Strong figures as Grainger Homes prepares to face shareholders

Feb 10 2010 By Karen Dent, The Journal

MORE signs the housing market is on the up were revealed by Grainger today, as the property giant prepared to face shareholders angry at a multi-million pound payment to its former boss at a meeting in Newcastle.

The company - Britain’s biggest landlord - is selling more properties and at higher prices than a year ago, according to figures issued for the four months to the end of January ahead of today’s annual general meeting.

Its trading pipeline of residential sales stood at £83.9m, a 42% rise on last year’s figure of £58.9m, and it is now back in the market for buying residential properties.

Grainger sold 321 units worth £54.5m during the four month period, more than double the 173 it sold for £25.8m in the same period last year.
It said sales were up because the improved sales pipeline is now feeding through into completed sales and prices are rising across the board.

Raising £237m from shareholders in December and more stable conditions in the market has also persuaded the Newcastle-based business to start snapping up properties again.

Chief executive, Andrew Cunningham, said: “The housing market has shown encouraging signs of stability. We continue to sell well at prices above the last reported valuation, while our improved financial position arising from the recent refinancing and rights issue has enabled us to recommence our acquisition programme.”

Grainger pointed to an increase in mortgage lending approvals, figures from the Halifax Index of House Prices - which showed a seventh monthly rise in January - plus continued low interest rates and a shortage of property for sale as evidence of the recovery.

But it warned wider problems including high unemployment or a squeeze on public spending could still rock the recovery this year.

Shareholders are expected to raise questions at Graingers AGM today over almost £3m paid to former chief executive Rupert Dickinson, who left the company because of ill health last October.

Investor groups PIRC and the Association of British Insurers have both questioned the £2.98m payment, which is believed to be around six times Mr Dickinson’s annual salary. Grainger said the payment had been made on legal advice.