Supermarket Income REIT (SUPR), listed on the premium segment of the LSE, invests in supermarket property, let to leading UK supermarket operators, on long, RPI-linked leases. The investment objective is to provide an attractive level of income, with the potential for capital growth.
Across all main sectors the market continues to adjust to an increased cost of capital. SUPR’s supermarket assets have the benefit of visible income from long, mostly indexed, leases, a strong occupier covenant and the non-cyclical nature of grocery retailing. Investment volumes in supermarket property have been significantly more resilient than for the wider market.
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Chris McMahon
Investor relations
Michael Perkins
Finance director
Rob Abraham
Managing director
Steven Noble
Chief investment officer
Forecast net debt (£m)
544.3
Forecast gearing ratio (%)
45
% | 1M | 3M | 12M |
---|---|---|---|
Actual | (6.2) | (9.4) | (15.1) |
Relative | (8.3) | (14.5) | (18.1) |
52 week high/low | 88.5p/70.3p |
During H124, rent reviews and recycling of capital into higher yielding assets and tight cost control offset the income foregone following the sale of SUPR’s highly successful investment in the Sainsbury’s Reversion joint venture. H124 DPS of 3.03p was 97% covered by adjusted earnings and the company remains confident in meeting its full year DPS target of 6.06p (+1%) on a fully covered basis. Although the UK grocery sector is generating strong sales growth, supermarket property yields continue to widen in line with the broader property market. June’s increase in portfolio net initial yield to 5.8% from 5.6% was only partially offset by rental growth and like-for-like valuations were 3.2% lower. NAV per share was 88p (FY23: 93p). Positively, SUPR’s strong balance sheet leaves it well-placed to take advantage of the emerging accretive acquisition opportunities.
Y/E Jun | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (p) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 69.7 | 58.2 | 57.4 | 5.9 | 12.3 | 11.3 |
2023A | 93.3 | 79.8 | 57.2 | 4.6 | 15.8 | 10.7 |
2024E | 103.9 | 92.6 | 75.9 | 6.1 | 11.9 | 8.5 |
2025E | 107.5 | 96.0 | 77.1 | 6.2 | 11.7 | 9.7 |