Grainger confident in outlook after strong first half

14th May 2026 08:35

(Sharecast News) - Grainger reported higher rental income and earnings for the first half of its financial year on Thursday, as the build-to-rent landlord said it remained on track to deliver a 12% increase in EPRA earnings for 2026.

The FTSE 250 residential landlord said net rental income rose 7.8% to £66.1m in the six months ended 31 March, from £61.3m a year earlier, while EPRA earnings increased 4.0% to £31.4m from £30.2m.

EPRA earnings per share rose 4% to 4.2p, and the interim dividend was increased 3% to 2.94p per share, marking what the company said was its 21st consecutive period of dividend growth.

Like-for-like rental growth was 3.1%, compared with 3.6% for the 2025 financial year, with build-to-rent rental growth of 2.9%.

New lets rose 2.0%, renewals increased 3.3%, and regulated tenancy rental growth was 5.9%.

Occupancy remained high at 95.9%, compared with 98.0% at the end of the 2025 financial year, while customer affordability remained healthy, with the rent-to-income ratio marginally improving to 27%.

Grainger said it remained on track to deliver EPRA earnings of £60m, or 8.1p per share, for the 2026 financial year, representing a 12% increase from 2025, and £72m, or 9.7p per share, by 2029, representing growth of 35%.

The company said it expected like-for-like rental growth of between 3.0% and 3.5% for the full year, supported by wage inflation.

On an IFRS basis, Grainger swung to a loss before tax of £14.6m, compared with a profit of £74.0m a year earlier, after outward yield movement led to a modest valuation decline.

EPRA net tangible assets per share fell 3% to 290p from 298p at the end of September, reflecting modest yield expansion linked to macroeconomic sentiment.

Net debt rose 4% to £1.52bn from £1.46bn, while group loan-to-value increased to 40.2% from 38.4%. The average cost of debt fell to 3.2% from 3.3%.

Grainger said it had extended £540m of core banking facilities to 2033 at lower margins, reducing finance costs by around £1m per year and leaving weighted average facility maturity, including extension options, at 4.6 years.

The company said its capital allocation strategy was focused on completing its remaining committed pipeline and deleveraging by £300m to £350m by 2029, with loan-to-value forecast to reduce to around 30% and net debt-to-EBITDA to around 8x by that year.

It said future capital allocation considerations would include share buybacks, acquisitions of stabilised assets, or committing to new developments, depending on which option was most accretive to shareholder returns at the time.

Chief executive Helen Gordon said Grainger had delivered "a strong performance, despite operating in a time of global and market uncertainty".

"We continue to build a resilient, high quality income stream. Occupancy remains high, rental income continues to grow along with our portfolio, and like-for-like rental growth continues in line with expectations, underpinned by wage inflation," she said.

Gordon said the new Renters' Rights Act, which took effect earlier this month, was contributing to structural changes in the sector, with smaller private landlords exiting and larger professional landlords gaining market share.

"Housing is a needs-based asset class. Everyone will always need a place to live," she said.

"As the UK's only listed, scaled, pure-play build-to-rent platform, we continue to benefit from a structurally undersupplied rental market and long-duration, inflation-linked income.

"The outlook for Grainger is excellent."

At 0912 BST, shares in Grainger were down 2.53% at 151.28p.

Reporting by Josh White for Sharecast.com.

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