Supermarket Income REIT (SUPR) H1 2024 earnings summary

Executive summary

• Net rental income rose 15% to £52.6m for the six months to 31 December 2023, with adjusted EPS steady at 2.9p and a portfolio value of £1.7bn.

• Achieved resilient financial performance with 18% growth in operating profit to £45.0m and 10% increase in annualised passing rent to £104.7m, driven by acquisitions and rental uplifts.

• UK grocery market sales rose 8% in the period, with Tesco and Sainsbury's gaining market share and accounting for 77% of rental income.

• Omnichannel stores remain the core growth platform, with 93% of the portfolio in such assets and strong tenant covenants.

• Maintained 100% rent collection and stable adjusted EPS at 2.9p, with dividend cover at 0.97x.

Financial highlights

• Net rental income increased to £52.6m from £45.9m year-over-year (+15%).

• Adjusted earnings were £36.3m, nearly flat year-over-year, with adjusted EPS at 2.9p.

• EPRA NTA per share declined 5.4% to 88p, reflecting property revaluations.

• Dividend per share held at 3.0p, with a cover of 0.97x.

• Portfolio value decreased 1.1% to £1.675bn, with a like-for-like decline of 3.2%.

Outlook and guidance

• FY24 dividend target set at 6.06p per share.

• Accretive acquisitions pipeline and low leverage provide capacity for future growth.

• Focus remains on omnichannel assets and further sustainability initiatives.

• Expectation of a more positive valuation environment as debt costs fall and competition for assets increases.

• Board remains confident in delivering secure, inflation-linked income and long-term value.