Grainger has been forced to restate 2006 profits after intervention by the Financial Reporting Review Panel. Financial Times

The residential property group had transferred £43.5m of 'trading property' into a Jersey property unit trust called G:res in November 2005 at which point it was reclassified as 'investment property'.

A rise in value of £23.5m was recognised in the income statement for that year to reflect a gain on revaluation to market value. But the Panel said the assets were originally acquired for the purpose of long-term capital appreciation and rental growth and should have been shown as investment property rather than trading stock. As a result, 2006 profit after tax is cut from £50.5m to £33.5m with net assets reducing by £500,000 to £250.1m.

The restatement flattered Grainger’s results for the year to September 30. Pre-tax profits were £77.5m, a 62% rise on last time’s restated £47.7m. NAV per share rose 23%t to 732p (595p).