Slide 1: Excellent performance, accelerating growth
Excellent performance, accelerating growth Full Year Financial Results September 2024 21 November 2024
Slide 2: Agenda
Originate Invest Operate Agenda 1. Highlights Helen Gordon Chief Executive 2. Financial results Rob Hudson Chief Financial Officer 3. Market and business update Helen Gordon Chief Executive 4. Summary and Q&A Helen Gordon Chief Executive 5. Appendix Grainger Plc | www.graingerplc.co.uk 2
Slide 3: Continuing accelerated growth
Originate Invest Operate Continuing accelerated growth +14% +6.3% +21% £274m growth in net like-for-like EPRA disposals of rental income rental growth Earnings non-core growth assets 1,236 97.4% 25.0% c.400 Homes added* High occupancy Highly efficient Transactions Gross to Net Grainger Plc | www.gra
Slide 4: Strategic, self-funded growth continues at pace
Originate Invest Operate Strategic, self-funded growth continues at pace £274m £270m £468m disposals Disposals of non-core assets in FY24 Invested in BTR pipeline in FY24 £582m investment in FY23 and FY24 FY15 FY24 Post pipeline £32m £110m £191m Net rental income Net rental income Net rental income
Slide 5: Portfolio expansion
Originate Invest Operate Portfolio expansion Adding 1,236* new homes this year, delivering c.£15m** of additional net rental income The Copper Works, Cardiff Millwrights Place, Bristol The Astley, Manchester Forward Fund Forward Fund Stabilised acquisition 307 homes 231 homes 135 homes Launched Feb’
Slide 6: Substantial opportunity for growth
Originate Invest Operate Substantial opportunity for growth EPRA Earnings set to grow by c.50% over medium term OPERATIONAL PORTFOLIO* BTR PIPELINE 11,069 homes, £3.4bn 4,730 homes, £1.4bn Regulated Build to Rent Portfolio** Committed Secured Planning/ Tenancies Legals £648m £2,781m £481m 1,330 home
Slide 7: Our future pipeline growth potential
Originate Invest Operate Our future pipeline growth potential Strategic joint Stabilised Strategic land Future phases on ventures acquisitions acquisitions for existing schemes direct development TFL, London The Astley, Cardiff Manchester Exeter Sheffield Network Rail, Regions The Forge, Wellesley,
Slide 8: Grainger delivering compounding growth
Originate Invest Operate Grainger delivering compounding growth Grainger’s rental growth offsetting yield expansion… … delivering resilient EPRA NTA through cycles 7.7% per share 6.3% MDR*: (8)p 317p 297p 305p 298p 4.7% 278p 285p 3.6% 3.0% 1.0% 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023
Slide 9: Growing demand and shrinking supply of rental homes
Originate Invest Operate Growing demand and shrinking supply of rental homes Positive long-term outlook for rental demand Rental demand forecast to grow 20% Cumulative increase in number of BTR/PRS households 20% growth in renters predicted by 2031 1,300 Strongest demand in Grainger cluster location
Slide 10: Best placed to thrive in a changing rental market
Originate Invest Operate Best placed to thrive in a changing rental market Change: High quality homes and leading British Deputy Prime Minister: Increasing operating platform rental standards Systems, processes and people "Rent controls restrict housing supply, which does not help In-house operation
Slide 11: Delivering on our ambitions
Originate Invest Operate Delivering on our ambitions Growth in net rental income EPRA Earnings growth delivered Operational leverage delivered +15% 9-yr CAGR EBITDA margin expansion 2015 to today 52% 53% 52% 53% 54% 51% £18m 47% £14m £15m £12m 43% £40m £48m £28m 34% £(1)m 19% £(39)m £110m £44m £40m
Slide 12: Grainger continuing to deliver
Originate Invest Operate Grainger continuing to deliver Another excellent performance Strong market fundamentals Strong positive outlook on earnings REIT conversion for FY26 a major milestone in Grainger’s transformation Set to deliver continued accelerated growth Millwrights Place, Bristol Grainger
Slide 13: FY24 Financial Results
2. FY24 Financial The Silver Yard, Birmingham Results Rob Hudson Chief Financial Officer
Slide 14: Financial highlights
Originate Invest Operate Financial highlights Excellent performance driven by our platform Like-for-Like Rental Growth Total Net Rental Income EPRA Earnings +6.3% +14% +21% (141)bps FY24: £110.1m FY24: £48.0m FY23: 7.7% FY23: £96.5m FY23: £39.8m Adjusted Earnings Dividend per share EPRA NTA per shar
