Supermarket Income REIT PLC posted a second-half 2026 earnings-per-share beat, delivering 0.0312 against a forecast of 0.0287 — a gain of roughly 8.7%. Revenue of £53.25 million narrowly missed the £53.43 million consensus estimate by 0.34%, while net rent income rose 6% year-over-year to £122 million.
Reported EPRA earnings came in at 5.7p per share, down 4% from a year earlier. The REIT achieved 100% portfolio occupancy and collected 100% of rents due across its holdings.
Gross asset value reached £2.2 billion, up 37% from £1.6 billion a year ago, driven largely by completed acquisitions and internalization of management functions. The company stated it has a long-term ambition to grow the portfolio toward £4 billion, with CEO Rob noting that timing depends on whether deals prove accretive rather than for growth's sake. "In the right environment, it may take as little as 2 to 3 years," he said.
Net asset value per share edged up to 87.5p from 87.1p. Total accounting return for the period was 7.5%, described as income-driven. The EPRA cost ratio improved sharply to 9.2%, down 380 basis points from 13.6% before the internalization of management services, and management signaled it expects the ratio to fall below 9% in the next financial year.
Dividend per share paid for the full financial year stood at 6.2p. Dividend cover came in at 93% for the current year, with management projecting consensus estimates of close to full coverage by FY2027 and complete coverage thereafter. The company has raised its dividend for nine consecutive years and targets a minimum 2% increase in the coming year. The current yield trades around 7.34% to 7.5%.
The Blue Owl joint venture was scaled to £855 million, involving asset transfers totaling £635 million at an average disposal yield of 6.2%. Management estimated the additional management fee from the restructuring would add approximately 0.3p in annualized earnings per share, equivalent to roughly 5% of dividend cover. Since July 2024, the REIT has completed £676 million in earnings-accretive acquisitions deployed at net initial yields between 6.5% and 6.8%.
In July, the REIT raised £100 million in equity — its first capital raise since 2022 — and fully deployed the proceeds within two months into nine grocery properties valued at £222 million, yielding 6.6% net initial. Retail investors contributed £10 million, representing about 10% of the total raise, through the RetailBook platform.
Debt profile remained a focal point. Average cost of debt was 4.4%, with loan-to-value standing at 45% after equity deployment. Approximately £1 billion in debt refinancings were completed over the past year, and the company's debut public bond priced at 5.125%. Net debt-to-EBITDA measured 7.8 times, and the debt-to-equity ratio was 0.64. Ninety-eight percent of debt is fixed or hedged through June 2028, with no major refinancing obligations due until then. Management noted the LTV covenant breach threshold would require a property valuation decline of roughly 27%.
The portfolio comprises 140 supermarket properties, approximately 90% in the U.K. with 46 assets in France. Average lease length ranges from 11 to 12 years, with 83% of income inflation-linked (average caps around 4%) and 75% derived from investment-grade tenants.
Tesco, the company's largest tenant and one it describes as its largest landlord relationship, generates annual U.K. revenue of £44 billion with a 28% market share. Large-format store sales are growing roughly 4% annually, while online sales expand at double-digit rates.
Management highlighted several specific value-enhancing transactions. A former Homebase site in Nottinghamshire was re-anchored by M&S and Sainsbury's on 20-year index-linked leases at GBP 24 to GBP 28 per square foot. A Sainsbury's logistics warehouse was completed at Avonmouth near Bristol. A Surrey Waitrose property saw a 16% uplift at open-market rent review. At another site, Boots was renewed for five years, increasing rental income by £400,000 annually and producing a 10% valuation increase.
