Supermarket Income REIT (SUPR) H2 2023 earnings summary

Executive summary

• Supermarket Income REIT reported strong growth in rental income and portfolio value for the year ended 30 June 2023, with a focus on inflation-linked leases and omnichannel grocery assets.

• The portfolio remains highly diversified, with 55 supermarkets and 93% omnichannel stores, primarily let to Tesco and Sainsbury's.

• Active portfolio management included £430m in asset sales and £399m in acquisitions, targeting higher-yield opportunities.

• Sustainability initiatives advanced, with 20% of the portfolio equipped with solar PV and EV charging, and a fully TCFD-compliant annual report.

Financial highlights

• Net rental income rose 32% year-over-year to £95.2m; adjusted earnings increased 26% to £72.4m.

• Adjusted EPS was 5.8p (down from 5.9p), and dividends paid per share were 6.0p (up from 5.9p).

• EPRA NTA per share declined to 93p from 115p, reflecting property revaluations and acquisition costs.

• EPRA LTV increased to 35% from 22% year-over-year.

• Finance expense rose 164% year-over-year to £34.3m, mainly due to debt restructuring and higher interest rates.

Outlook and guidance

• FY24 dividend target set at 6.06p per share.

• Management targets a 7–10% IRR through the cycle and maintains a 30–40% leverage target.

• Focus remains on inflation-linked income, sustainability, and capital recycling to enhance returns.