Peel Hunt has welcomed Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) decision to internalise its management, saying the move "seems very sensible." The company is ending its external advisory deal with Atrato Group and taking full control of operations for £19.7 million, funded by the recent sale of a Tesco store.
The shift is expected to generate at least £4 million in annual cost savings while boosting earnings and dividend growth. The board sees this as the best use of capital, delivering better returns than share buybacks or new acquisitions.
Key Atrato staff will join Supermarket Income REIT, with Rob Abraham becoming CEO and Mike Perkins taking on the CFO role. Shareholders will vote on the plan, with completion expected by 25 March.
"Overall, this seems a very sensible move by SUPR," said Peel Hunt in a note repeating its 'hold' recommendation and 70p price target. American bank Stifel repeated its 'buy'.
In afternoon trading, the stock was flat at 69.89p.