Preliminary Results for Year

1

• Preliminary Results for Year
• Ended 30th September 2001
• 6th December 2001

2
Corporate Statement

• Grainger Trust is the UKs largest quoted
  residential property investor, directly owning
  and managing some 5,000 units. Through its joint
  venture in BPT Limited it has exposure to a
  further 11,000 units.
• It also acquires, develops and trades residential
  and commercial property sites.
• Grainger Trusts tenanted residential and
  development activities are strongly cash
  generative, producing operating cash flows of
  some 80m pa.

3
Preliminary Results Highlights

• Pre-tax profits, before exceptional item and
  share of JV Results up to 22.2m 38
• Net Asset Value per share of 12.22 24
• NNNAV per share of 9.00 21
• Final dividend of 9.68p per share
• making 12.33p for year 15
• Market Value of all properties 428m
• VP value of tenanted residential 389m but fewer
  units
• Development trading profits of 9.6m 66
• Investment property sales of 40m
• JV acquisition of BPT cost 54m
• Gearing down from 73 to conservative 67

4
Summary Profit and Loss Account
2001 including JV m 124.7 13.2 28.0 (3.7) 37.5
6.2 (24.8) 18.9 (3.5) 15.4
2000 Total m 68.2 15.7 18.7 (3.0) 31.4 (15.3)
16.1 - 16.1
2001 excluding JV m 99.3 13.2 27.8 (3.7) 37.3
(15.1) 22.2 (3.5) 18.7
Turnover Net Rentals Trading/Capital
Profits Less Overheads Net of Other
Income Operating income Share of JV Op
Profits Less Net Interest Profit before Tax Net
Exceptional Interest Profit before tax (post
exceptional)
5
Summary Market Value Balance Sheet
30 Sept 2001 m
30 Sept 2000 m
Properties- Tenanted Residential Development and
Trading Investment Properties Total
Properties Investments Cash Total Assets Formal
Debt Net Current Liabilities Deferred Total
Liabilities Equity Brought Forward Retained
Earnings Valuation Surplus Buy Backs Total
Equity Carried Forward Total Liabilities Equity
288 113 27 428 92 23 543 (224) (14) (4) (242)
(243) (9) (49) - (301) (543)
259 115 64 438 1 8 447 (186) (13) (5) (204)
(179) (8) (60) 4 (243) (447)
6
Reconciliation NAV Movements
Transaction/ Valuation Movements In Year m
Year Start m
Per Share p
Year End m
Per Share p
Share Capital Reserves/Retained Earnings - GT -
BPT JV Investment Property Surplus Published
Accounts Surplus Over Cost TR - GT -
BPT JV Dev. Total Surplus on Cost Goodwill re
Joint Venture Total NAV No. of Shares
78 11 89 107 47 154 243
3.17 0.44 3.61 4.34 1.90 6.24 9.85 24,6
55
12 (2) (1) 9 18 9 (5) 22 27 58
3.58 0.41 3.99 5.43 1.70 7.13 1.10 12.22
24,680
88 10 98 134 42 176 27 301
7
NNNAV
2001
2000
Per Share p
Per Share p
m 301.5 2.2 2.3 0.7 2.0 7.2 72.2 222.1
m 242.7 5.7 2.5 0.2 (2.0) 6.4 53.7 182.6
Net Asset Value Less FRS 13 Adjustment- Quoted
Debenture Institutional Debt Fixed Rate
Debt Derivatives (including share of
BPIL) Total Less Contingent Tax NNNAV
12.22 0.09 0.10 0.03 0.07 0.29 2.93 9.00
9.85 0.23 0.10 0.01 (0.08) 0.26 2.18 7.41
8
Cashflow
2001 m
2000 m
Net Profit Before Tax JV Loss Before Tax Cost of
Property Sold- Tenanted Residential
Development Net Investment Operational
Cashflow Financing Transactions Net Loans
Share Buy Backs Tax Dividends Available for
Investment Tenanted Residential Development Invest
ment in JV Spend on Properties and JV Cash
Movement Cash Brought Forward Cash Carried
Forward
16 13 9 18 56 31 (4)
(10) 73 (40) (43) - (83) (10) 18 8
15 3 17 29 38 102 38 -
(11) 129 (28) (32) (54) (114) 15 8 23
9
Debt/Gearing
2001
2000
Fixed Rate
Variable/Fixed Under One Year
Fixed Rate
Variable/Fixed Under One Year
55m (10.3)
69m (6.1)
64m (10.3)
65m (7.3)
53m (6.5)
47m (6.2)
33m (7.1)
24m (7.0)
Hedged Loans
Fixed Over One Year
Hedged Loans
Fixed Over One Year
7.2
8.2
Blended Interest Rate
224m
186m
Gross Debt
23m
8m
Less Cash
201m
178m
Net Debt
301m
243m
Market Value Adjusted Equity
67
73
Gearing
10
Tenanted Residential - Overview

