16 May 2024

Grainger plc

Half year financial results

for the six months ended 31 March 2024

 A platform delivering compounding growth

§ Net rental income +11%

§ Dividend per share +11%

§ Like-for-like PRS rental growth +8.1%

§ Occupancy 97.7%

§ Underlying property values stable

§ EPRA NTA robust at 294pps

Grainger plc, the UK's largest listed residential landlord and leader in the build-to-rent sector, today announces a strong performance for the six months ended 31 March 2024. Grainger's £3.4bn operational residential portfolio totals c.11,000 homes with a further c.5,000 homes in our £1.5bn build-to-rent investment pipeline.

Helen Gordon, Chief Executive, said:

"Grainger has delivered another strong operating performance over the past six months. Strong like-for-like rental growth and expansion from our successful pipeline delivery have driven further growth in net rental income and earnings and enable us to increase our dividend for the 17^th consecutive time since our strategy reset began in 2016. Our portfolio occupancy remains high at 97.7% with customer affordability healthy, customer satisfaction and retention high, and rent arrears low.  

"Despite some further yield expansion, strong rental growth has offset this with underlying property values broadly flat, demonstrating the performance of our platform and resilience of our asset class.

"Our sector's positive market fundamentals and our strategic positioning mean that we expect rental growth to remain above the historical long-term average for the remainder of this year with scope for it to continue at elevated levels into 2025.

"Our strategic transformation to become the leading PRS build-to-rent player in the UK continues unabated with 80% of our portfolio now PRS assets and will culminate in our conversion to a REIT in October next year, enhancing returns for shareholders further.

"As we deliver our secured pipeline, benefitting from significant operational leverage as our portfolio grows and our cost base remains stable, we expect to deliver a sustainable Total Accounting Return of 8%, which we believe is a very attractive return on a risk-adjusted basis."

Key strategic highlights

§ We have delivered c.11% growth in net rental income (NRI) over the last 12 months, the 5^th consecutive reporting period that we have announced double-digit growth

§ Our £0.5bn committed pipeline along with our recently completed schemes when stabilised will deliver a further £41m of additional NRI growth, with opportunities from our c.£1.0bn secured and planning and legals pipeline delivering further NRI growth

§ Delivering significant EBITDA margin accretion, from 53% in FY23 to over 60% over the next 5 years, through the delivery of our pipeline and leveraging our efficient, scalable and market-leading platform

§ EPRA Earnings to grow to £55m by FY26

§ Strong track record of transacting successfully, supporting growth, with £1.7bn of disposals and £2.5bn of new investment since 2016 when we set out our strategy

§ We remain on track for REIT conversion for October 2025 (FY26)

Key financial highlights

§ 11% growth in Net Rental Income¹ to £53.2m (HY23: £48.0m), up from £18.0m at HY16 at the beginning of our strategic restart

§ Strong Adjusted Earnings² of £44.4m reflecting the strategic divestment of our regulated tenancy portfolio, realising significant capital to re-invest into Build to Rent, PRS assets (HY23: £47.1m)

§ Interim dividend³ increased 11% to 2.54p per share (HY23: 2.28pps)

§ 12% growth in EPRA Earnings to £24.5m (HY23: £21.9m)

§ 8.1% like-for-like rental growth⁴ in H1 across our PRS portfolio (FY23: 8.0%), with new lets at 7.7% and renewals at 8.3%

o  Regulated Tenancy Portfolio: 7.1% like-for-like rental growth (FY23: 5.9%)

o  Total Portfolio: 8.0% like-for-like rental growth (FY23: 7.7%)

§ High occupancy at 97.7% in our PRS portfolio (FY23: 98.6%)⁵

§ Stable underlying valuations of (0.3)%; down (1.9)% taking account of changes in tax treatment assumptions (multiple dwellings relief or 'MDR')⁶ which is due to be enacted in the Finance Bill on 1 June

