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INTERIM RESULTS

20 May 2010
Grainger plc (“Grainger”/”Group”/”Company”)

INTERIM RESULTS FOR THE SIX MONTHS TO 31 MARCH 2010

Grainger shows return to profit and active acquisitions and disposal programme

Grainger plc, the UK’s largest quoted residential property owner, announces its results for the six months ended 31 March 2010.

Financial highlights

• Operating profit of £48.0m (31 March 2009 £41.3m) (before valuation movements and non-recurring items) an increase of 16% over the same period in 2009

• Profit before tax improved to £3.5m (31 March 2009: £143.0m loss)

• Gross NAV per share of 191p (30 Sept 2009: 194p*); Grainger NAV of 173p (30 Sept 2009: 177p*). Full valuation not undertaken at half year

• Residential sales of £79m completed (2009: £55m) with margins on sales of vacant properties improving to 42% from 37% in 2009. These sales have been made at values approximately 6% above September vacant possession values, during which time the average Nationwide and Halifax indices increased by 3%

• Total sales pipeline (including properties in solicitors’ hands and contracts exchanged) at 31 March 2010 was £108m (2009: £86m) and this had increased to £121m at 14 May 2010.

• Successful Rights Issue completed in December 2009, raising £236.7m (net), providing Grainger with additional equity finance to improve the Group’s balance sheet leverage ratios, reduce the overall size and cost of its debt and better enable it to recommence active trading

• At 31 March 2010, Group cash and committed facilities amounted to c.£300m

• Interim dividend of 0.5p per share (2009: nil)

Operational highlights

• Following improved market stability and strengthening of its financial position, the Group has commenced selective residential acquisitions at attractive prices. At 31 March, property valued at £43m had been acquired (completed, exchanged contracts or put into solicitors’ hands). At 14 May, this figure was £52m

• Acquisitions focus is on well priced, quality properties in areas where the Group anticipates long term capital growth will be the strongest and where values will be most protected against any future downturn

• Group’s ability to generate income in adverse conditions remains strong with cashflow from operating activities of £50m (31 Mar 2009: £55m)

• In addition to the appointment of Andrew Cunningham as Chief Executive in October 2009, in April the Group announced the appointments to the Board of Nick Jopling (Executive Director responsible for property and real estate matters), Mark Greenwood (Finance Director) and Peter Couch (Chief Operating Officer and Executive Director responsible for Grainger’s Retirement Solutions business).

• On 6 May, Grainger announced a recommended offer for Sovereign Reversions plc (“Sovereign”) of 202p per share representing an acquisition price of approximately £34.2m. At 31 October 2009, Sovereign’s interim results indicated that it owned equity release assets of c.£63.7m (as at 30 April 2009 values)

* Restated to allow for the effects of the Rights Issue, which was completed in December 2009

Robin Broadhurst, Chairman of Grainger plc, commented:

“Prospects for the Group are good. We have a resilient high quality portfolio of residential assets supported by an experienced team with a broad base of knowledge across the residential sector. Recently announced Board appointments and our financial restructuring will serve to strengthen this position further.

“Although we anticipate that general economic conditions will continue to be challenging for some time, our resilient, cash generative portfolio will stand us in good stead. Our immediate focus is to take advantage of buying opportunities in our core reversionary portfolios and to leverage our residential skills and experience to explore value accretive and well-priced opportunities on behalf of our shareholders, investors and partners.

“Historical results show the long term strength of returns from the residential sector compared to commercial real estate: over the last 50 years real house prices have risen by 274% compared to a 55% fall in real commercial property values (source: IPD). Returns such as these together with, for example, the HCA’s Private Rented Sector Initiative, have heightened interest in the residential sector as an asset class suitable for institutional investment.

“We believe that we are well placed to take advantage of this momentum and look forward to the future with confidence.”

Analyst presentation

Grainger plc will be holding a presentation for analyst and investors today at 11.00a.m. at JP Morgan Cazenove, 20 Moorgate, London, EC2R 6DA.

The meeting can be accessed through the following dial-in facility and a copy of the presentation slides will be available on Grainger’s website, www.graingerplc.co.uk.

Participant Dial in Number: +44 (0) 1452 587 356
The Conference ID number is 76910537


For further information, please contact:

Grainger plc
Andrew Cunningham/Dave Butler
Tel: +44 (0) 20 7795 4700

Financial Dynamics
Stephanie Highett / Dido Laurimore / Rachel Drysdale
Tel: +44 (0) 20 7831 3113

FOR FULL RESULTS, CLICK HERE

Associated files: Interim-Results-for-the-six-months-ending-31-March-2010(1).pdf (0 KB)

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Grainger Deutschland GmbH, Sitz der Gesellschaft: Frankfurt am Main, HRB 84501, Geschäftsführer: Peter Brock. Ust.-IdNr. DE252464659