• Stock down from 5,250 to 4,946 at year end now
  5,261
• VP value up from 351m to 389m av 75,000
• Investment value up from 259m to 288m
• Lower priced tenanted residential sold - 214
  units
• House price growth continuing feature
• London SE 8 (2000 20)
• South/SW 21 (2000 15)
• Midlands N 5 (2000 0)
• Acquisitions of 30m of tenanted residential
  during year regulated average 70 VP
• Since year end 42m of acquisitions including
  large Midlands portfolio 350 units

11
Tenanted Residential Overview

• Operating contribution up 8 to 22.2m
• Trading profits increased to 16.5m from 13.6m
• Net rents down to 7.7m from 8.7m

12
Tenanted Residential Profit And Loss Account
2000 m
2001 m
Gross Sales (incl. Capital Sales 2000) Gross
Rentals Total Trading Trading/Capital
Profits Net Rentals Operational Result Less
Overheads Net Of Other Income Operating
Contribution No. of Sales- Normal Other Aver
age Selling Price Per Normal Unit
K Trading/Capital Profit
36.3 15.4 51.7 16.5 7.7 24.2 (2.0) 22.2 488
247 735 60 45
30.6 14.9 45.5 13.8 8.7 22.5 (2.0) 20.5 502
48 550 55 45
13
Tenanted Residential Portfolio Total Return
Return on Valuation b/fwd
Net Rents m
Trading m
Total PLAC m
Valuation Uplift m
Total Return m
Valuation b/fwd m
00 Comparable
London/SE South/South West Midlands/North
3.2 1.1 3.4 7.7
9.9 2.0 4.6 16.5
13.1 3.1 8.0 24.2
10.4 4.9 2.7 18.0
23.5 8.0 10.7 42.2
167 25 68 260
37 28 12 29
14 32 16 16
14
Tenanted Residential Stock Analysis at 30 Sept
2001
Investment Value
No. of residential units
Costm
Av. VP m
Market Rent m
Current Rent m
Total VP m
VP
Total m
Regulated Assured Periodic Assured Shorthold Life
Tenancies Vacant Other Interests 2000
Comparatives
3,726 229 472 133 386 4,946 - 4,946 5,250
113.2 6.6 16.1 5.4 11.1 152.4 10.7 163.1 152.3
80 66 51 96 61 75 - - -
297.1 15.1 24.1 12.8 23.4 372.5 16.0 388.5 351.9
73 73 84 56 90 73 - - 73
214.0 11.0 20.2 7.1 21.1 273.4 14.3 287.7 258.9
15.9 0.9 1.8 0.1 2.3 21.0 0.2 21.2 21.1
11.5 0.8 1.8 0.1 - 14.2 0.2 14.4 15.5

• Number of units fell because of sales of low
  value industrial housing.
• Average VP value per unit increased to 75K from
  65K.
• Acquisition since the year end of 350 unit
  portfolio from the Ideal Benefit Society for
  approx. 30m.