§ EPRA Net Tangible Assets (EPRA NTA) of 294pps (FY23: 305pps; HY23: 310pps), reflecting an (8)p impact from tax treatment changes (MDR)

§ IFRS loss before tax of £31.2m reflecting the £58.8m impact from MDR tax treatment changes (HY23: IFRS profit before tax of £5.7m)

§ Accelerated disposals programme delivering strong sales proceeds of £71m (HY23: £74.6m) providing significant capital to recycle and support our continued growth

§ Delivering c.1,000 new, purpose-built, energy-efficient, mid-market rental homes this year in our existing cluster locations of Birmingham, Bristol and North London, including the successful delivery and launch of 307 new homes at The Copper Works in Cardiff in the first half of this year

Key financial metrics

Our £1.5bn Build-to-Rent Pipeline

Excellent outlook

The outlook for Grainger is excellent. Our market leadership in the growing build-to-rent sector with the UK's largest portfolio, largest pipeline and best-in-class operating platform, powered by our proprietary CONNECT technology platform, is delivering compounding growth for shareholders over the near term, whilst providing a brilliant service and rental experience to our growing number of customers.

In light of the upcoming General Election later this year, our extensive dialogue with all main political parties provides us significant comfort that the risk of regulation to our responsible business model is minimal.

Our strong balance sheet with long-term fixed debt costs, our successful accelerated disposals programme to fund our continued growth, and a fragmented but maturing BTR market is resulting in an exciting time in the market with a growing number of potential opportunities that we are seeing.

¹ Refer to Note 5 for net rental income calculation.

² Refer to Note 2 for IFRS profit before tax and adjusted earnings reconciliation.

³ Dividend - The dividend of 2.54p per share (gross) amounting to £18.8m will be paid on 5 July 2024 to shareholders on the register at the close of business on 24 May 2024. Shareholders will again be offered the option to participate in a dividend re-investment plan and the last day for election is 14 June 2024 - refer also to Note 11.

⁴ Rental growth is the average increase in rent charged across our portfolio on a like-for-like basis.

⁵ 95% Occupancy is considered 'stabilised', whilst Grainger considers 97% 'fully occupied', taking account of natural churn.

⁶ In the Spring Budget, the Government announced the abolition of Multiple Dwellings Relief (MDR), which provides Stamp Duty Land Tax relief when buying multiple properties. The impact of increased purchaser costs have been reflected in our HY24 valuations, resulting in a £58.8m (1.6%) reduction in value of investment properties.

⁷ Total Property Return (TPR) represents the change in gross asset value, net of capital expenditure incurred, plus net income, expressed as a percentage of gross asset value.

Future reporting dates

§ Trading Update - September 2024

§ Full year results - 21 November 2024

Half year results presentation

Grainger plc will be holding a presentation of the results at 9:00am (UK time) today, 16 May 2024, which can be accessed via webcast and a telephone dial-in facility (details below), which will be followed by a live Q&A session for sell side analysts and shareholders.

Webcast details:

To view the webcast, please go to the following URL link. Registration is required.

https://brrmedia.news/GRI_HY24

The webcast will be available for six months from the date of the presentation.

Conference call details:

Call: +44 (0) 33 0551 0200

Quote "Grainger Half Year Results" when prompted by the operator

*Please note that Live Questions can be submitted by analysts and investors via the webcast, but not via the conference call facility.

Presentation material:

A copy of the presentation slides will also be available to download on Grainger's website (http://corporate.graingerplc.co.uk/) from 08:30am (UK time).

