Top story

Supermarket Income REIT has announced the acquisition of Sainsbury’s supermarket in Preston, Lancashire, from Legal & General for £54.4m, excluding acquisition costs.

The deal reflects a net initial yield of 5.1%.

The store, on a prominent 10-acre site next to Preston town centre, was originally developed in 1992, and extensively refurbished in 2010.

The supermarket comprises 78,000 sq ft net sales area with a 12-pump petrol filling station, 520 parking spaces and purpose built online fulfilment distribution docks supporting Sainsbury’s online grocery business across the region.

Supermarket Income REIT is buying the store with an unexpired lease term of 22.5 years with annual, upward-only, Retail Price Index-linked rent reviews subject to a 4% cap and 1% floor.

The company has also arranged a new five-year, interest-only, term loan facility with Dekabank.

The £47.6m facility has a fixed rate equal to a 1.35% margin over three month LIBOR which is currently equivalent to a total cost of 2.%. It is secured against the Sainsbury’s supermarket in Preston and the Tesco supermarket in Mansfield acquired in April 2019. The facility also includes a £40m uncommitted accordion option for the term of the facility.

Ben Green, director of Atrato Capital, the investment advisor to Supermarket Income REIT, said: “This Sainsbury’s supermarket is a great addition to our growing portfolio of omnichannel stores. The property has very attractive lease terms, strong fundamentals and provides further diversification to the portfolio.

“We are delighted to have secured Dekabank as a new lender to the group. Our new facility provides us with very competitively-priced, five-year funding with room to grow to support the company’s future investment requirements.”

Morning update

Eddie Stobart Logistics (ESL) should have announced its interims this Thursday but it has been forced to delay until “early September”.

The company announced a temporary suspension of trading on AIM on Friday alongside a major board change which saw Alex Laffey, its chief executive, stand down with immediate effect.

It said that as part of the group’s review carried out with the its auditors in relation to the interim results, the board was applying “a more prudent approach to revenue recognition, re-assessing the recoverability of certain receivables, as well as considering the appropriateness of certain provisions”.

While revenue expectations for the first half were broadly in line with previous guidance, the full impact of these items on adjusted EBIT was unclear, but it was likely to be significantly lower than anticipated at the time of the half-year trading update on 9 July.

The board also intended to review the group’s current dividend policy as a result.

Pending clarification of the impact of these items, the group had applied to suspend trading of the company’s ordinary shares on AIM, which took effect from 7.30 am on Friday.

The group previously announced that the company would release its interim results for the six months to 31 May 2019 on 29 August 2019.

The statement said the board had full confidence in the ability of Eddie Stobart’s management team to deliver an improved performance for the group and remained confident in the strength of the underlying business.

Sebastien Desreumaux chief executive of iForce and head of contract logistics, has taken over as chief executive.

The statement said Desreumaux, who joined Eddie Stobart in 2018, had extensive experience in the logistics sector, including 20 years spent with Norbert Dentressangle, now part of XPO Logistics.

During his time at Eddie Stobart, Desreumaux had driven the integration of iForce’s e-commerce expertise with the wider capabilities of the group and, since taking on a wider role as head of contract logistics and warehousing, had achieved significant productivity improvements in this business segment.

On the markets this morning, the FTSE 100 fell 0.3% in early trading to 7,076pts.

Early risers include Devro (DVO), up almost 4% at 194.2p, McColl’s Retail Group (MCLS), up 3.4% to 53.8p ahead of Thursday’s trading update, PayPoint (PAY), up 3.2% to 940p, Hilton Food Group (HFG), up 3% to 995.9p and Real Good Food (RGD), up 2.9% to 6.8p.

Fallers so far today include Stock Spirits Group (STCK), off 3.8% at 226.5p, Science in Sport (SIS), down 1.8% to 54p, Imperial Brands (IMB), down 1.7% to 2,020.7p, Just Eat (JE), down 1.2% to 763.2p and Naked Wines (WINE), fell 1.2% to 256.5p.

This week in the City

Scheduled announcements are thin on the ground after the August Bank Holiday.

The British Retail Consortium Shop Price Index is scheduled for tomorrow.

WH Smith will give a trading update tomorrow.

Eddie Stobart interims, which had previously been scheduled for Thursday, have been delayed until “early September”. McColl’s Retail has a trading update scheduled on Thursday.

The GFK Consumer Confidence figures are due on Friday.

Topics