Grainger resilient despite tough backdrop

FTSE 250 residential property owner and manager Grainger said it has put in a strong operational performance in the third quarter but did caution the fragility of the economic backdrop.Completed group sales in the four months to July 31st totalled £89.9m, taking total sales in the first ten months of the financial year to £202.1m, up 13% over last year, as a result of a "resilient portfolio, evidenced by growth in our three income streams - sales, rents and fees".UK margins on sales of vacant properties in the ten-month period improved from 38.7% to 39.8%.Meanwhile, the sales pipeline remains strong at £264.5m, up from £235.7m at the end of July 2011.Grainger said it was also making significant headway in its debt-reduction programme, with net debt falling by £113m in the ten months since September 30th, from £1,454m to £1,341. "This again reinforces the continuing ability of the Group to generate cash from its operations."The group said that the macro-economic environment in the UK and Europe is more fragile than when it last updated the market in May: "A third successive quarter of negative UK GDP growth and the continuing issues in the Eurozone are of particular note."General UK house prices have shown a slight decrease in recent months, but a number of factors positively support prices in London and the South East where we have positioned almost two thirds of our UK portfolio. In Germany the housing market has been most robust in the stronger economic conurbations and our portfolio has benefited from its Western and Southern geographical bias as shown by sales in the period at or above valuation."BC Grainger plc