For further information, please contact:

Investor relations

Kurt Mueller, Grainger plc:                                                          +44 (0) 20 7940 9500

Media

Ginny Pulbrook / Geoffrey Pelham-Lane, Camarco:                     +44 (0) 20 3757 4992 / 4985                              

Forward-looking statements disclaimer

This publication contains certain forward-looking statements. Any statement in this publication that is not a statement of historical fact including, without limitation, those regarding Grainger plc's future financial condition, business, operations, financial performance and other future events or developments involving Grainger, is a forward-looking statement.  Such statements may, but not always, be identified by words such as 'expect', 'estimate', 'project', 'anticipate', 'believe', 'should', 'intend', 'plan', 'could', 'probability', 'risk', 'target', 'goal', 'objective', 'may', 'endeavour', 'outlook', 'optimistic', 'prospects' and similar expressions or variations on these expressions. By their nature, forward-looking statements involve inherent risks, assumptions and uncertainties as they relate to events which occur in the future and depend on circumstances which may or may not occur and go beyond Grainger's ability to control. Actual outcomes or results may differ materially from the outcomes or results expressed or implied by these forward-looking statements. Factors which may give rise to such differences include (but are not limited to) changing economic, financial, business, regulatory, legal, political, industry and market trends, house prices, competition, natural disasters, terrorism or other social, political or market conditions.

Grainger's principal risks are described in more detail in its Annual Report and Accounts, set out in the Risk Management report on pages 62-67 of the 2023 Annual Report and Accounts, and there has been no change.

A number of risks faced by the Group are not directly within our control such as the wider economic and political environment.

In line with our risk management approach detailed in our Annual Report and Accounts, the key risks to the business are under regular review by the Board and management, applying Grainger's risk management framework.  It is currently considered that the principal risks previously reported remain our principal risks. The risks to Grainger will continue to be monitored closely as well as the potential controls and mitigants that may be applied.

These risks and other factors could adversely affect the outcome and financial effects of the events specified in this publication. The forward-looking statements reflect knowledge and information available at the date they are made and Grainger plc does not intend to update on the forward-looking statements contained in this publication.

This publication is for information purposes only and no reliance may be placed upon it. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained in this publication. Past performance of securities in Grainger plc cannot be relied upon as a guide to the future performance of such securities.

This publication does not constitute an offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of Grainger plc. 

Chief Executive's review

A platform delivering compounding growth

Key strategic highlights

§ We have delivered c.11% growth in net rental income (NRI) over the last 12 months, the 5^th consecutive reporting period that we have announced double-digit growth

§ Our £0.5bn committed pipeline along with recently completed schemes when stabilised will deliver a further £41m of additional NRI growth, with opportunities from our c.£1.0bn secured and planning and legals pipeline delivering further NRI growth

§ Delivering significant EBITDA margin accretion, from 53% in FY23 to over 60% over the next 5 years through the successful delivery of our pipeline and leveraging our efficient, scalable and market-leading platform

§ EPRA Earnings to grow to £55m by FY26

§ Strong track record of transacting successfully, supporting growth, with £1.7bn of disposals and £2.5bn of new investment since 2016 when we set out our strategy

§ We remain on track for REIT conversion for October 2025 (FY26)

§ Sustainable total accounting return target of 8%, underpinned by a positive rental growth outlook and before any yield movement, an attractive total return on a risk-adjusted basis due to the low volatility and low risk nature of our asset class

Strong Operational Performance

Our market-leading, scalable and efficient platform is delivering compounding growth, in both earnings and dividend, for years to come.

Net rental income has increased once again in the period, up 11%, as we continue to deliver our pipeline of brilliant new homes in our target locations across England and Wales.

Our leading operating platform, designed for growth to drive efficiencies and provide great customer service, continues to deliver value for both shareholders and our growing number of customers. The benefits of our clustering strategy continue to drive operational efficiencies with gross to net improving to 25.3%.

Continuing from last year's exceptionally strong rental growth, like-for-like rental growth in our PRS portfolio continues to remain at elevated levels at 8.1%, ahead of our prior expectations. Despite this, customer affordability remains healthy at 28% demonstrating both the important alignment to wage growth amongst our customer base but also the sustainability of elevated rental growth going forward that we can generate from our portfolio.

Demand for our high quality, mid-market homes remains extremely strong, with the portfolio fully occupied at 97.7% and lease up of our new schemes well ahead of underwriting.

