Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has reported a solid first half and remains focused on boosting earnings to help close the gap between its share price and the value of its assets.
Chair Nick Hewson said the company is making good progress on its strategic objectives, which include cost savings, lease renewals, and asset sales.
For the six months to December 31, the company posted a 12% rise in operating profit to £50.3 million, while annualised passing rent - what it collects from tenants - jumped 13% to £118.5 million. Adjusted earnings per share edged up to 3p, and the company is on track to meet its full-year dividend target of 6.12p per share.
The net asset value (NAV), a key metric for real estate investment trusts (REITs), rose slightly to 88p per share. The portfolio valuation increased 3% to £1.83 billion, reflecting stable demand for grocery-anchored properties. The company’s loan-to-value ratio, which measures debt against assets, rose to 39%, though 93% of its debt is hedged against interest rate increases.
Supermarket Income REIT has been actively managing its portfolio, selling a Tesco store in Newmarket for £63.5 million - 7.4% above book value - and acquiring new properties, including a Sainsbury’s store in Huddersfield and nine Carrefour supermarkets in France.
The company is also internalising its management team, a move expected to save at least £4 million annually and improve long-term dividend cover. Shareholders will vote on the proposal later this month.
Hewson said the company remains committed to strengthening its earnings and securing fair value for its shares.