PROPERTY giant Grainger hailed a strong operational performance and a continued reduction in debt as it boosted business across its main trading sales, rents and fees income streams.
The Newcastle business said it had continued to out-perform the market over the last four months. The UK’s largest residential landlord, which owns property in Britain and Germany, completed sales of £89.8m taking its total sales for the last 10 months to £202.1m, up by 13% on a year ago.
There was also a 7.2% rise in total rents for the 10-month period to £75.1m, while fee income for the 10- month period leapt by 56% to £7.8m and debt was reduced to £1,341m from £113m since the end of September.
The company cautioned that the general macro-economic backdrop in the UK and Europe in particular was more fragile than when it reported its interim results in May.
But despite a general fall in house prices, Grainger said “a number of factors” positively supported prices in London and the South East where almost two-thirds of its UK portfolio is based.
And the German housing market, where it also owns property, has been more robust during the period.
Chief executive Andrew Cunningham said: “Grainger continues to outperform the general residential market and we can again report strong increases in each of our three revenue streams – sales, rents and fees.
"As stated previously, key strategic themes for 2012 have been to increase the proportion of profit generated from rents and fees and to reduce debt.
“Considerable progress has been made to achieve these and this focus will be maintained in 2013 as we continue to build sustainable sources of income.”
He said that Grainger was outperforming the wider housing market because its UK properties tended to be secondhand, low average value and not refurbished, and were actively managed.
Grainger is now awaiting the publication of the Government’s Montague Review on barriers to institutional investment in the private rented residential sector and said it was well positioned to take advantage of any opportunities arising from it.
In the six months to the end of March, Grainger increased sales from its UK portfolio of property by 5.8% to £94.6m and its fee-based income rose by 61.2% to £5m.
In the same period, its operating profit (before valuation movements and non-recurring items) rose by 7.9% to £64.1m but pre-tax profits dipped to £15.1m from £65.2m.