Our accelerated disposals programme is performing well, delivering £71m of proceeds over the period as we divest from our regulated tenancy portfolio, providing a reliable source of funding for us to deliver our pipeline and continue to grow.

Satisfaction amongst our customers remains high, as does customer retention at 62.9%.

Our strong growth in net rental income and earnings ensures that we can once again increase our dividend, which is up 11% to 2.54p per share.

Resilience

The resilience of our asset class continues to prove true, with underlying property values broadly stable over the period.

Following the UK Government's announcement to change the tax treatment of multiple dwellings ('MDR') which comes into effect on 1 June, our independent valuers at CBRE have applied the impact to our March valuations, resulting in a one-off valuation reduction of £59m. Reflecting this impact, EPRA NTA is down 4% to 294p per share.

We are a highly cash generative business. Each year, we expect to deliver c.£200m of operating cashflow supported by our disposals programme of non-core assets, underpinning our continued growth. In total we have over c.£1.1bn of non-core assets, including our regulated tenancy portfolio. Our market is highly liquid with a wide, diverse range of purchasers. Each year some 1 million transactions occur in the UK residential market, representing c.£260bn transacted.

Our balance sheet is strong. Our debt costs are fixed in the mid-3% over the next five years.

Compounding Growth

Our scalable platform continues to deliver compounding growth in both earnings and dividend from our pipeline as our portfolio grows, and as we continue to generate strong like-for-like rental growth. As we grow, we continue to improve operational efficiencies both in operating margins and EBITDA margins as we leverage off of our scalable cost base.

Net rental income is set to increase by £41m from the delivery of our committed pipeline and remaining lease up of recently completed schemes.

In the near term, we expect EPRA Earnings to grow to £55m by FY26.

Strategically Repositioned as a Build-to-Rent Market Leader

Since 2016, we have completely repositioned the business. We have disposed of £1.7bn of assets and invested £2.5bn in new Build-to-Rent (BTR) assets, moving from c.23% of our portfolio as PRS/BTR assets to 80% today.

A significant milestone of this strategic transition will be our conversion to a REIT in October 2025 for our FY26 financial year, further enhancing total returns.

The great progress we are making as a business, and the quality of our products and services, is reinforced in the recognition we receive, with Grainger and our schemes announced as finalists for 27 industry awards so far this year.

Leading operating platform

We remain steadfast in our commitment to delivering a leading customer experience and to that end we have appointed a new repairs and maintenance partner for a large part of our portfolio, a move that will drive further improvement in what is a key component of our customer journey.

Data and AI opportunities

Our market leading platform provides us significant opportunities to harness our data and utilise AI. This will deliver further value enhancement, greater efficiencies and improved customer service.

We are in the early stages of exploring the application of AI, including machine learning, Generative AI, predictive modelling and natural language processing, across the business. Early examples include being able to predict leasing behaviours amongst customers allowing us to direct resource appropriately, modelling new technologies to support our Net Zero transition and enhancing our customers' experience with regard to Repairs and Maintenance bookings.

Exciting market opportunities and excellent outlook

The BTR market continues to grow and mature with a growing number of existing, stabilised BTR assets coming to market, presenting an expanding route for growth for Grainger. There are a large number of BTR investors, but many have sub-scale portfolios, with the average BTR portfolio only 525 homes, likely leading to consolidation opportunities, which we are tracking closely.

In the meantime, we will continue to deliver and expand our already significant £1.5bn pipeline of BTR developments, driving significant earnings growth.  

The market fundamentals that underpin our investment case remain as strong as ever. Our growth trajectory remains on track with a high degree of certainty. In particular we see the regulatory outlook for our business as low risk despite the upcoming General Election.

We remain wholly committed to providing great customer service and delivering high quality homes across England and Wales.

Helen Gordon

Chief Executive

15 May 2024

Financial review

The first six months of FY24 saw a continuation of our excellent performance as a business. Our homes continue to be in high demand with strong occupancy levels at 97.7% and PRS like-for-like rental growth continuing to be very strong at 8.1%. The strong occupational market combined with continuing delivery of new pipeline schemes has resulted in a significant increase in net rents of 11%. The operating leverage in our business model, which is built for scale, means this revenue growth results in even higher earnings growth with EPRA earnings up 12%.

