19th Nov 2015 08:28
LONDON (Alliance News) - Grainger PLC on Thursday said it will receive EUR48.0 million for the 25% stake held in its German joint venture, as well as "performance related" premium return on equity, enabling the company to expect a profit from the sale of the business.
The sale should generate a pretax profit compared to the September 30 investment value of about EUR16.0 million, Grainger said. The initial rate of return in the joint venture over and above its establishment in late 2012 is 42%, the company added.
The London-listed residential property company and its joint venture partner have decided to bring forward their exit from the German business. The deal is expected to complete by December 31, subject to approval from Germany's Federal Cartel Office.
The sale of the joint venture, which consists of 2,500 residential properties primarily in Germany's western regions, to a "large German investor" generated a total of EUR136.0 million. Grainger is also looking to sell its wholly owned German assets.
"As well as representing a strong return on capital invested, this successful transaction is a further step forward in the group's stated objective of simplifying its business model, enabling Grainger to align and focus its resources on growing its UK private rented sector business," the company said.
The update came as Grainger said its gross net asset value per share grew by 9.7%, or 28 pence, to 319p on September 30, from 291p one year earlier. The company lifted its dividend for the year as a whole to 2.75p from 2.50p, as pretax profit fell to GBP50.0 million in the year to September 30 from GBP81.1 million, due in part to the GBP18.2 million loss on the re-acquisition of Equity Release (Increments) Ltd.
Shares in Grainger were up 2.2% at 248.82 pence on Thursday shortly after the market open.
By Samuel Agini; [email protected]; @samuelagini
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