Slide 15: Income statement
Originate Invest Operate Income statement Excellent EPRA Earnings growth of 21% Net rental income up 14% in FY24, driven by FY24 FY23 Change delivery and strong lease up of our pipeline Net rental income £110.1m £96.5m +14% Total LfL rental growth strong at 6.3% (FY23: 7.7%) Mortgage income (CHARM)
Slide 16: Net rental income
Originate Invest Operate Net rental income 14% NRI growth driven by strong lease up of new openings and 6.3% LfL rental growth Strong lettings £10.9m performance continues, £110.1m with LfL contributing £6.1m £(3.4)m (FY23: £8.7m) £6.1m BTR investment delivering £11m of net rent in FY24 as new schem
Slide 17: EPRA net tangible assets (NTA)
Originate Invest Operate EPRA net tangible assets (NTA) Increasing net rent and H2 return to valuation growth results in NTA of 298pps, up from H1 of 294pps Overall Portfolio valuation resilient at 17p (0.8)%, up 0.8% excluding MDR impact* 2p Operational BTR/PRS portfolio valuation (0.9)% driven by:
Slide 18: Net debt
Originate Invest Operate Net debt Significant investment in pipeline delivery, with planned accelerated disposals of £274m Net debt marginally up in FY24, reflecting investment Operating cashflow £304m in delivery of the BTR £51m £1,453m pipeline in line with plan £1,416m £(165)m* £20m Operating cas
Slide 19: Strong, secure and de-risked balance sheet
Originate Invest Operate Strong, secure and de-risked balance sheet Protection against rising rates, reducing LTV to preserve strong earnings momentum Continuing balance sheet strength FY24 Cost of debt fixed in mid 3%s (95% hedged with a Net debt £1,453m hedge maturity of c.4 years) Loan to value 3
Slide 20: Under a year to REIT conversion
Originate Invest Operate Under a year to REIT conversion A significant landmark in the transition of our business Timing remains on track Enhancing returns REIT conversion remains on track for Tax saving of 25% of BTR profits post- October 2025 conversion FY26 to be our first year as a REIT 50 bps i
Slide 21: Transformative growth in NRI and earnings
Originate Invest Operate Transformative growth in NRI and earnings Pipeline set to grow our net rental income to £191m Committed pipeline to Committed pipeline £481m Secured £541m Planning / Legals £379m deliver £38m of additional net rent +£20m £191m Full pipeline will deliver +£23m £171m substanti
Slide 22: Substantial EPRA Earnings growth potential
Originate Invest Operate Substantial EPRA Earnings growth potential Upgraded FY26 EPRA Earnings of £60m, with substantial growth over medium term Upgraded FY26 EPRA Earnings of £60m EPRA Earnings to grow c.50% over medium term Further Medium term EPRA Earnings set for substantial growth growth with
Slide 23: Sustainability progress and impact
Originate Invest Operate Sustainability progress and impact Enhanced portfolio performance Awards and benchmarks 94% Net Zero Carbon progression FTSE4Good Since 2010 BTR/PRS portfolio with EPC ratings A-C Launched net zero pathway plan EPRA – Sustainability Best Gold Award Practice Reporting Asset n
Slide 24: Financial summary
Originate Invest Operate Financial summary Transformative growth trajectory Strong balance sheet, fully funded pipeline and fixed, low cost of debt gives strength to capital structure, with flexibility over disposals Net rental income and dividend growth of 14% driven by lease up of new schemes and
Slide 25: Market and Business Update
3. Market and Business Update Helen Gordon Chief Executive
Slide 26: Demand continuing to grow whilst supply shortage worsens
Originate Invest Operate Demand continuing to grow whilst supply shortage worsens Demand for renting continues to grow Total population expected to grow by 3m people ONS UK population projections 75.0 70.6 71.0 71.4 69.0 69.6 70.2 67.1 68.4 70.0 67.0 +1m 34 35 65.0 Millions 60.0 55.0 50.0 Forecast i
Slide 27: Positive rental outlook for Grainger
Originate Invest Operate Positive rental outlook for Grainger Above long-term historical average of 3-3.5% Rental growth to continue strongly in FY25 Our customer affordability remains healthy compared to the market above long term historical average of 3-3.5% and England Rental Affordability – Prop
Slide 28: Grainger's leading operating platform a key differentiator
