19th May 2016 06:55
LONDON (Alliance News) - Grainger PLC Thursday said it has adopted a new dividend policy that will see payouts increase significantly, forecasting more than a 45% rise to the dividend this year, as the company reported a rise in profit during the first half.
The company also said it expects recurring profit to be ahead of expectations for the full year.
"Our new dividend policy, announced today, will materially increase distribution returns to shareholders and is aligned with the strategy of growing rents," said Grainger.
The London-listed residential landlord plans to pay out 50% of its net rental income as a dividend moving forward, with around a third of the full year dividend to be paid as an interim, meaning the payout will be weighted to the second half of the financial year.
Grainger has already implemented the policy as its interim dividend has more than doubled to 1.45 pence from 0.64 pence. The company said the full year dividend should be around 4.0 pence, which would be a 45% rise from the total 2.75 pence dividend paid in the last financial year.
The new policy has been introduced following a positive first half which saw rental income rise by 13% and pretax profit soar 73%.
Net rental income rose to GBP18.0 million from GBP16.0 million to give Grainger recurring profit of GBP25.4 million compared to GBP22.5 million the year before.
A GBP14.6 million gain from valuation movements was higher than the GBP8.7 million gain last year and the loss on derivative movements declined to GBP4.1 million from GBP8.7 million.
That, combined with higher revenue, allowed Grainger to post a 73% rise in pretax profit to GBP36.6 million from GBP21.1 million.
"In the past six months we have secured GBP268.0 million of investment into the private rented sector, nearly a third of our GBP850.0 million target, with a further GBP398.0 million in advanced stages. We have identified cost savings that will reduce our overheads by almost a quarter and will be realised fully in our next financial year," said Chief Executive Helen Gordon.
The second half has "started well" and has been boosted by the sale of non-core properties and assets, the company said. Grainger said although sales on vacancy are expected to be first half weighted, it is expecting recurring profit for the full year to be ahead of management expectations.
By Joshua Warner; [email protected]; @JoshAlliance
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