5th Oct 2007 07:00
Grainger PLC05 October 2007 5 October 2007 Grainger plc Trading Update Grainger plc ("Grainger" or the "Company"), the UK's largest quoted residentialproperty owner, today provides a trading update in advance of its preliminaryresults announcement for the year to 30 September 2007, which will be issued on29 November 2007. Sales of residential property from our core portfolio have continued to exceedSeptember 2006 valuations and total sales volumes are expected to beapproximately £128m for the 12 months to 30 September 2007 (2006: £126m).Increased volumes and improved margins on sales will result in trading profitsexceeding those achieved in 2006. During the second half of the year, Grainger completed or exchanged contractsfor the purchase of approximately £110m of tenanted residential properties inthe core portfolio, bringing the total value of acquisitions made in the year toapproximately £151m. This includes the acquisition of the £62.5m, 300-unitportfolio in The Tilt Estate Company, which we announced in September. Recent changes in the availability of credit and cumulative increases ininterest rates will inevitably affect the mortgage market and there is generalacceptance that the overall rate of growth in the UK housing market will slow inthe coming months. In the year to 30 September 2007, however, overall houseprice growth has been relatively strong (the Halifax All Houses, All BuyersIndex for the period shows annual growth of 10.7%) and we anticipate that theoverall increase in the vacant possession value of our UK residential portfolio(excluding major acquisitions made) will be in the range of 9.5% to 10.5% forthe year. Purchasing activity in our retirement solutions division has continued in linewith expectations at our interim results. Good progress has been made inintegrating the major acquisitions of the CHARM portfolio and The CapitalAppreciation Trust ("CAT") which we completed in the first half of the year.Vacancy rates and subsequent sales values in CHARM have exceeded ourexpectations and we have made significant progress in letting the vacantproperties at CAT, reducing vacancies from 25% to 10%. Including theseacquisitions, purchases in this division for the whole year amount toapproximately £252m and we have made sales of approximately £18m (2006: £29m and£13m respectively). In August we announced the final closing of G:res1, our market rented fund. Intotal we have raised £159m of third party equity from a group of blue-chipinstitutional investors and Grainger's stake in the fund now stands at 21.63%(£44.3m). The assets in the fund were valued at £435m at the end of June 2007and the net asset value per share had shown positive growth of 14% to the samedate since launch in November 2006. The development division has also performed in line with expectations. Asreported in July, it has obtained a resolution to grant outline planning consentfor a major mixed-use 132 hectare development on part of our land holdings nearWaterlooville in Hampshire. We have continued to be active in acquiring properties in the German residentialmarket and have completed the acquisitions of a further 876 units in the secondhalf of the year, bringing our total portfolio to 4,253 units. In April we improved the Company's liquidity position by issuing £112m ofconvertible bonds at a coupon of 3.625% and a conversion price of 864 pence pershare. The Company will comment in more detail on its progress at the time of itspreliminary results announcement. For further information: Grainger plc Financial DynamicsRupert Dickinson Stephanie Highett Tel: +44 (0) 20 7795 4700 Tel: +44 (0) 20 7831 3113Andrew Cunningham Dido Laurimore Tel: +44 (0) 191 261 1819 Tel: +44 (0) 20 7831 3113 Notes to Editors: Grainger plc is the UK's largest listed residential property owner, trader anddevelopment company. Listed on the FTSE-250, the Company aims to delivershareholder value through combining its core activities in the management andtrading of portfolios of regulated and assured tenancies and in the fields ofresidential development, fund management, equity release and asset management.In addition, Grainger is expanding its operations into continental Europe andcurrently owns over 4,200 residential units in Germany. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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