Originate Invest Operate Grainger’s leading operating platform a key differentiator and value driver Data & Insight Digital-first Procurement Customer service Market leading data & Direct-to-consumer Scale increases our Best in class customer insight capability online lettings ability to drive servi
Slide 29: Strong operational performance
Originate Invest Operate Strong operational performance Delivered by our market-leading operating platform Strong LfL rental growth Grainger’s Portfolio 100% High occupancy BTR/PRS Occupancy: 95% 94% 98% 99% 97% 131.5 80% 95% considered ‘Fully Let’ 126.5 60% 6.3% 121.5 116.5 99% rent collection 40%
Slide 30: High customer satisfaction
Originate Invest Operate High customer satisfaction Grainger’s Customer Net Promoter Score compares favourably to Top Customer Net Promoter Score, +12%, consumer brands in line with Amazon and ahead of consumer Good Favourable Excellent brands such as Coca-Cola and Google 9/10 customer satisfaction
Slide 31: The UK's leading responsible landlord
Originate Invest Operate The UK’s leading responsible landlord Healthy customer affordability High customer satisfaction A great place to work 28% 9/10 Grainger customer average Grainger customers “really like Recognised as a Top Employer affordability ratio their Grainger home” and a leader in Equa
Slide 32: Carefully selected investment locations
Originate Invest Operate Carefully selected investment locations A research-led investment approach to capital allocation High demand / supply Cities Strategy High demand / supply fundamentals and low fundamentals and growth potential high growth potential London Rigorous analysis of key investment
Slide 33: Cluster Strategy driving performance
Originate Invest Operate Cluster Strategy driving performance Operational efficiencies improving further with gross to net down to 25.0% YORKSHIRE 1,035 NORTH EAST Newcastle 344 Leeds & Sheffield Operational 1,035 Operational 344 NORTH WEST Manchester & Liverpool 1,900 SOUTH EAST Incl. Milton Keynes
Slide 34: Portfolio expansion in FY25
Originate Invest Operate Portfolio expansion in FY25 Adding c.800 new homes, delivering c.£13m of additional net rental income Windlass (Ph.2), Tottenham Hale, London Glasshouse Square, Redcliff Quarter, Bristol Forward Purchase Forward Fund 65 homes 468 homes Launched Oct’24 Launching late 2025 NRI
Slide 35: Grainger's compelling investment case
Originate Invest Operate Grainger’s compelling investment case FY26 EPRA Earnings to grow to £60m 1 Compounding earnings growth and by c.50% over medium term 8% sustainable Total Accounting 2 Attractive, low risk total return Return 3 Secure, strong and flexible balance sheet Cost of debt fixed in m
Slide 36: Grainger continuing to deliver
Originate Invest Operate Grainger continuing to deliver Another excellent performance Strong market fundamentals Strong positive outlook on earnings and returns Set to deliver continued accelerated growth Millwrights Place, Bristol 36
Slide 37: Appendix
Originate Invest Operate Appendix Contents Market value balance sheet Page 38 1. Financial information EPRA Earnings Page 39 EPRA NTA Page 40 EPRA NRV, NTA, NDV Page 41 Debt facilities Page 42 Total accounting return Page 43 Portfolio overview Page 44 2. Property information Portfolio summary Page 4
Slide 38: Market value balance sheet
Originate Invest Operate Market value balance sheet Market value balance sheet (£m) FY24 FY23 Residential – BTR/PRS 2,708 2,423 Residential – regulated tenancies 591 693 Residential – mortgages (CHARM) 57 67 Forward Funded – BTR work in progress 266 441 Development work in progress 84 126 Investment
Slide 39: EPRA Earnings
Originate Invest Operate EPRA Earnings FY24 FY23 Adjusted EPRA Adjusted EPRA £m Adjustments Adjustments Earnings Earnings Earnings Earnings Net rental income 110.1 - 110.1 96.5 - 96.5 Profit from sales 43.6 (43.6) - 57.8 (57.8) - Mortgage income (CHARM) 4.6 - 4.6 4.7 - 4.7 Management fees 8.1 - 8.1
Slide 40: EPRA NTA
Originate Invest Operate EPRA NTA FY24 FY23 IFRS Adj to market IFRS Adj to market EPRA NTA EPRA NTA statutory value, tax, statutory value, tax, £m balance balance balance derivatives, balance derivatives, sheet sheet sheet intangibles sheet intangibles Investment property 3,028.3 - 3,028.3 2,948.9 -
Slide 41: EPRA NRV, EPRA NTA and EPRA NDV
Originate Invest Operate EPRA NRV, EPRA NTA and EPRA NDV FY24 FY23 EPRA NRV EPRA NTA EPRA NDV EPRA NRV EPRA NTA EPRA NDV £m IFRS Equity attributable to shareholders 1,893.7 1,893.7 1,893.7 1,928.6 1,928.6 1,928.6 Diluted NAV 1,893.7 1,893.7 1,893.7 1,928.6 1,928.6 1,928.6 Include: Revaluation of oth
