Supermarket Income reports solid growth on expanded portfolio

The FTSE 250 real estate investment trust said it had achieved a 48% total shareholder return since its initial public offering in 2017, making for a 9.7% annualised return.

Its EPRA net tangible assets per share increased by 7p in the 12 months ended 30 June to 115p, or a 6% increase.

The company said its direct portfolio was independently valued at £1.57bn, increasing by £423.2m in the year, with a net initial yield of 4.6%.

Its portfolio had a weighted average unexpired lease term of 15 years, as annualised passing rent increased by 34% to £77.6m, while 81% of leases were inflation-linked and the firm recorded rental growth of 3.7% on a like-for-like basis.

Supermarket Income said its net loan-to-value ratio stood at 19% as at 30 June, with 100% of total rent being collected during the year.

The board reported further portfolio growth in the year, through the deployment of £506.7m of equity raised through two upsized and oversubscribed issues of new shares.

That led to admission to the Official List of the FCA and to the premium segment of the London Stock Exchange’s main market, and inclusion in the FTSE 250 and FTSE EPRA/NAREIT Global Real Estate Index Series.

The firm acquired 12 supermarkets for a total price of £381m, excluding acquisition costs, at a blended net initial yield of 4.5% and blended weighted average unexpired lease term of 19 years.

It said the value of its investment in the Sainsbury's reversion portfolio increased by £46.8m to £177.1m, primarily due the exercise of purchase options by Sainsbury's.

Supermarket Income declared a total ficident of 5.94p for the year, up 1% from the 5.86p distribution it made for the 2021 financial year.

“I am pleased to be reporting another set of strong full year results for the company,” said chairman Nick Hewson.

“This has been another significant year of growth and one in which we achieved the important milestones of being added to the Premium Segment of the London Stock Exchange and the FTSE 250 index.

“During the year, our direct portfolio has benefitted from a 3.7% like-for-like increase in valuation delivering a 6% increase in EPRA net tangible assets to 115p per share as at 30 June.”

Hewson noted that since IPO, the firm had delivered a 48% total shareholder return.

“At a time of considerable unpredictability and uncertainty especially for our economy, we believe our portfolio of targeted, sector specific real estate assets will continue to deliver stable, long-term, and growing income to our shareholders.”

At 1040 BST, shares in Supermarket Income REIT were up 1.77% at 116.02p.

Reporting by Josh White at Sharecast.com.