Grainger plc Regulatory News (GRI)

6 Oct 2009 07:00



6 October 2009

Grainger plc

Trading Update

Grainger plc ("Grainger" or the "Company"), the UK's largest quoted residential property owner, today provides a trading update in advance of its preliminary results announcement for the year to 30 September 2009. 

For the twelve month period to 30 September 2009, we expect total group sales to amount to approximately £220m, an increase of 21.6% over the equivalent figure of £181m in 2008. Sales from our core and retirement solutions portfolio account for approximately £169m and this is very much in line with last year's figure of £168m. As anticipated, margins have decreased because of falls in house prices and a greater proportion of investment sales (sales with a tenant in place rather than with vacant possession) and will therefore result in trading profits falling below 2008 levels.

Sales from our development division will amount to approximately £47m (2008: £10m), the increase coming from our focus on selling non-core assets and from our very successful development at Hornsey Road, Islington, where we have completed on 88 units out of the first launch of 92. The remaining four units are either exchanged or reserved. 

Our continued focus on cash conservation has resulted in a significant decrease in property acquisitions, amounting to circa £12m for 2009 compared to £146m in 2008. 

Whilst we remain cautious in our near term outlook for the housing market, we are pleased to note that some stability has returned over the last few months. This is reflected in the values being achieved for current sales (properties with contracts exchanged or under solicitors' instructions) which are only 0.7% below their equivalent September 2008 values.

The preliminary valuation of our UK residential portfolio indicates a fall in vacant possession values from September 2008 of approximately 4% and a narrowing of the discount applied to vacant possession values to calculate the market value of our properties. Together these will result in a decrease in property values for this portfolio of approximately 2.5%.

As announced to shareholders on 1 October, during the period Grainger successfully signed two new forward start credit facilities totalling £615m which will provide extended liquidity for the Group at the time that certain of its existing facilities expire. As a result, the Company now has no core debt facilities maturing in its financial year to September 2010, with only £109 million maturing in its financial year to September 2011 and only £57m in its financial year to September 2012.

The Company will comment in more detail on its progress at the time of its preliminary results announcement. 

-ENDS-

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