m target.

On average Grainger is scheduled to complete a new PRS building every two months over the next two years.

Having cut overheads 17% to £13.4m from the same period last year she said the business was a "focused, simpler and more efficient" and on track to deliver her £27.5m overhead target for the full year.

"We have made changes to the way we operate in order to enhance returns, through reducing costs, simplifying processes and improving the scalability of our operating platform."

"The private rented sector growth opportunity is compelling with strong investment fundamentals. Our strategy to grow rents and simplify and focus the business puts Grainger in a strong position to deliver further sustainable income led growth."