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» 20/05/2009

INTERIM RESULTS FOR THE SIX MONTHS TO 31 MARCH 2009

Grainger plc, the UK's largest quoted residential property owner, announces its results for the six months ended 31 March 2009.

Key financial performance data

· Operating profit of £41.3m (31 March 2008: £48.2m) before valuation, provision and goodwill movements.
· Underlying loss before tax of £3.1m:
o Loss before tax of £143.0m (31 March 2008: £0.2m) impacted by inclusion of one-off costs relating to the early conversion of the majority of convertible debt (£31m) and three non-cash related items, namely mark to market adjustments on financial instruments (£38m), property valuation deficits (£40m) and other impairment provisions (£25m)
· Successful early conversion of 78% of convertible bond to produce net asset value increase of £42m.
· Gross NAV per share of 472p (30 Sept 2008: 535p), and Grainger NAV of 416p (30 Sept 2008: 520p); full valuation not undertaken at half year.
· Completed sales from core and retirement portfolios totalled £55m, with total pipeline (including properties in solicitors’ hands and contracts exchanged) of £86m at 31 March 2009. As of 15 May 2009, this figure had increased to £108m.
· Combined with sales made from the development division totalling £23m, and the development sales pipeline of £13m this brings the anticipated total sales revenue to £144m; the Company is confident that it will meet its 30 September 2009 interest cover covenant test well before the due date.
· Given the Group’s continuing focus on cash conservation and ongoing unpredictability in the market, the board has decided to defer any decisions on dividends until after the year end.

Operational highlights

· Strong cash generation ongoing from a wide variety of sources, including rent, property and asset management fees and sales of vacant and investment assets.
· Good progress with the Group’s strategy to conserve cash through asset sales, restricted purchase activity (£22m compared to £158m in the corresponding period in 2008) and overhead savings.
· Liquid and defensive nature of the Group’s portfolios proven by the successful sales programme of assets at approximately 7% below 30 September 2008 values, despite challenging market conditions.
· Completion of 164 of the 212 unit development at Hornsey Road, London. To date, 35 reservations have been secured from the first release of 42 units at the end of March and a further 19 reservations from the second release of 50 units in May, with 62 affordable units handed over to Guinness Developments.
· Planning permission secured on appeal for residential site in Gateshead.


Robin Broadhurst, Chairman of Grainger plc, commented:

"With the benefit of our large, diversified portfolio, range of activities and ability to generate cash through rents sales and management fees, we have continued to perform against our short to medium term objective by managing the business in a prudent way through this current adverse cycle. In particular, we are focused on cash conservation through maximising sales revenue, curtailing property expenditure, reducing overheads and on ensuring that we remain covenant compliant.

"We also believe that there will be opportunities for large scale professional landlords to play a significant part in meeting the overall national housing requirements. This is underpinned by the announcement of the Homes and Communities Agency's Private Rented Sector Initiative which is designed to create opportunities for investors to enter the private rented sector on large scales. Our expertise across all areas of residential activities, underpinned by our unique and diverse portfolio and supported by our property management structure, will enable us to take advantage of these new opportunities, as well as continuing to run and manage our existing business productively."



For further information, please contact:


Grainger plc

Andrew Cunningham/Dave Butler

Tel: +44 (0) 20 7795 4700


Financial Dynamics

Stephanie Highett / Dido Laurimore / Jamie Robertson

Tel: +44 (0) 20 7831 3113


Associated files : Results Presentation

Associated files: Grainger Interim Statement March 2009 - Final Approved.pdf (146 KB)

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Grainger plc registered in England. Company registration number: 125575. Registered office: Citygate, St James' Boulevard, Newcastle upon Tyne, NE1 4JE.