Grainger is on track to pay down debt pile

Kasmira Jefford
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GRAINGER, the UK’s largest quoted residential landlord, said yesterday it expects a lift in the value of its UK portfolio and an improvement in sales when it reports its half year results next month.

The Newcastle-based company, which operates in Germany as well as the UK, said completed sales from both portfolios in the six months to the end of March will be ahead of the same period last year.

Andrew Cunningham, chief executive of Grainger, has been focusing on cutting the group’s overall level of debt, which stood at £1.44bn at the end of January.

The group said yesterday that its efforts to pay down debt “will become evident” as a result of its disposal programme in the past six months. Numis analyst Chris Millington, expects to see a £80m reduction in debt in the full year.

“Grainger’s trading update shows the group is making progress across all the key areas of its business. Rents are growing strongly, values of sales are ahead of September 2011 and net debt is now starting to fall”, he said.

Grainger also anticipates both rental income and fee income will increase, mainly due to the acquisitions of HI Tricomm and the GenInvest portfolio last year.

However, the firm warned that profits may be below those achieved in the first half of 2011, when it said pre-tax profit had been “materially enhanced by the partial reversal of mark to market movements on its long term financial derivatives and by gains on acquisitions.”