Supermarket Income REIT: Half-year Report
The Board of Directors of Supermarket Income REIT plc (LSE: SUPR), the real estate investment trust providing secure, inflation-protected, long income from grocery property in the UK , is today reporting its interim results for the Group for the six months ended 31 December 2020 (the “Period”).
Financial Highlights
- Annualised passing rent – UP 76.6% to £46.1m (6m to Dec 2019: £26.1m)
- EPRA Earnings – UP 115.3% to £15.5m (6m to Dec 2019: £7.2m)
- Profit before tax UP 323.1% to £33.0m (6m to Dec 2019:£7.8m)
- Dividend paid per share UP 1.7% to 2.93p (6m to Dec 2019: 2.88p)
- EPRA EPS UP 12% to 2.8p (6m to Dec 2019: 2.5p)
- EPRA dividend cover: 1.12x (6m to Dec 2019: 0.84x)
- IFRS net assets UP 45% to £691.8m (6m to Dec 2019: £477.2m)
- EPRA NTA UP 44.9% to £694.0m (6m to Dec 2019: £479.1m)
- EPRA NTA per share UP 3% to 104 pence (6m to Dec 2019: 101 pence)
- Loan to value (Direct Portfolio) UP +37.1% to 27.0% (6m to Dec 2019: 19.7%)
- Portfolio net initial yield DOWN 6% to 4.7% (6m to Dec 2019: 5%)
- 26.4% Total Shareholder Return since the initial listing in July 2017[1]
- Two quarterly dividends declared for the Period totalling 2.9 pence per ordinary share
- On track to deliver full-year 2021 target dividend of 5.86 pence per share
- Direct Portfolio independently valued at £885.3 million increasing by £345.9 million for the Period following valuation growth of £31.9 million and new acquisitions of £314.0 million (excluding acquisition costs)
- 5.5% valuation growth on a like-for-like basis for the six month period
- Direct Portfolio net initial yield (“NIY”) of 4.7%
- Direct Portfolio weighted unexpired lease term (“WAULT”) of 16 years
BUSINESS HIGHLIGHTS
- £200.0 million in equity raised via an upsized and over-subscribed Placing and Offer for Subscription in October 2020
- Acquisition of 13 complementary omnichannel supermarket assets in the six months to 31 December at an aggregate purchase price of £314.0 million (excluding acquisition costs)
- New acquisitions NIY of 5.1% versus Portfolio NIY of 4.7%
- New acquisitions WAULT of 14 years
- Direct Portfolio net loan to value (“LTV”) ratio of 27.0% as at 31 December 2020
- Weighted current cost of debt of 2.0%
- Net Tangible Asset Value (“NTA”) per ordinary share of 104 pence as at 31 December 2020; and
- 100% of rent collected in full shortly after the balance sheet date
POST BALANCE SHEET EVENTS
- £177.1 million of post balance sheet acquisitions comprising:
- Purchase of 4 omnichannel supermarket sites for £119.6 million (excluding acquisition costs) providing a blended NIY of 4.9% and a blended 19 year unexpired lease term.
- Acquisition of a further 25.5% stake in the Sainsburys Reversion Portfolio for £115.0 million (excluding funding for acquisition costs) through the Company’s existing 50:50 joint venture with British Airways Pension Trustees Limited (“BAPTL”). The Group’s investment was £57.5 million (excluding funding for acquisition costs).
- £113.75 million in new debt financing at a cost of 1.55% and a term of 5 years.
Nick Hewson, Chairman of Supermarket Income REIT plc, commented:
“I am delighted to report another period of solid performance by the Group. Our Direct Portfolio benefitted from a 5.5% like for like valuation growth which in turn delivered a material growth in EPRA NTA to 104 pence per share.
The last 12 months have highlighted the critical role of grocery property in the UK’s feed the nation infrastructure. Our supermarkets play a key role in supporting the response of the UK grocery sector to the pandemic and as a result we have experienced strong property investor interest in our market and consequently a tightening of yields.
Since our IPO in July 2017, we are pleased to have delivered a Total Shareholder Return of 26.4% for our shareholders. We continue to offer investors stable, long-term, inflation-protected income, supported by a compelling real estate opportunity.”
