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Can Grainger Nab A Few More Market Tenants Following FY Results?

Published 08/11/2018, 13:00
Updated 21/10/2020, 09:15

Up until the start of summer, the UK’s largest listed residential landlord was having quite the time of it. Opening at £2.88, the stock had, after a first quarter wobble, climbed to an 11 year peak of £3.23 by mid-June, lifted in part by May’s well-received half year results.

Grainger PLC

Yet since then the stock has seen basically all of that growth unravel. By the end of October – a month that admittedly wasn’t kind to anyone – the landlord had returned to the lows struck in early March, finding itself dipping under £2.70. Grainger PLC now sits at a current trading price of £2.85.

During that decline, Grainger actually posted a healthy update at the end of September. With CEO Helen Gordon celebrating the firm’s ‘significant success’, the company announced year-to-date overall like-for-like rental growth of 4%, against the 3.7% seen at the same point in 2017. In its private rental sector division like-for-likes rose 3.1%, with its secured PRS investment pipeline now at £817 million and ‘on track to deliver a step change’ in the firm’s net rental income and dividend ‘as the pipeline stabilises’.

As for Wednesday’s results, the focus may actually more be on the forecasts for the upcoming financial year. Back in September, Grainger said that a number of its schemes would start to become income producing during that period, including 1300 units set for delivery across its schemes in Manchester, Bristol, Birmingham, Sheffield and Milton Keynes, so any word on what that’ll mean financially will be welcome.

Investors will also want to see similar pre-tax profit growth to that which was posted during May’s interim results, a 23% increase to £50.6 million.

Grainger PLC (LON:GRI) has a consensus rating of ‘Buy’ alongside an average target price of £3.35.

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