Supermarket Income REIT (SUPR) H1 2022 earnings summary

Executive summary

• Achieved strong financial and operational growth, with EPRA NTA per share up 5% to 113p and a 48% Total Shareholder Return since IPO in July 2017.

• Rapid deployment of £372m into high-quality assets, supported by a £200m equity raise, expanding the investment portfolio to £1.6bn.

• Became Premium Segment listed and received an Investment Grade BBB+ credit rating from Fitch.

• Portfolio focused on omnichannel supermarkets, benefiting from resilient grocery demand and inflation-linked leases.

Financial highlights

• Net rental income rose 60% year-over-year to £32.6m for the six months to 31 Dec 2021.

• EPRA earnings increased 109% year-over-year to £26.9m; EPRA earnings per share up 11% to 3.1p.

• Dividend per share was 3.0p, with EPRA dividend cover at 1.13x.

• EPRA NTA per share grew 5% to 113p; portfolio assets reached £1.6bn.

• Profit before tax increased to £68.9m; IFRS EPS up 34% to 7.9p.

Outlook and guidance

• Well positioned for future growth, benefiting from inflationary tailwinds, digital transformation, and secure inflation-linked rental reviews.

• Targeted average leverage of 30-40% through the cycle and a target IRR of 7-10%.

• Potential entry into FTSE 250 and EPRA NAREIT indices in June 2022 following migration to the LSE Premium Segment.

• Expect continued growth in supermarket rents and capital values, supported by strong sector fundamentals.