14th May 2015 07:52
LONDON (Alliance News) - Grainger PLC Thursday reported a lower pretax profit for the first half of its financial year due to several one-off costs, although profit excluding these was higher and its net asset value rose.
The residential property owner and manager reported a pretax profit of GBP9.1 million for the six months to end-March, down from GBP49.8 million a year earlier, as it was hit by a GBP18.2 million impairment related to the failed sale of a home reversions portfolio subsidiary, a GBP12.7 million reduction in valuation gains, and a GBP13.9 million negative movement on derivatives.
Excluding these charges, its recurring pretax profit rose to GBP26.2 million, from GBP23.1 million, thanks to strong sales of vacant space and a contribution from the Macaulay Walk development which more than offset a fall related to investment sales.
Grainger's gross net asset value stood at 293 pence at the end of March, up 2p since the end of September and up 21p on the year, despite the hit from the one-off items and legacy swap break costs.
Triple net asset value, which is NAV adjusted for hidden reserves and hidden losses in immovable assets and financial liabilities, was 240p at the end of March, down 2p from the end of September due to the one-off items and the negative movement on derivatives. The figure was up 12p on the year.
Grainger raised its interim dividend to 0.64p, from 0.61p.
The company said profit from sales rose to GBP45.1 million in the half, from GBP42.8 million a year earlier, net rents dropped to GBP19.0 million, from GBP19.5 million, while gross fee income was GBP4.2 million, down from GBP5.1 million.
It said it was encouraged by its sales pipeline, which stood at GBP151 million on May 8, up from GBP131 million at the end of March.
"In the first six months of our financial year we have continued to see strong margins on sales of our assets and encouraging levels of activity in both the transactional and rental markets. Our portfolios have again outperformed the general market for the fifth year, demonstrating the quality of our assets and our management capabilities," outgoing Chief Executive Andrew Cunningham said.
"The fundamentals driving activity in the housing market remain supportive, particularly the positive improvements in the labour market, continued low mortgage interest rates and recent changes to stamp duty," the company said in its outlook statement. "Our focus is firmly set on growing our market rented residential business (predominantly through build to rent opportunities) and acquiring attractive regulated tenancy portfolios."
Grainger shares were down 1.1% at 211.10 pence Thursday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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