Grainger

Website: Grainger
Index: FTSE 250
EPIC: GRI
Supersector: Real Estate
Sector: Real Estate Investment and Services
Subsector: Real Estate Holding and Development
Market Cap: £1.22B
Payout Frequency: Semi-Annual

Grainger Dividend Analysis and Summary

Dividend details (interim)

Coverage and financial support

H1 EPRA EPS: 4.2p; interim DPS 2.94p implies coverage of ~1.43x (payout ~70%).
Operational underpinnings: Net rental income +7.8% to £66.1m; EPRA earnings +4% to £31.4m; occupancy 95.9%; LfL rental growth +3.1% (FY guidance 3.0–3.5%).
Cash and balance sheet: c.£200m+ operating cash flow p.a.; average cost of debt 3.2%; facilities extended (£540m to 2033); hedging at 94% through FY29.
Leverage: Net debt £1,524m (?4%); LTV 40.2% (vs 38.4%); plan to deleverage to ~30% LTV by FY29 via disposals.
Capital base: EPRA NTA 290p (?3%); IFRS loss driven by modest valuation decline (outward yield shift).

Analyst view: sustainability and growth trajectory

Sustainability: The interim dividend is well covered by recurring earnings and supported by resilient rental demand, high occupancy, and inflation-linked rent dynamics. As a REIT, Grainger’s property income is largely distributed via PID, and strong operating cash flows plus a long-dated, mostly hedged debt profile underpin near-term dividend capacity.
Growth: Management guides to FY26 EPRA earnings of £60m (8.1p per share) and FY29 of £72m (9.7p), implying continued headroom for progressive dividends if targets are met. Earnings accretion from the committed BTR pipeline and operating margin expansion (target EBITDA margin >60% by FY29) support a continued gradual dividend growth path.
Capital allocation: Near-term priority to delever (£300–350m by FY29) alongside completing the pipeline. This suggests disciplined, incremental dividend growth rather than step-ups, with optionality for buybacks/acquisitions later if deleveraging progresses.

Structural and policy factors to note

REIT status: This is the first period reporting as a REIT, aligning dividend policy with REIT distribution requirements and increasing the likelihood of PIDs going forward.
Renters’ Rights Act (effective 01/05/2026): Management expects to operate effectively under the new regime; sector dynamics may favor scaled, professional landlords, potentially supporting earnings durability.
Financing: Extension of £540m of core banking facilities to 2033 at lower margins reduces finance costs (~£1m p.a.) and supports cash flow visibility.
Disposals/deleveraging program: Ongoing recycling of lower-yielding, non-core assets funds debt reduction and protects future earnings as hedges roll off.

Risks and flags for dividend stability

Leverage and headroom: LTV at 40.2% and reduced liquidity headroom (£251m vs £532m) heighten sensitivity to market conditions; deleveraging depends on timely disposals at acceptable prices.
Valuation and rates: Outward yield shift led to valuation declines and IFRS losses; interest expense could rise post-FY29 as hedges expire, pressuring coverage if not offset by deleveraging and earnings growth.
Occupancy/vacancy: Occupancy dipped (95.9%) and EPRA vacancy rose to 4.0% (from 1.9%); merits monitoring though demand remains robust.
Regulatory and remediation: New rental rules may add operational complexity; ongoing (modest) fire safety remediation provisions could absorb some cash.
Refinancing: Rothesay facility tranche expiry in July 2026 to be repaid from undrawn lines/sales; execution risk is low per guidance but still a watchpoint.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
15/01/2026	20/02/2026	Final	5.4600p	GBX
21/05/2026	03/07/2026	Interim	2.9400p	GBX

Total (Annual Dividends Per Share): 8.40p

Dividend Yield = Annual Dividends Per Share (8.40p) ÷ Share Price (167p) = 5.03%

Ex Dividend Date	Payment Date	Type	Amount	Currency
21/05/2026	03/07/2026	Interim	2.9400p	GBX
15/01/2026	20/02/2026	Final	5.4600p	GBX
22/05/2025	07/07/2025	Interim	2.85p	GBX
16/01/2025	21/02/2025	Final	5.01p	GBX
23/05/2024	05/07/2024	Interim	2.54p	GBX
28/12/2023	14/02/2024	Final	4.37p	GBX
25/05/2023	03/07/2023	Interim	2.28p	GBX
29/12/2022	14/02/2023	Final	3.89p	GBX
26/05/2022	01/07/2022	Interim	2.08p	GBX
30/12/2021	14/02/2022	Final	3.32p	GBX
27/05/2021	02/07/2021	Interim	1.83p	GBX
24/12/2020	15/02/2021	Final	3.64p	GBX
28/05/2020	03/07/2020	Interim	1.83p	GBX
24/12/2019	10/02/2020	Final	3.46p	GBX
30/05/2019	05/07/2019	Interim	1.73p	GBX
13/12/2018	11/02/2019	Final	3.52p	GBX
24/05/2018	05/07/2018	Interim	1.74p	GBX
28/12/2017	09/02/2018	Final	3.26p	GBX
01/06/2017	30/06/2017	Interim	1.60p	GBX
29/12/2016	10/02/2017	Final	3.05p	GBX
02/06/2016	01/07/2016	Interim	1.45p	GBX
24/12/2015	12/02/2016	Final	2.11p	GBX
04/06/2015	03/07/2015	Interim	0.64p	GBX
29/12/2014	06/02/2015	Final	1.89p	GBX
04/06/2014	04/07/2014	Interim	0.61p	GBX
18/12/2013	07/02/2014	Final	1.46p	GBX
05/06/2013	05/07/2013	Interim	0.58p	GBX

Year	Interim	Final	Currency	Total	Change
2024	2.540	5.010	GBX	7.550	13.530
2023	2.280	4.370	GBX	6.650	11.390
2022	2.080	3.890	GBX	5.970	15.920
2021	1.830	3.320	GBX	5.150	-5.850
2020	1.830	3.640	GBX	5.470	5.390
2019	1.730	3.460	GBX	5.190	-1.330
2018	1.740	3.520	GBX	5.260	8.230
2017	1.600	3.260	GBX	4.860	8.000
2016	1.450	3.050	GBX	4.500	63.630
2015	0.640	2.110	GBX	2.750	10.000
2014	0.610	1.890	GBX	2.500	22.540
2013	0.580	1.460	GBX	2.040

Number of Shares:

Payment	Paid	Amount
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