Member Article

£40m plus profit decline for Newcastle property firm Grainger

Newcastle-based residential property firm Grainger plc has reported a significant decline in profit as the company released its half yearly results this morning.

Pretax profit for the six months to March 31 was £9.1m compared to a pretax profit of £49.8m in 2014.

The firm said that the most significant movements which contributed to the £40.7m decrease were the £18.2m impairment of receivables due from ERIL and a £13.9m adverse variance on derivatives.

Moreover, valuation gains within the company’s joint ventures reduced by £12.7m having previously benefited from the significant growth in the London markets to March 2014. This was reportedly offset by a £7.6m increase in profit from Development sales and a £7.0m increase in profits from residential sales.

In addition, Grainger’s revenue also decreased to £125.9m from £190.0m last year. However, the company’s sales performance showed some positivity, with profit from sales up to £45.1m from £42.8m last year.

Andrew Cunningham, Chief Executive of Grainger plc,remains focussed on growing the business, he said: “The fundamental drivers supporting housing remain positive with labour market conditions set to continue to improve and mortgage interest rates remaining, at least in the short term, at current low levels.

“After two years of very strong valuation increases, we are pleased to report that the value of our UK portfolios continue to rise steadily and has again performed better than the general housing market, demonstrating the strength of our assets and quality of our management.

“Our focus, over the last few years, has been on growing our market rented residential business, where we can draw on our proven track record to manage properties and generate good shareholder returns.

“We have been successful in doing so, having acquired over 400 properties in the period and with c.1,070 new market rented homes in our current pipeline expected to complete over the next two years. Our attention going forward will remain on growing this part of the business and continuing to seek out attractive investment opportunities in regulated tenancy portfolios.”

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