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(Sharecast News) - Residential real estate investment trust Grainger delivered full-year results slightly below expectations on Thursday but kept hold of its targets to grow profits over the short and medium term.
Net rental income was up 12% over the 12 months to 30 September at £123.6m, driven by a strong delivery of pipeline scheme launches, which contributed £17.7m, the company said. On a like-for-like basis, rental growth was 3.6%, down from 6.3% but in line with the long-run average.
Adjusted earnings were down 1% at £91m as the company continued recycle out of its low-yielding, non-core assets - namely through the reduction of its regulated tenancy business. However, EPRA earnings improved 12% to £53.7m, lifting EPRA earnings per share up 12% to 7.3p.
Nevertheless, according to analysts at Berenberg, FY25 results were "a little below market expectations".
Headline pre-tax profit, however, surged 153% to £102.6m as a result of positive valuation movements. The company booked a net valuation gain on investment property of £29.5m during the period, compared with a £32.5m loss the previous year.
Net tangible assets per share came in at 298p, flat on last year and some 2% below consensus forecasts, though in line with management's expectations.
Meanwhile, the company declared a final dividend of 5.46p per share, lifting the total payout for the year to 8.31p, up 10% but slightly under the 8.5p expected by the market.
"It has been another excellent performance for Grainger and the outlook for the business is bright as we continue to deliver sector-leading earnings growth despite macro-economic headwinds," said chief executive Helen Gordon. "We are committed to continuing to deliver progressive dividend growth for years ahead."
Looking ahead, Grainger said it continues to target £60m in EPRA earnings in FY26, growing to £72m by FY29, in line with previous guidance, helped by the delivery of its £343m committed pipeline.
Shares were down 2.2% at 184.4p by 0927 GMT.
