Supermarket Income REIT Shares Rise Despite Falling EPRA EPS

Supermarket Income REIT (LON: SUPR), a real estate investment trust that owns supermarket properties let to major grocers, saw its shares rise after publishing results for the year to 30 June 2026, which showed the portfolio growing to £2.0bn even as earnings per share fell.

The shares traded at 83.8p, up 1.64% from Tuesday’s close of 82.45p, near the top of their 52-week range of 70.81p to 89.00p.

Portfolio valuation rose 23.7% to £2,010m, while EPRA earnings per share, a measure of underlying rental profit, fell 4.1% to 5.7p from 6.0p a year earlier. The dividend per share still rose 1.0% to 6.2p, but dividend cover, the proportion of the payout covered by earnings, slipped to 93% from 98%. Chair Nick Hewson said: “On behalf of the Board, I am pleased to recommend a target dividend of 6.30p for the year ending 30 June 2027, a 2% increase which is in line with our minimum annual growth target communicated at our interim results.”

The weaker cover reflects both the earnings dip and £454m of acquisitions funded during the year, including purchases through its Blue Owl joint venture, which was scaled up to £855m. That spending pushed loan-to-value gearing to 43.9%, up from 31.1%, with net debt at 7.8 times underlying earnings. EPRA net tangible assets, a measure of the trust’s underlying asset value, rose 0.4% to 87.5p per share, close to today’s trading price.

Since its July 2026 equity raise, the trust has deployed £222m into nine further grocery assets, including its first grocery distribution centre, let to Sainsbury’s, at an average yield of 6.6%. Fitch reaffirmed the company’s BBB+ investment-grade credit rating during the period.

The board’s commitment to at least 2% annual dividend growth from next year, with a 6.30p target for FY27, gives income-focused holders a forward marker even as this year’s cover fell below 100%, leaving the balance between growth ambitions and rising leverage as the key point to watch.