Valuations have once again proved resilient in the period down 0.3% before the impact of MDR removal. There was a continuation of the theme of rental growth (ERV growth 3.7%) offsetting outward yield shift (18bps). The cumulative yield shift over the last 18 months has been 60bps but this has only resulted in a valuation decline of 2.9% given the offset from strong rental growth. It is this index linked nature of our income that underpins the resilience of our portfolio.

Our balance sheet remains in good shape with strong liquidity. Our committed pipeline is fully funded and fully hedged, giving us minimal exposure to interest rate rises for five years. We increased our interim dividend to 2.54p on a per share basis (HY23: 2.28p), up 11% as we continue to deliver strong, sustainable dividend growth.

With great visibility on net rental income growth to be delivered from our committed pipeline, we see strong near-term earnings growth with an upgraded EPRA earnings target of £55m by FY26. Beyond this, we will continue to deliver strong compounding earnings growth for years to come.

Highlights

Income statement

Adjusted earnings decreased by 6% to £44.4m (HY23: £47.1m) with the strong £5.2m increase in net rental income offset by lower profits from sales as we continue to divest from our regulated tenancy portfolio and focus on growing recurring net rental income. EPRA earnings, which is an increasingly important metric for our business, continued to deliver strong growth and was up 12% to £24.5m (HY23: £21.9m).

Rental income

Net rental income increased by 11% to £53.2m (HY23: £48.0m), a continuation of the elevated growth levels of recent years. The £5.2m increase was driven by continued high occupational demand for our homes resulting in both strong lettings of new launches and excellent rental growth.

Overall like-for-like rental growth accelerated to +8.0%, with rental growth in our PRS portfolio continuing to deliver healthy growth at +8.1% (HY23: +6.9%), with rental growth on renewals of +8.3%, and +7.7% on new lets. Our regulated tenancy portfolio also delivered strong rental growth at +7.1% (HY23: +5.8%). Gross to net for our stabilised portfolio improved to 25.3% (FY23: 25.5%) as we start to deliver the efficiency benefits of our scale and clustering model.

Sales

Our accelerated disposals programme continued to be resilient throughout the period with overall sales revenue of £71.1m in line with the prior period (HY23: £74.6m). Sales profits were lower at £19.9m (HY23: £25.2m) as expected, reflecting a smaller regulated tenancy portfolio from which sales profits are generated with higher levels of PRS recycling which have significantly lower profit margins.

Residential sales

Vacant sales delivered £10.6m of profit (HY23: £13.2m). The 20% reduction in vacant property sales profit in the period reflects the reducing portfolio size of our regulated tenancy portfolio as part of our strategic divestment and recycling capital into higher yielding build-to-rent PRS assets. Vacancy rates within our regulated tenancy portfolio, driving sales, were 6.8% (HY23: 8.5%) with margins higher than in the prior year. Pricing achieved remained robust with sales values -0.2% of previous vacant possession values demonstrating the resilience of these assets and their ability to generate reliable cashflow.

Sales of tenanted and other properties delivered £8.4m of profit (HY23: £8.5m) from £49.2m of revenue (HY23: £29.1m) as we sold a higher proportion of PRS assets which have significantly lower margins than tenanted regulated tenancy sales.

Development profits in the period were £0.9m as we continue to work through sales of our remaining legacy land portfolio.

Sales

Overheads

We continue to drive operational leverage, with overheads increasing by only 5% in the period to £16.2m (HY23: £15.4m) driven by wage inflation, compared to 11% growth in recurring net rental income. Our best-in-class operating platform is set to deliver significant earnings accretion through continued operational leverage in the coming years. 

