LONDON (Alliance News) - Residential property landlord Grainger PLC on Thursday raised its payout on the back of interim profit and rental income growth.
Grainger also said that it remains confident to deliver a robust sales performance for the full year due to a strong sales pipeline as at April 30 of GBP128 million, providing good visibility for the second half.
For the six months to March-end, the company recorded pretax profit of GBP54.3 million, up 7.3% from GBP50.6 million a year ago, on revenue of GBP107.0 million and GBP135.3 million, respectively. The 21% revenue drop was attributed to fewer property sales.
Net rental income for the period increased 33% to GBP29.1 million from GBP21.8 million, with like-for like rental growth of 3.7% versus 4.1% a year ago. The growth in rental income was attributed to part-contribution from Grainger's GRIP REIT PLC acquisition.
In December 2018, Grainger completed the acquisition of the remaining 75.1% interest in GRIP from joint venture partner APG for GBP396.6 million.
Grainger declared an interim dividend of 1.73 pence per share, up 10% from 1.57p paid a year ago.
The company's portfolio consisted 8,400 rental homes of which 4,900 were in private rented sector portfolio and 3,500 regulated tenancies. The company's pipeline totalled GBP1.83 billion with GBP760 million of secured private rented sector projects, a further GBP465 million of schemes within the planning or legal process, and an estimated GBP600 million through partnership with Transport for London.
Grainger expects its pipeline to deliver over 8,200 new rental homes.
"We are in a strong position to deliver a good performance in the second half of the year and a positive overall result. The acquisition of GRIP significantly accelerated our growth strategy to enhance shareholder returns and we have repositioned the income profile of the business. We expect our pipeline to more than double our net rental income over coming years and will directly lead to sustainable dividend growth," said Chief Executive Helen Gordon.
Shares in Grainger were trading 0.8% higher at 260.20p each on Thursday morning.
Grainger plc (GRI)