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Currency in GBP
Last close As at 09/06/2023
GBP0.82
▲ 0.60 (0.73%)
Market capitalisation
GBP1,026m
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 sectors, UK commercial property values are negatively repricing to increased risk-free yields. Supermarket property is not immune but visible income, from long-leases (for SUPR rents are mostly indexed), a strong occupier covenant and the non-cyclical nature of grocery retailing should mitigate the impacts.
Investment Companies
Director, Financials
Chris McMahon
Investor relations
Haffiz Kala
Finance director
Rob Abraham
Managing director
Steven Noble
Chief investment officer
Forecast net debt (£m)
651.4
Forecast gearing ratio (%)
56
| % | 1M | 3M | 12M |
|---|---|---|---|
| Actual | (5.4) | (6.3) | (37.4) |
| Relative | (3.3) | (2.3) | (36.8) |
| 52 week high/low | 131.0p/77.6p |
End-H123 annualised passing rent increased 36% to £95.5m, reflecting acquisitions and indexed rent uplifts. With acquisitions set to contribute fully in H2 and all debt fixed/hedged, we expect adjusted EPS to accelerate (H1: 2.9p) to fully cover the expected FY23 DPS of 6.0p. With the market adjusting to higher capital costs, the portfolio value reduced by c 13% on a like-for-like basis, as the topped up net initial yield increased from 4.6% to 5.5%. EPRA NTA per share was 92p (end-FY22: 115p). Since end-H123, the sale of SUPR’s highly successful JV interest has completed, generating total gross proceeds of £431m by the end of July. The first tranche (£279m) has been partly used to repay debt and fund the £38m acquisition of an omnichannel store at a net initial yield of 6.0%. With pro-forma LTV set to fall to less than 30% and the company is considering the best use of its capital flexibility, including further accretive acquisitions and share repurchases, in addition to debt reduction.
| Y/E Jun | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (p) | P/E (x) | P/CF (x) |
|---|---|---|---|---|---|---|
| 2021A | 47.9 | 38.7 | 36.8 | 5.6 | 14.7 | 12.6 |
| 2022A | 72.1 | 58.2 | 57.4 | 5.9 | 13.9 | 12.7 |
| 2023E | 96.9 | 82.6 | 74.0 | 6.0 | 13.7 | 11.8 |
| 2024E | 106.1 | 92.5 | 75.8 | 6.1 | 13.5 | 11.4 |
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