28 January 2016
Grainger plc
Strategy Update
Helen Gordon, CEO of Grainger plc, the UK’s largest listed residential landlord, today
announces a strategy update, commenting:
“Since joining Grainger on 3rd November I have worked closely with our team, undertaking a
deep review of every aspect of the business. I have been hugely impressed with the
unrivalled knowledge and expertise our people have and the platform that has been
developed. Our high quality regulated tenancy portfolio provides an excellent foundation
from which we can grow our offering of private rented sector (“PRS”) homes.
“However, it is clear that swift and decisive action is required to capitalise on the compelling
PRS market opportunity and to enable Grainger to realise its potential of being the UK’s
leading private landlord. We will transition to one highly focused business that will deliver
improved and sustainable, rental asset led shareholder returns.”
There are three key themes around which action will be taken:
Grow rents
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Inject pace and accelerate the acquisition of existing and newly built rental homes;
Re-allocate development team resources to deliver new PRS stock;
Refocus the acquisitions team to improve access and conversion of PRS opportunities.
Simplify and focus
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Divest of two divisions: Retirement Solutions (Equity Release) and Germany;
o Post-disposals, overheads will reduce by c.10%;
Reduce overheads by transitioning to a simpler, streamlined structure;
o Operational review underway, report back at HY results in May;
Exit non-core development assets;
Prioritise direct investment, with no new funds, and no more focus on fee generation;
Reduce our cost of financing; targeting 4% cost of debt;
Concentrate resources on two core assets: regulated tenancies and PRS.
Build on our heritage
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Continued commitment to our high quality, regulated tenancy portfolio which delivers
excellent total returns and cash generation which supports our PRS growth;
Maximise the opportunities from our market leading residential platform by exploiting our
existing competitive advantages.
As we look out to 2020, our PRS-led strategic targets are:
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Invest over £850m into PRS assets to drive rental income growth;
Net rents and income* to more than cover overheads, expenses and financing costs;
Net rental income to exceed profit from sales;
Dividend will increase, reflecting the greater proportion of rental income.
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In addition the Board of Grainger plc is pleased to announce that Vanessa Simms will join
the Group as Finance Director, earlier than anticipated, on Thursday 4 February 2016.^
The Group also announces the following reporting dates in respect of its 2016 financial
calendar:
Q1 2016 trading update
Thursday 11 February 2016
H1 2016 results
Thursday 19 May 2016
Q3 2016 trading update
Thursday 11 August 2016
FY 2016 results
Thursday 1 December 2016
* Including other recurring income, but excludes normal sales income.
Subject to normal FCA confirmations, as previously announced.
^
-ENDS-
Further information:
The presentation will be available on webcast as well as through dial-in facilities. Please see
details below.
Presentation materials will be made available on www.graingerplc.co.uk shortly after 9 a.m.
UK time on the morning.
Webcast link
http://www.investis-live.com/grainger-plc/567946dbaccbc70b00021c1d/sdp
Conference call details
United Kingdom
0800 368 0649
United Kingdom (Local)
020 3059 8125
All other locations
+ 44 20 3059 8125
Password
Grainger
Grainger plc
Camarco
Helen Gordon / Kurt Mueller
+44 (0) 20 7940 9500
Ginny Pulbrook / Geoffrey Pelham-Lane
+44 (0) 3757 4992/4985
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