Grainger improves NAV as subdued market persists

FTSE 250 residential property owner-manager Grainger improved annual gross net asset value per share but cautioned it expects subdued market conditions to persist through 2013.

The Newcastle upon Tyne headquartered firm said gross NAV increased 3.2% to 223p for the year ended September 30th 2012. The group posted a loss before tax of £1.7m, after derivative movements of £31.2m, compared to a £26.1m profit a year earlier.

Operating profit, before valuation movements and non-recurring items, increased to £126.4m from £126.2m before.

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Grainger said it continued to outperform the market with UK residential and retirement solutions valuations up 3.9% from September 2011.

Commenting on the trading environment, Grainger said: "The major housing market indices show that UK national house prices have declined slightly over the last twelve months and liquidity and transaction volumes remain low. The UK economy is likely to remain fragile in the short to medium term, exacerbated by the continuing lack of resolution of the issues around the euro."

"Against this background however, through strategic acquisitions and disposals, we have successfully repositioned Grainger to be more focused on geographic locations where economic activity is more robust," it added.

At September 30th 2012, 62% of the UK portfolio was located in London and the South East while in Germany, 82% of its properties lie in four of the more affluent areas of the country: Baden-Wrttemberg, Hesse, Northrhine-Westphalia and Bavaria.

Grainger said margins on normal trading sales were maintained at 44% while gross fee income increased by 45% to £10m.

The final dividend has been increased to 1.37p from 1.30p in 2011, giving a total dividend of 1.92p, an increase of 4.9%.

CJ