Grainger (GRI) H2 2024 earnings summary

Executive summary

• Delivered another year of strong growth, with income, earnings, and margin all increasing year-over-year, supported by a robust operational platform and high customer satisfaction.

• Added 1,236 new homes, expanding the portfolio and reinforcing compounding growth through a robust pipeline.

• Upgraded EPRA earnings guidance for FY26 to £60 million, reflecting operational leverage and pipeline delivery, targeting c.50% medium-term growth.

• Strategic asset rotation and disposals funded new investments, supporting a shift to a resilient investment business.

• REIT conversion restructuring completed and on track for October 2025, expected to enhance returns and support dividend growth.

Financial highlights

• Net rental income grew 14% to £110.1 million, with like-for-like rental growth of 6.3% and occupancy above 97%.

• EPRA earnings increased 21% year-over-year to £48.0 million, while adjusted earnings fell 6% to £91.6 million due to lower sales profits.

• Dividend per share rose 14% to 7.6p, maintaining a strong, progressive dividend trajectory.

• EPRA NTA per share decreased 2% to 298p, mainly due to a one-off tax change, but returned to growth in the second half.

• IFRS profit before tax rose 48% to £40.6 million.

Outlook and guidance

• Expecting another year of double-digit net rental income growth in FY25, with rental growth above the long-term average of 3-3.5%.

• Upgraded EPRA earnings guidance for FY26 to £60 million, with potential for 50% medium-term growth based on the committed pipeline.

• Targeting an 8% sustainable total return, with recurring earnings yield of 3.5% and 4.5% capital growth.

• Dividend policy to shift to minimum 80% of EPRA earnings post-REIT conversion.

• REIT conversion on track for October 2025, expected to enhance returns and support dividend growth.