Grainger ups earnings guidance after solid rental growth

(Sharecast News) - Residential landlord and build-to-rent (BTR) group Grainger has raised its dividend by 14% on the back of a double-digit increase in rental income and profits, as the company lifted its near-term earnings forecasts. Grainger, which has a £3.4bn operational portfolio of 11,069 private rental homes and a £1.4bn build-to-rent pipeline comprising 4,730 new homes, added 1,236 new homes to its portfolio during the financial year ending 30 September.

These new home, along with like-for-like rental growth of 6.3%, drove net rental income up 14% year-on-year to £110.1m, while EPRA earnings increased 21% to £48m.

The dividend was lifted to 7.55p per share, up from 6.65p last year.

The company said it expects EPRA earnings to rise by another 50% over the medium term due to its committed pipeline of projects, hitting £60m by the financial year ending September 2026, the second upgrade to guidance, while EBTIDA margins should rise from 54% to over 60% by the year ending 2029.

At the time of its half-year results in May, the company had pencilled in EPRA earnings of £55m for the year ending 2026.

"This coming year is the last financial year before Grainger converts to a REIT, a major milestone in our transformation to becoming the leader in the UK's BTR sector," said chief executive Helen Gordon.

"The market opportunity for the UK build-to-rent sector is considerable with demand for renting growing and the shortage of rental supply worsening, and with its proven track record, Grainger is best placed to help alleviate this through continued investment and housing delivery, accelerating our growth for years to come."

The stock was up 2.3% at 227p by 0911 GMT.