Supermarket Income Reit Share Discussion Threads

[wllmherk] 12/10/2022 11:47

I bought some at 97p including costs, missed the low as working. Trying to think long term which is difficult with all the noise/panic around.

wllm :)

[frazboy] 12/10/2022 09:22

Anyone buying this morning? I realise that the gilts market is still blowing up but I'm kinda figuring/hoping that this is algo driven and once we get to say a 7% yield the downside is limited unless of course you think we're on the brink of financial meltdown...?

[williamcooper104] 07/10/2022 09:53

https://open.spotify.com/episode/0Izrk5DdR8Ts6dfDNVJg0I?si=4pckXibsQsah3QQ2Na5DeA&context=spotify%3Ashow%3A1te7oSFyRVekxMBJUSethHThis is a great podcast on history of LDI and what could mean going forward Re October 14th - makes the point that we could see a market "stoploss safari"

[williamcooper104] 07/10/2022 09:51

From what I've heard p funds exposure to UK equities was pretty small, and most of the panic selling was in credit assets (even weird things like Australian RMBS saw panic selling) But that said; it makes sense that the uk equity allocations would be in infra/defensive/long income REITs; so could well have contributed to some of the big gap downs last week Rather than step up and invest in Uk infra ofc DB schemes are now going to have to hold greater allocations of gilts/highly liquid assets

[jonwig] 07/10/2022 07:45

I've read that the LDI funds were heavy sellers of equities in last week's mayhem. The kinds of shares they would be likely to own would be safer asset-backed REITs and Renewables.

Knowing that the selling was forced, and not based on fundamentals is encouraging. But it could recur, as the BoE has time-limited its QE rescue and the OBR might not oblige the Chancellor. On top of that, there are EU and China stresses.

(I think it was in the FT, but which of the dozens of articles, I forget.)

[jong] 06/10/2022 09:56

Sorry got mixed up with another!!

[cwa1] 06/10/2022 07:58

Yes, 1.5p sounds MUCH more likely :-)

[jaf111] 06/10/2022 07:26

Xd 1.5p surely???

[jong] 06/10/2022 07:22

XD today. 6.85p per share payable on Thur 10 Nov.

[chucko1] 05/10/2022 17:52

Madame Lagarde is a comedy act.

[jonwig] 05/10/2022 16:15

FT is talking about stresses in global finance which go a long way beyond the "moron premium" applied to investing in the UK. The UK Tories are a mere sideshow.

The EU is chief worry, and China's internal difficulties with its slow crash in property will destroy growth.

Central Banks hold the reins. One is leading, one is following, one is clueless.
(US, UK, EU resp.)

[chucko1] 05/10/2022 15:47

Yup, from 92ish to 109ish was too much too soon. Gilts are in the firing line way beyond October 13th. The 68 linker tripled to 130 from a low of 40. That still has 40 write large all over it, although perhaps for reasons other than forced selling by pension funds.

That said, at 92, we have a yield of 6.5% and reasonably linked to inflation. That and 1.3 year Gilts is all I have on my radar screen for now. I am expecting a bloodbath at some stage, so I've put a few pints in the fridge for when I need it!

[badtime] 05/10/2022 15:43

Perhaps to quick a snap back ..now giving up bounce gains

[mister md] 30/9/2022 13:56

Well, 99.6p was the cheapest top-up I managed - seems a bit of recovery underway now

[chucko1] 30/9/2022 09:34

And don't forget - these people are far from stupid. If anything, this should have gone up the past few weeks.

I am sticking to my thesis that higher rates, so long as not entirely divorced from inflation (very unlikely looking at recent events), is a net positive for SUPR. The dampener, as ever, is the risk premium desired by investors on account of the otherwise batterings being administered. So I think it will take time for this to find a higher plateau.

... and don't say I didn't write about the risks of the Gilt (linker) market!! The longer dates are still expensive, although the shorter dates are now interesting and I have bought a few.

[mister md] 30/9/2022 08:00

and another ... ;-)

29 September 2022

Supermarket Income REIT PLC, announces that on 29 September 2022, Frances Davies , a Non Executive Director of the Company, acquired 24,774 Ordinary shares in the Company ("Ordinary Shares").

[mister md] 29/9/2022 08:54

and another ...

29/9 RNS
"Supermarket Income REIT PLC, announces that on 28 September 2022, Nick Hewson, Chairman and Non Executive Director of the Company, acquired 67,500 Ordinary shares in the Company ("Ordinary Shares")."

[epicsurf] 28/9/2022 22:32

Master investor
With the shares now trading at around a pound the target dividend of six pence gives them a prospective yield of six percent, which is fully covered by earnings and benefits from a significant element of inflation-linkage. The latest pro forma EPRA NTA of 111 pence puts the trust on a discount of 10% that looks attractive given that it has been trading at an average 12-month premium of 10%.

Positive fundamentals

In the accounts to the end of June the fund achieved like-for-like rental growth of 3.7% with 81% of the leases being inflation-linked, albeit with caps and floors. Of these, 73% are linked to the higher Retail Prices Index (RPI) and eight percent to the Consumer Prices Index (CPI), with two percent subject to fixed reviews and 17% to open market rent reviews.

The broker Winterflood says that this high level of inflation-linkage is particularly appealing given the current inflationary backdrop, while the rental uplift caps, which average four percent, ensure that the rents remain affordable for tenants. In fact, the underlying supermarket sales growth is now outpacing contractual rental growth, which makes the rents even more affordable.

Despite the inflation-linkage and the healthy growth in rent and EPS, the dividend was only raised by one percent to 5.94 pence, with the target dividend increased by a similar amount to six pence per share. This is clearly disappointing for investors, although the caution is probably warranted in the current environment and the prospective six percent yield remains attractive, especially as it is fully covered by earnings.

The debt is fully hedged

The managers have taken the decision to fully hedge the drawn debt to achieve an effective fixed rate of 2.8% until 2026, which gives the fund a conservative pro forma loan to value ratio of 31%. In the current economic environment this looks like a sensible move and should enable the fund to benefit from both the level and predictability of earnings going forward.

During its last financial year the trust was able to successfully raise £506.7m of new equity via two upsized and oversubscribed share issuances, which shows the level of demand for this unusual asset class. It also continues to expand its portfolio with a further five assets purchased for £216.1m post period end.

Winterflood expects SUPR to continue to deliver strong total returns over the coming years on account of its focus on omnichannel stores, which ensures that it benefits from the structural trend of online sales growth. They also point out that the non-discretionary nature of grocery demand means that the sector is likely to prove resilient in the current challenging macroeconomic environment

[income investor] 28/9/2022 18:29

I see a non-exec director made a well timed purchase today at 92p. Only bought £20k worth, but good to see director buying!

[williamcooper104] 28/9/2022 17:42

I got it wrong - the 2068 isn't the dot com gilt It's the crypto gilt

[chucko1] 28/9/2022 16:19

It helps when the 68 linker DOUBLES IN PRICE in a couple of hours.

[jonwig] 28/9/2022 16:08

I added some this morning before the BoE statement, though not a confident amount.

I sense these policies are being minced through the Ernest Hemingway machine: slowly then all at once.

[williamcooper104] 28/9/2022 09:34

Remember our Special Fiscal Operation will eventually become a Full Budget MobilisationSo plenty more muppet show

[williamcooper104] 28/9/2022 09:25

Yes - conspiracy => competence

[chucko1] 28/9/2022 08:49

It's an opportunity!! It will cost a few bruises first, though.