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Grainger FY Profit Rises; Announces Proposed Acquisition Of GRIP REIT

Grainger plc (GRI.L) reported profit before tax - continuing operations - of 100.7 million pounds for the year ended 30 September 2018 compared to 86.3 million pounds, previous year. Earnings per share - continuing operations - was 20.9 pence compared to 17.6 pence. Adjusted earnings were up 26% to 94.0 million pounds.

Fiscal year Group revenue improved to 270.7 million pounds from 264.7 million pounds, a year ago. Net rental income was up 8% to 43.8 million pounds. The Group recorded a 4.0% like for like rental growth across its entire portfolio.

Also, Grainger announced that it has conditionally agreed to acquire the entire share capital and shareholder loans in GRIP REIT plc from its joint venture partner, APG, for 396 million pounds. GRIP is a joint venture between Grainger and APG, currently owned 75.1% by APG and 24.9% by Grainger. GRIP comprises 35 PRS assets with a gross asset value of 696 million pounds. Following the acquisition, Grainger will become the 100% owner of GRIP.

The acquisition will be funded by a 346.7 million pounds rights issue fully underwritten by J.P. Morgan Cazenove and Numis. The Rights Issue will result in the issue of up to 194,748,913 new ordinary shares, representing approximately 47 percent of the existing issued share capital of Grainger and 32 percent of the enlarged issued share capital immediately following completion of the Rights Issue.

The Board of Grainger recommended an increase in the final dividend to 3.52 pence per share, bringing the total for the year to 5.26 pence per share, up 8% on the prior year.

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