Just five months after raising £140m, Supermarket Income Reit (SUPR) is back asking investors to stump up £150m to further build its portfolio of grocery store assets. The retail landlord has identified a pipeline worth more than £400m and is in advanced discussions over three properties worth £135m.
Investors might forgive the dilution when they hear that the annual dividend target for the 2021 financial year has been raised to 5.86p a share, in line with June RPI inflation. A first quarter dividend of 1.465p per share has been declared, and will be paid in October.
Planned growth in shareholder payouts was backed by a rise in net rental income of more than half during the year to June, primarily due to acquisitions. Since June last year, nine supermarkets have been added to the portfolio, six of which were via sale-and-leaseback agreements to chains including Waitrose and Tesco (TSCO). However, contracted reviews resulted in an average 2.5 per cent in rent increases, in line with the upward-only, index-linked rent reviews present in the group's leases.
Consensus forecast adjusted net asset value stands at 100p a share at the end of June 2021, up from 98.2p the same time the prior year.
| SUPERMARKET INCOME REIT (SUPR) | ||||
| ORD PRICE: | 108p | MARKET VALUE: | £512m | |
| TOUCH: | 108-109p | 12-MONTH HIGH: | 113p | LOW: 88p |
| DIVIDEND YIELD: | 5.4% | TRADING PROP: | Nil | |
| PREMIUM TO NAV: | 7% | |||
| INVESTMENT PROP: | £595m* | NET DEBT: | 22% | |
| Year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 96 | 0.8 | 0.5 | 5.5 |
| 2019 | 96 | 10.6 | 5.3 | 5.6 |
| 2020 | 101 | 32.8 | 9.8 | 5.8 |
| % change | +5 | +209 | +85 | +4 |
| Ex-div: | ** | |||
| Payment: | ** | |||
| *Investments in joint ventures **Fourth quarter dividend of 1.46p a share paid on 7 August | ||||
