PRS pays off for Grainger
Grainger’s PRS-focused strategy will protect it from the effects of the EU referendum, chief executive Helen Gordon said as the company posted a 69% rise in adjusted earnings to £53.1m in its full-year results.
In the first full-year report since Gordon was appointed to spearhead a plan to invest £850m into the private rented sector by 2020, the company saw its net rental income rise by 15% to £37.4m. Pretax profit increased by 64% to £84.2m.
Its emphasis on investment rather than sales makes it more dependent on a predictable income stream, including recurring rent, rather than fluctuating house prices.
Grainger’s PRS-focused strategy will protect it from the effects of the EU referendum, chief executive Helen Gordon said as the company posted a 69% rise in adjusted earnings to £53.1m in its full-year results.
In the first full-year report since Gordon was appointed to spearhead a plan to invest £850m into the private rented sector by 2020, the company saw its net rental income rise by 15% to £37.4m. Pretax profit increased by 64% to £84.2m.
Its emphasis on investment rather than sales makes it more dependent on a predictable income stream, including recurring rent, rather than fluctuating house prices.
Gordon said: “The market has got this fundamental undersupply of good-quality homes, and at the same time we have a rising population. You put the two together and realise that offering good professional homes to rent is the way forward.”
She said the biggest disappointment since joining the firm was the fall in the share price from 247p to about 219p, which she said did not reflect the impact the EU referendum would have on the business.
“Our investment is in UK homes for rent, and the UK exit from the EU will not have a dramatic impact on that,” Gordon said. “Obviously, we will not be immune from the wider economy, but I think it has to be one of the most resilient property sectors to be in right now.”
Grainger has invested £389m into PRS, with a further £347m in the pipeline. This included an agreement to forward fund 194 homes at Finzels Reach in Bristol for £47.5m.
Grainger’s disposal of its non-core German and retirement solutions businesses during the year enabled the firm to reduce its net debt by £451m and its loan-to-value ratio to 35.9% from 45.5% last year.
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