Supermarket Income REIT gives upbeat outlook as full-year profits rise

Grocery store investor Supermarket Income REIT hailed a resilient performance during its most recent financial year, growing rental income and profits despite ongoing macro challenges, as it delivered an optimistic outlook for the year ahead.

Supermarket Income REIT, who generates 75% of its rental income from Tesco and Sainsbury's alone, owns a portfolio of 73 stores including 17 Carrefour stores in France.

The company, which achieved 100% occupancy and 100% rent collection, predicted strong grocery market growth across the UK and France over 2024, where industry sales are forecast to grow by 5.8% and 2.1% respectively.

Annualised passing rents increased by 12% over the 12 months to 30 June to £113.1m, reflecting a 4% average like-for-like rental uplift and the £135.8m of accretive acquisitions made during the year.

Adjusted earnings per share were up 4% at 6.1p, while the company lifted its dividend to 6.1p, just 1% higher than last year.

"The company's operational performance has been resilient with 100% occupancy and 100% rent collection despite the broader market and macro-economic challenges of the past years," said chair Nick Hewson.

"Looking ahead, we remain optimistic that the improving interest rate environment should provide positive tailwinds for the company."