Company Announcements

Trading Update

Source: RNS
RNS Number : 8168I
Grainger PLC
06 April 2020

06 April 2020


Grainger plc


("Grainger", the "Group", or the "Company")




Strong financial position and resilient residential rental market in the first half




Grainger plc, the UK's largest listed provider of private rental housing, today provides a post-close trading update for the six-month period to 31 March 2020. The Company's half year financial results are scheduled to be reported on 14 May 2020.


Helen Gordon, Chief Executive, said:


"Grainger homes have never been so intensively used with the necessity of home working or self-isolation for many.  Our customers' homes have also become offices, classrooms, social spaces and places of sanctuary. Demand for good quality homes supported by good service and leading technology, has become even more important when the priority has rightly been on protecting the health and safety of everyone. In response to Covid-19 Grainger employees are working remotely, supporting our customers and we are in regular contact with our older customers.


"Grainger is well placed to operate through an extended period of uncertainty. Our successful equity raise in February 2020 puts us in a strong position and our balance sheet is robust, with our LTV at a six-year low. We have significant cash reserves and available committed facilities that mean we can continue to make the right decisions for the business in these uncertain times from a position of financial strength."



Key Highlights

  • Grainger is well capitalised with good liquidity and a strong balance sheet.
  • The rental housing market has remained resilient.
  • High occupancy levels of over 97%.
  • High rent collection rate of 95% in March, which is in line with historic trends.
  • Sales remained robust to the end of March.
  • Our investment in technology is enabling us to continue to serve our customers remotely, including on-going leasing activity in our new buildings. Our strong in-house operational team is experienced in supporting customers during challenging times.


Resilient rental portfolio

  • High occupancy levels of over 97%.
    • Leasing activity expected to slow due to Coronavirus disruption, however churn in existing customers is also likely to slow as people defer moves.
  • Strong overall rental growth of +3.4% for the period demonstrating continued demand and the resilience of our net rental income stream:
    • +3.0% like-for-like rental growth on our PRS homes (renewals +2.7% and +3.5% new lets); and  
    • Annualised rental growth of +4.5% on regulated tenancy rental reviews.
  • We expect to see lower rental growth in the second half, falling below 3%, due to lower turnover, with renewals a greater proportion than new lets as people defer moves.
  • High rent collection rates of 95% in March, in line with historic trends.
  • We have made significant progress in our arrears position over recent months with our March position at 1.4% of gross rent, compared to a historic range of 2.0 – 2.5%.   
  • We are committed to continuing to serve our customers and assist them where we can during these challenging times.

Vacant sales in line but transactions expected to slow in the short term

  • Vacant sales profit from our regulated tenancy portfolio remains robust and in line with H1 last year.
    • Strong sales performance with pricing achieved 1.0% ahead of previous valuations (vacant possession value) and velocity (keys to cash) at 113 days (HY19: 112 days).
    • Vacancy rate of 6.6% in the first half.
  • Profit from asset recycling is below last year by £7.8m at £5.2m, as we reduce portfolio sales and GRIP recycling.
  • Going into the second half of our financial year, we have a sales pipeline of £26.2m in solicitors’ hands (HY19: £19.6m) although we do expect to see some disruption due to the current situation. In addition, we have a further £7.3m of ex-regulated tenancy properties which are vacant with the potential for sale or for re-letting at open market rents in the short term during this period of market disruption.
  • The majority of our sales are of vacant properties and we expect the sales to continue in line with Government guidelines, and we have continued to see some transactions progress in recent days. Nonetheless, current events are expected to reduce housing transaction volumes overall in the short term and will potentially delay some profit recognition.
  • We have also put some of our asset recycling on hold until we have more clarity on the market backdrop.


Well capitalised with a strong liquidity position

Grainger is in a strong liquidity position, with available cash and undrawn committed facilities to cover future costs and liabilities comfortably for an extended period.

  • £527m of total headroom which is currently undrawn after repayment of all near-term debt maturities, with the next facility maturity in September 2021
  • £198m of cash available and £329m of available committed undrawn facilities.
  • Committed capital expenditure for the next 12 months is c.£150m reflecting the most up to date status of sites within our pipeline.

Strong balance sheet with low LTV

  • Following our recent equity raise, our pro-forma loan to value is 33% based on FY19 valuations, at a six-year low.
  • Significant headroom in our debt covenants.
  • Average debt maturity of 5.6 years.

Development pipeline flexibility

  • Capital expenditure within our forward-funded development pipeline is aligned to construction progress on site. We anticipate some delays in our pipeline due to social-distancing guidelines, with three of nine sites remaining currently open and active, but with the position subject to change.
  • The remaining direct development schemes within our pipeline are fully within our control and therefore capital expenditure can be managed if required.
  • Dependent on the length of the delays within the pipeline, this would have a subsequent impact by delaying both our capital expenditure requirements and the future progression of our total net rental income which aligns to site completions and lease up activity.
  • Our 12-month forward committed capital expenditure has therefore reduced from c.£220m to c.£150m and could reduce further depending on site progress.




  • The Company’s half year financial results are scheduled for 14 May 2020 and the Company does not feel a change of reporting date is necessary or required at this time.




For further information:


Grainger plc

Helen Gordon / Vanessa Simms / Kurt Mueller / David Prescott

London Office Tel: +44 (0) 20 7940 9500


Camarco (Financial PR adviser)

Ginny Pulbrook / Geoffrey Pelham-Lane

Tel: +44 (0) 20 3757 4992/4985

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