Slide 42: Debt facilities
Originate Invest Operate Debt facilities Balance sheet, funding and hedging: strong, secured and de-risked Facility Lender Size Drawn Maturity Core Facilities: Corporate Bond Listed £350m £350m Apr 2028 Corporate Bond Listed £350m £350m Jul 2030 Revolving Credit Facility HSBC, NatWest, Barclays £392
Slide 43: Total accounting return
Originate Invest Operate Total accounting return Sustainable low risk 8% TAR, underpinned by: 8.0% Extremely resilient income return, underpinned by low volatility residential income and efficient operating platform 4.5% capital return Resilient rental growth driven Assuming 3.5% valuation growth, a
Slide 44: Portfolio overview
Originate Invest Operate Portfolio overview Regulated tenancies BTR/PRS Customer has the right to live in the property for life Leases with typical duration of 1-3 years Sub-market rent set by Valuation Office Agency Market rents Upon vacancy Grainger sells the property Returns based on Returns comp
Slide 45: Portfolio summary
Originate Invest Operate Portfolio summary Market value Net Rent Units £m £m Net yield* Residential – BTR/PRS 9,443 2,708 107 4.4% Residential – regulated tenancies** 1,146 591 10 1.8% Residential – mortgages (CHARM) 326 57 n/a n/a Forward Funded – BTR work in progress - 266 - - Development work in
Slide 46: Valuation summary
Originate Invest Operate Valuation summary Capital H1 Valuation H1 Valuation H2 Valuation FY24 Valuation Portfolio Homes Value movement movement movement movement (pre-MDR) (post-MDR) £m £m % £m % £m % £m % BTR/PRS Portfolio London & SE 3,785 1,276 (26) (2.0)% (40) (3.1)% 9 0.7% (31) (2.5)% Regions
Slide 47: Portfolio movements
Originate Invest Operate Portfolio movements Sep 23 Additions Disposals Transfers Valuation Sep 24 £m £m £m £m £m £m BTR/PRS London & SE 1,324 62 (117) 39 (31) 1,277 Regions 1,099 35 (31) 322 6 1,431 Total BTR/PRS 2,423 97 (148) 361 (25) 2,708 Regulated tenancies London & SE 590 3 (79) - (2) 512 Reg
Slide 48: Portfolio geographical breakdown
Originate Invest Operate Portfolio geographical breakdown BTR/PRS & Regulated tenancies (FY24) BTR/PRS Regulated tenancies Region Units Market Change Net Units Market Change Net value vs FY23 Yield* value vs FY23 yield* £m £m London & SE 3,785 1,276 (2.5)% 4.1% 787 512 (0.4)% 1.7% South West 741 302
Slide 49: PRS portfolio
Originate Invest Operate PRS portfolio Top 20 assets by Rent (ERV) Unit mix # Asset City Postcode Units Studio / 1 bed 2 bed 3 bed Area Sq ft** 1 Clippers Quay Manchester M50 3AF 510 162 290 58 371,622 2 The Filaments Manchester M3 5PF 376 98 235 43* 246,416 3 The Silver Yard Birmingham B4 6GF 375 1
Slide 50: Recycling capital to drive continued growth
Originate Invest Operate Recycling capital to drive continued growth Flexibility to match investment with sales Highly cash generative Consistent cashflow from vacant sales Existing Headroom (£0.5bn) Increased asset recycling programme Pipeline £200m+ of operating cashflow p.a. Strat Land (£0.1bn) P
Slide 51: Committed pipeline schedule
Originate Invest Operate Committed pipeline schedule No. Targeted Est. Grainger Spend to Gross yield Committed Projects units launch Status investment date target** Forward funding / acquisition West Way Square, Oxford 150 Early FY25 On site £68m £60m c.5.5% Seraphina Apartments, Fortunes Dock, Lond
Slide 52: Secured pipeline schedule
Originate Invest Operate Secured pipeline schedule Est. Grainger Spend to Gross yield Secured Projects No. units Targeted launch Status investment date target** Direct Development Waterloo, London 215 TBC Consent granted £130m* £14m c.5.0% Exmouth Junction, Exeter 230 TBC Acquired £60m £12m c.6.25%
Slide 53: Multiple Dwellings Relief on Stamp Duty Land Tax
Originate Invest Operate Multiple Dwellings Relief on Stamp Duty Land Tax MDR was specifically introduced to encourage investment into BTR/PRS and allowed investors to pay the same SDLT when buying multiple properties as would be due when buying each property individually In the Spring Budget, the C
Slide 54: Future reporting dates
Originate Invest Operate Future reporting dates 2025 AGM & Trading update 5 February Half year results 15 May Trading update September Full year results 20 November Grainger Plc | www.graingerplc.co.uk 54