AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2024

STABLE VALUATIONS AND STRONG BALANCE SHEET UNDERPIN CAPACITY TO PURSUE ACCRETIVE ACQUISITIONS AND DRIVE EARNINGS GROWTH

Secure and growing income

• 12% increase in annualised passing rent to £113.1 million, reflecting:
  • 4% average like-for-like rental uplift
  • Accretive acquisitions in the year
• 100% occupancy and 100% rent collection since IPO
  • 75% of rental income from Tesco and Sainsbury’s
• 4.4% increase in adjusted EPS to 6.08 pence driven by rental growth and accretive acquisitions
• Fully covered FY24 dividend
• FY25 target dividend increased to 6.12 pence per share

Earnings accretive acquisitions

• Acquired 20 assets in UK and France for £135.8 million before costs at an average NIY of 6.7% (UK: 7.0%, France: 6.3%)
• arnings growth further supported through maintaining tight control of costs, achieving an EPRA cost ratio of 14.7% with further cost efficiencies targeted in FY25

Strong grocery sector growth

• UK grocery market sales forecast to increase by 5.8% to £251.6 billion in 2024
  • Tesco and Sainsbury’s increased sales and market share in the year with a combined 43% market share
  • Online market share at 12% and growing following post pandemic reset
• French grocery market sales forecast to increase by 2.1% to €290 billion in 2024
• Carrefour has a 19.6% market share in France
• Carrefour is targeting 3x online sales growth to €10 billion by 2026 (base year: 2021)7 with its online grocery channel forecast to grow 8.25% in 2024
• Online market share is currently at 10% and is one of the fastest growing channels
• Strategic transaction with Carrefour
  • One of the largest grocery operators in the world
  • Investment grade rated (BBB)10
• Acquisition of 17 omnichannel Carrefour stores in relationship led sale and lease back transaction for a consideration of €75.3 million before costs
• Acquired at a 6.3% NIY versus 4.4% funding cost
• Carrefour’s second ever sale and lease back transaction in France and first in 12 years
• Carrefour now represents 4% of portfolio GAV
• Highly affordable rents with uncapped inflation linked uplifts11

Supermarket property valuations stabilised

• Portfolio independently valued at £1.78 billion, inclusive of acquisitions of £135.8 million
• Net Initial Yield (“NIY”) of 5.9% (30 June 2023: 5.6%)
• Following a decline in valuations in 2023, like-for-like valuations were broadly flat in H2, up 0.1%
• Strong level of transactional activity across the sector with return of traditional institutional participants to the market
• Operator store buybacks, particularly Tesco, demonstrating mission critical nature of large format stores

Proactively managing balance sheet

• LTV of 37% as at 30 June 2024 (30 June 2023: 37%)
• Strong debt covenant headroom supporting acquisition led growth
• 100% of drawn debt fixed or hedged at a weighted average finance cost of 3.8%, including post balance sheet events (30 June 2023: 3.1%)
• Fitch BBB+ investment grade rating reaffirmed providing access to attractively priced long-dated debt
• New £104.5 million unsecured facility with SMBC at a weighted average margin of 1.45% with a maturity of three-years and two one-year extension options

Post balance sheet:

• New £100 million unsecured facility with ING at a margin of 1.55% over SONIA with a maturity of three years and two one-year extension options
• Oversubscribed 7-year Euro private placement at 4.4% fixed all-in cost, providing natural currency hedge for Carrefour portfolio acquisition

Further progress on key sustainability initiatives

• EV charging operational at 30% of sites and solar arrays across 20% of stores
• Science Based Targets validated and approved by the Science Based Targets initiative including a commitment to reach net zero by 2050
• Strong tenant net zero commitments driving significant tenant capital expenditure on stores
• Prepared and submitted EPRA Sustainability Best Practices Recommendations disclosures for the first time

Nick Hewson, Chair of Supermarket Income REIT plc, commented:

“The Company’s operational performance has been resilient with 100% occupancy and 100% rent collection despite the broader market and macro-economic challenges of the past years. We have taken a disciplined approach to capital deployment and have recently begun to see opportunities to add accretive acquisitions in the UK and France. We continue to monitor opportunities to recycle capital via asset sales and joint ventures.

Looking ahead, we remain optimistic that the improving interest rate environment should provide positive tailwinds for the Company. We are pleased to recommend another increased dividend of 6.12 pence per share for FY25 and remain focused on delivering a progressive dividend for shareholders.”

News in full

Below is a video, shot with the investment team of Atrato Group, the advisors behind SUPR, highlighting the Group’s investment strategy