Open main menu
Home
Random
Donate
Recent changes
Special pages
Community portal
Preferences
About Stockhub
Disclaimers
Search
User menu
Talk
Contributions
Create account
Log in
Editing
Supermarket Income REIT
(section)
Warning:
You are not logged in. Your IP address will be publicly visible if you make any edits. If you
log in
or
create an account
, your edits will be attributed to your username, along with other benefits.
Anti-spam check. Do
not
fill this in!
==Summary== Supermarket income REIT (SUPR) showed a strong H122 financial performance, driven by accretive portfolio growth alongside index-linked rental growth. The prospects for this to continue are well supported by structural trends in the market. SUPR continues to identify accretive acquisition opportunities while its recent admission to the Premium Segment of the LSE and Investment Grade credit rating provide additional flexibility and depth to its funding strategy. '''Strong investment returns continued in H122''' Strong H122 progress included a 60% y-o-y increase in net rental income (to £32.6m) and EPRA earnings growth of 74% (to £26.9m). Confirming the benefits of increasing scale, the EPRA cost ratio fell to 15.6%. EPRA EPS was up 11% to 3.1p and covered DPS 1.13x. NAV per share increased 5% versus end-FY21 and including DPS paid the NAV total return was 7.8%. NAV growth benefited from 2% like-for-like growth in the direct portfolio and strong gains in the JV following Sainsbury’s exercise of purchase options over 21 of the 26 assets. The £200m (gross) proceeds of the October 2021 equity raise were fully deployed within three months in accretive acquisitions and debt funding is in place for further growth. Our EPRA EPS forecasts are reduced c 2% in FY22 and 5% in FY23, primarily due to higher interest rates, but forecast fully covered DPS growth is unchanged. '''Supported by structural trends''' UK grocery sales remain 10% above pre-pandemic levels despite the economy re-opening, in part due to the impact of the shift towards working from home on household spending. Omnichannel stores, the focus of SUPR’s portfolio, have captured an outsized share of the growth with 80% of all UK online orders fulfilled from a store. Inflation is providing a positive tailwind for SUPR, with 85% of rents inflation linked, while the non-discretionary nature of most grocery sales has historically benefited the sector in an inflationary environment. Migration to the Premium Segment of the LSE, with likely inclusion in the FTSE 250 and EPRA NAREIT indices in June, and the attainment of an Investment Grade credit rating may provide access to a wider pool of investors and add to debt funding flexibility. Both should support further inorganic growth from a strong pipeline of opportunities. '''Valuation: Well supported income visibility''' SUPR provides visibility of income and DPS growth with good inflation protection. The prospects for further capital growth are also favourable. The FY22 target DPS of 5.94p represents a yield of 4.9%, in line with a selected peer group of other long-income REITs and supporting the c 7% premium to end-H122 NAV.
Summary:
Please note that all contributions to Stockhub may be edited, altered, or removed by other contributors. If you do not want your writing to be edited mercilessly, then do not submit it here.
You are also promising us that you wrote this yourself, or copied it from a public domain or similar free resource (see
Stockhub:Copyrights
for details).
Do not submit copyrighted work without permission!
Cancel
Editing help
(opens in new window)