Grainger swings to annual profit as NAV rises

7th Nov 2013 09:55

- Grainger swings from loss to profit - Gross NAV rises nine per cent- Group raises dividendResidential property business Grainger swung to a full year profit as sales and net asset value (NAV) increased, beating forecasts convincingly.The group achieved a pre-tax profit of £64.3m in the year to the end of September, compared to a loss of £1.7m a year earlier. Triple NAV rose 24% to 195p per share and gross NAV climbed 9% to 242p, well ahead of consensus forecasts that pointed to 230p.Market values of the firm's residential UK portfolios grew by 8.3%, up from 3.9% last year, compared to a 5.6% average increase for the combined Nationwide and Halifax house price indices.Margins on sales of vacant properties increased to 44.9% from 39.6% and sales of assets rose to £352.9m from £258.4m.Net rents, however, fell to £48.5m from £62.8m, as assets were injected into co-investment structures during the year.Net debt reduced by £235m to £959m with consolidated loan-to-value (LTV) falling to 48% from 55%."The first year of our second century has seen strong increases in asset values and reduced debt," said Chairman Robin Broadhurst."Grainger continues to be uniquely placed to take a leading role in a dynamic residential sector which is likely to become increasingly institutional."The group recommended a final dividend of 1.46p per ordinary share, up from 1.37p last year, bringing the total dividend for the year to 2.04p, compared to 1.92p in 2012.Broker Jefferies said the results were "a convincing beat". "The evolution of the business from running regulated tenancies into a 21st Century landlord is proving more rapid than we thought and the business has delivered on its debt cutting with a LTV of 48%."Shares in Grainger were up 6.9% to 210.6p at 12:45 on Thursday.RD