Half Year 2025 Supermarket Income REIT PLC Earnings Call Transcript
Key Points
- Supermarket Income REIT PLC (LSE:SUPR) reported a 3% growth in adjusted earnings, driven by acquisitions and rent reviews.
- The company's portfolio was valued at GBP1.83 billion, reflecting a 0.5% like-for-like increase.
- The proposed internalization is expected to deliver significant cost savings of at least GBP4 million per annum.
- SUPR has one of the lowest EPRA cost ratios in the sector at 13.6%, with a target to reduce it further to below 9%.
- The company maintains a strong balance sheet with a BBB+ investment grade credit rating and a loan to value of 38%.
- Finance costs have risen to GBP12.9 million due to higher leverage and increased debt.
- The company operates at a higher leverage compared to previous periods, which could pose risks if market conditions change.
- Despite the growth in earnings, the discount to NAV remains a challenge that the company aims to address.
- The competitive landscape includes operators like Tesco and Sainsbury's, which could impact SUPR's acquisition opportunities.
- The transition to unsecured debt and refinancing efforts may introduce uncertainties in the short term.
Good morning all. And thank you for joining us here today. As it's been an incredibly busy time in the lead up to today, so I'm very pleased to present to you the Supermarket Income REIT interim results to the December 31, 2024.
It's been another period of strong operational performance for the company, supported by the highly resilient grocery sector, where our key tenants, Sainsbury's and Tesco continue to perform strongly. We've made significant progress delivering on our key strategic objectives, which were announced in November 2024, and which are designed to drive earnings growth and enhance dividend cover, with the goal of closing the discount to NAV.
Of those initiatives, the recently announced proposed internalization will position the company well for future growth. And on behalf of the Board, I'd like to express my sincere thanks to Ben Green and Steve Windsor and the wider Atrato business for the time and effort that they have invested in this company, building Supermarket to where it
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