Supermarket Income REIT (SUPR) announced its annual results for the year ended June 30 2023. The company saw resilient financial performance with strong income growth despite a 19% fall in EPRA net tangible assets (NTA) in the year to 30 June 2023. With dividends, this equates to a 16% fall in NAV for the year and 39% share price total return.
Over the year, SUPR achieved a 30% increase in annualised passing rent to £100.6 million, 100% occupancy, 100% of rent collected, and a 4.1% average rental uplift. Adjusted earnings also increased by 26% to £72.4m and are targeting a dividend of 6.06 pence per share for FY 2024.
Chair, Nick Hewson, commented:
“The UK grocery sector has again demonstrated resilience despite the challenging macroeconomic environment we have experienced during the year. We remain focused on our investment strategy of acquiring and managing a high-quality portfolio of omnichannel supermarkets. These give us exposure to the fastest growing segment of the UK grocery market which itself is experiencing strong growth.
During the year, Sainsbury’s purchased our interest in the Sainsbury’s Reversion Portfolio joint venture for £430.9 million which we redeployed into higher-yielding supermarkets that met our strict investment criteria alongside reducing our debt, materially strengthening our balance sheet.
This purchase by one of our own tenants of 21 of its own stores highlights the attractiveness of UK supermarket property, which is further illustrated by the fact that the year has seen in excess of £1.7 billion of investment volume in our property sub-sector, driven by the positive long-term outlook for UK grocery. This activity has contributed to stabilising property valuations in the UK supermarket property sub-sector.
As we look forward, the quality of our unique omnichannel supermarket portfolio and the increasing affordability of grocery rents, together with our robust balance sheet means we are well positioned to continue delivering long-term value for our shareholders.”
SUPR : Resilience despite challenging year for Supermarket Income REIT