Grainger's annual profits surge as portfolio outperforms market

20th Nov 2014 08:10

Annual profits at residential property owner and manager Grainger jumped by 26% as growth in the value of its portfolio significantly outperformed the wider market.The company also said it had made an "encouraging start" to the new financial year, though the run-up to the General Election next year risks creating "uncertainty" over the next six months.Pre-tax profit totalled £81.1m in the 12 months to 30 September, up from £64.3m the year before.The portfolio valuation increased by 14.6% over the period, ahead of the average 9.5% growth seen in the Nationwide and Halifax house price indices.Grainger said this outperformance reflected "the nature and geographic location of our assets and the benefits of our strong asset management capabilities".The company said values across every region of the UK in which it operates improved for the first time in many years.It said growth had continued in London, "albeit at varying rates" as concerns about rate hikes, the mortgage market review and the proposed mansion tax if Labour gains power in the general election, have led to an easing of price inflation."There remains, however, a significant undersupply of housing in the UK and, along with a slowly improving economy, jobs market and expected population growth, this imbalance supports a positive house price inflation environment, albeit at more sustainable levels."Gross net asset value (NAV) increased by 20% to 291p per share, while the triple NAV, or NNNAV, rose 24% to 242p, slightly ahead of the 241p expected by the market. The NNNAV is adjusted for deferred and contingent tax on revaluation gains and for the fair value of derivatives.The company proposed a final dividend of 1.89p per share, up from 1.46p previously, meaning that the full-year payout will rise 22.6% to 2.50p per share.The stock was up 3.5% at 199.3p by 08:26 on Thursday.