15
Development and Trading Valuation
Investment Value
2001
2000
Residential Land Development
Investment Portfolio
Residential Land Development
Investment Portfolio
37.5m
27.0m
45.9m
64.5m
Commercial Trading
18.4m
24.5m
Commercial Development
41.3m
Commercial Development
15.9m
17.6m
Residential Development
26.6m
Commercial Trading
Residential Development
140.1m
179.1m
Total Trading
93.6m
124.1m
Cost
16
Development and Trading Overview

• Operating contribution inc net rentals up 39 to
  15.1m
• Investment property sales resulted in net rents
  down 22 to 5.5m
• Property trading profits increased 66 to 9.6m
• Contribution excl investment property sales
  to gross operating cashflow was 43m
• Investment property sales of 40m - 2m profit
• D T portfolio y/e valuation of 140m - rent
  roll of 5m pa

17
Development Thurrock

• 157,000 sq ft 4-unit award winning JV industrial
  scheme
• 3m sale of 30,000 sq ft unit
• Further 2m sale of 21,000 sq ft unit since y/e
• Negotiations for sale of 65,000 sq ft unit well
  advanced

18
Development Landmark Place, Slough

• 190,000 sq ft jv mixed use development underway
• Hotel sold
• Leisure unit pre-let
• Early interest in 67,000 sq ft offices
• 18,000 sq ft divisible floorplates
• Parking for 188 cars
• Close to station
• Completion mid 2003

19
Development Residential

• 21 flats at Redcliffe Backs, Bristol sold
• Eaton Square Kensington properties sold prior
  to development for 14m
• Since year end acquired Clapham site for 27m
  residential warehouse development
• Pimlico Bus Station site
• 79 private flat element
• Construction start expected early 2002

20
Development Commercial

• 80,000 sq ft Townsend House, Victoria mixed use
  scheme awaiting public inquiry outcome
• 5 acre West Waterlooville leisure site may be
  deferred because of MDA
• Kennel Farm
• Local centre construction to start. Retail,
  crèche 24 flats
• 100,000 sq ft B1 Park to be deferred

21
Residential Land

• Kennel Farm
• 15 acres sold in year
• 29 acres contracted 2002 - 2004
• Further 11 acres to sell
• West Waterlooville
• 648 acre site optioned
• 2000 units allocated in local plan
• E. Northumberland Coastal Plain
• Construction to start on 27 houses
• Planning for 60 houses
• Application for further 78 houses

22
BPT

• 50 interest acquired in May 2001 for total
  investment of 54m
• Good progress in rationalising portfolios through
  sales of non-regulated assets
• Total sales to end November of 97m (including
  23m sale of 22 Mountview stake)
• Negotiations advanced for sale of life tenancy
  portfolio
• Possible institutional funding for new build AST
  portfolio
• BPT debt refinancing completed
• Post tax loss of 2.0m included in Graingers
  results for the year

23
Conclusions

• Highly cash generative business
• 30m annual tenanted residential sales
• 30m contracted Land Development sales
• Strong cashflow enables Grainger to invest in
  more entrepreneurial higher yielding developments
• BPT investment provides significant future
  opportunities - now market leader in quoted
  tenanted residential sector
• Future focus on core TR business while continuing
  to develop expertise in trading development
  division
• Grainger is capable of material outperformance
• Dividend growth of 15 pa for last 3 years
• Share price growth compound 43 pa since Sept
  98

24

• Preliminary Results for Year
• Ended 30th September 2001
• 6th December 2001

25
Debt/Gearing
2001
26
Debt/Gearing
2000
27
Summary Profit and Loss Account
2001 Total 2000 incl.
JV Total m m Turnover 124.7
68.2 Net Rentals 13.1 15.7 Trading/Capital
Profits 28.0 18.7 Less Overheads Net of other
Income (3.6) (3.0) Operating
income 37.5 31.4 Share of JV Op Profits
6.2 - Less Net Interest (24.8) (15.3) Pr
ofit before Tax 18.9 16.1 Net Except
Interest (3.5) - Profit before tax (post
exceptionals) 15.4 16.1
2001 Total excl JV m 99.3 13.1 27.8 - (3.6) 37.
3 - (15.1) 22.2 (3.5) 18.7
2001 Total incl JV m 124.7 13.1 28.0 - (3.6) 37.
5 6.2 (24.8) 18.9 - 15.4
2000 Total m 68.2 15.7 18.7 - (3.0) 31.4 - (15.3
) 16.1 - 16.1
Turnover Net Rentals Trading/Capital
Profits Less Overheads Net of other
Income Operating income Share of JV Op
Profits Less Net Interest Profit before Tax Net
Except Interest Profit before tax (post
exceptionals)
28
Debt/Gearing
2000
29
Debt/Gearing
2000