Balance sheet

Maintaining a strong balance sheet from which to execute our growth strategy remains an absolute priority, and we are in good shape. Our LTV is 39.1% (FY23: 36.8%) and liquidity is strong with cash and available facilities of £433m. Our committed pipeline is fully funded and our debt costs are fully hedged, meaning we have minimal exposure to potential interest rate rises.

EPRA NTA remained robust, decreasing by 4% from the year end to 294p per share (FY23: 305p per share) reflecting the impact of the removal of multiple dwellings relief (MDR) equating to 8p per share. Excluding this one-off impact, NTA was only down 1%. The 4p contribution from EPRA earnings was offset by the payment of our final dividend (4)p. EPRA NTA excludes the value of our reversionary surplus of £177m or 24p per share (FY23: £213m).

Property portfolio valuations

Our portfolio values proved resilient with a decline of only 0.3% (HY23: (1.3)%) over the six-month period prior to the (8)p impact from the withdrawal of multiple dwellings relief.

Our PRS portfolio saw strong ERV growth of 3.7% which offset c.18bps outward yield movement in the period. Our regional PRS portfolio outperformed London marginally with c.15bps outward yield movement compared with c.25bps in London. The regulated portfolio again proved its resilience with a 0.8% increase in the six month period.

During the period the removal of multiple dwellings relief in the UK Government's Budget resulted in an increase in the average stamp duty assumed in our valuation from 2.8% to 5.0% which had a one-off impact of £59m on valuation.

¹ Excluding CHARM and Vesta.

Financing and capital structure

Net debt increased to £1,497m (FY23: £1,416m) in line with plan as we invested £122m into our pipeline which was partly offset by £71m of sales in the period. Going forward we expect net debt to be broadly flat with sales offsetting our pipeline capex.

LTV now stands at 39.1% (FY23: 36.8%) with our average cost of debt remaining relatively flat compared to the full year at 3.1% (FY23: 3.3%). We have an average debt maturity of over five years including extension options and refinancing risk is minimal with no material refinancing required until 2028. With our debt costs fixed in the mid 3% for the next five years, our balance sheet is in good shape.

Summary and outlook

The resilient growth that our business delivers was once again evident in the period. Strong demand for our product combined with the delivery of new pipeline schemes drove growth in our net rental income. With the strong operational leverage in our business model this drives even larger growth in our EPRA earnings which are set to grow strongly delivering compounding growth for many years to come. With our balance sheet in good shape and the strong operational cashflow that our business creates we are well placed to take advantage of any opportunities to accelerate growth further.

Rob Hudson

Chief Financial Officer

15 May 2024

Responsibility statement of the directors in respect of the half-yearly financial report

We confirm that to the best of our knowledge:

§ the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK;

§ the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

Helen Gordon                                                                                                   Rob Hudson

Chief Executive Officer                                                              Chief Financial Officer

15 May 2024                                                                             15 May 2024

Independent Review Report to Grainger plc

Conclusion 

We have been engaged by Grainger plc ("the Group") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2024 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Other Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed  Consolidated Statement of Cash Flows and the related explanatory notes. 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2024 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").   

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the UK.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.  

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention that causes us to believe that the directors have inappropriately adopted the going concern basis of accounting, or that the directors have identified material uncertainties relating to going concern that have not been appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the Group to cease to continue as a going concern, and the above conclusions are not a guarantee that the Group will continue in operation.

Directors' responsibilities 

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA. 

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with UK-adopted international accounting standards. 

The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted for use in the UK.

In preparing the condensed set of financial statements, the directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Our responsibility 

Our responsibility is to express to the Group a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.  Our conclusion, including our conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion section of this report.

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the Group in accordance with the terms of our engagement to assist the Group in meeting the requirements of the DTR of the UK FCA.  Our review has been undertaken so that we might state to the Group those matters we are required to state to it in this report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Group for our review work, for this report, or for the conclusions we have reached. 

Craig Steven-Jennings

for and on behalf of KPMG LLP

Chartered Accountants 

15 Canada Square

Canary Wharf

London

E145GL

15 May 2024