Private rented sector specialist Grainger has reported strong half-year results in which earnings grew 11%.
The group, which has a portfolio of 9,109 rental homes in the UK, said rents were up 1.7% in the six months to March 2021, while enquiry levels were up 86% since January.
Net rental income was £34.7m, down on the same period last year of £37.0m, which reflects asset recycling, lower occupancy and delays in pipeline completions.
Sales profit was up 30% to £29.6m (HY20: £22.8m).
The group made 1,086 new lettings and 1,244 renewals in the period, representing £12m and £15m of gross rent respectively. Rent collection levels was at 98%.
It will deliver 1,021 new homes this year (508 homes delivered in H1 and 513 in H2), totalling £12m of targeted net rental income once stabilised.
Meanwhile, the group’s pipeline is now worth £2.1bn, with new acquisitions and planning contents secured, totalling 1,108 new homes.
This morning the group announced the forward funding acquisition of a 259-home build to rent development in Derby for £37.4m, and during the period also acquired Millwrights Place, in Bristol for £63m.
Planning was secured at Nine Elms, London (Transport for London (TfL) JV) for 479 homes, and at Montford Place, Oval, London (TfL JV) for 139 homes.
Helen Gordon, chief executive, said: “We have delivered a strong performance over the past six months despite the impact of COVID-19. It has been a period of intense operational activity, supporting our customers in their homes. Adjusted earnings grew 11% over the period and our strong sales performance more than offset a reduction in occupancy in our PRS portfolio (89%) caused by COVID-19 lockdown restrictions. Our rental income continued to prove resilient with very high levels of rent collection at 98% and continued rental growth of 1.7%. We are therefore maintaining our interim dividend at 1.83p.
“We continue to progress our well-established growth strategy, with new acquisitions for 490 new rental homes, major planning approvals secured for a further 618 new rental homes, and over 1,000 new rental homes to be delivered this year.
“During the six-month period we have driven customer retention, lettings and rental growth ahead of the market, leveraging our in-house operating platform. There is positive market evidence, including the +86% rise in lettings enquiries we have generated since the beginning of the year, which suggests a strong lettings market to come as we enter the peak summer period and all remaining lockdown restrictions are lifted. This provides us with increasing confidence for an improved performance for the second half of the year subject to the UK economy reopening as currently expected.
“The many actions we have taken from the outset of our strategy in 2016, focusing the business to what it is today and setting us up for significant future growth and earnings potential, but also the actions we took in the past six months, gives us a high level of assurance that we are ready to capitalise on the UK’s reopening over the coming months, and pursue our long term growth plans.”
GRI : Grainger reports strong earnings growth