Grainger sees cash boost from property sales

11th Aug 2011 07:04

Grainger the FTSE 250 property company has seen a drop in sales compared to the same period of 2010 and says the economy "continues to be subdued and we anticipate this will continue into the medium term."Total sales up to July were £148.7m compared to £154.8m for 2010 although Grainger points out £40.5m worth of sales are with solicitors so the "pipeline" value is £189.2m.Up to the end of July the firm had sold 531 residential units at an estimated trading margin of 39.7%, the comparable figures for last year were 597 units at a margin of 42.7%. Grainger has kept acquisition activity down considerably, with only £19.2m committed to buy property compared to £67.6m for 2010.G:res1, the investment fund that Grainger runs targeting rental returns in London and the South East saw its net asset value per share rise by 6.8% to £0.79 on the back of strong demand for high quality flats and shareholders have voted to extend the fund for two years.The development arm of Grainger has performed well folowing the award of partnership status for the Aldershot Urban Extension. The division generated cash receipts of £22.1m in the ten months to 31 July 2011 (2010: £12.5m). The German arm of Grainger which makes money from rentals generated a steady yield of around 7%.The firm's debts stand at £1.502bn, down slightly from the £1.570bn figure for March. The loan to value ratio has also decreased slightly since March from 54% to 53%.Cash flow appears to be strong with net in-flows at £132m up from £97m at the equivalent period last year.Commenting, Andrew Cunningham, Chief Executive of Grainger, said:"The resilience and liquidity of our portfolio continue to be evidenced by strong sales in excess of valuation, despite ongoing challenges in the residential market."BS