AIM:SIR

Stock Analysis Report

Executive Summary

Secure Income REIT Plc is a specialist UK REIT, investing in real estate assets that provide long term rental income with inflation protection.


Snowflake Analysis

Proven track record and slightly overvalued.


Similar Companies

Share Price & News

How has Secure Income REIT's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SIR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.7%

SIR

-3.0%

GB REITs

-4.4%

GB Market


1 Year Return

14.6%

SIR

9.4%

GB REITs

1.4%

GB Market

Return vs Industry: SIR exceeded the UK REITs industry which returned 9.4% over the past year.

Return vs Market: SIR exceeded the UK Market which returned 1.4% over the past year.


Shareholder returns

SIRIndustryMarket
7 Day-1.7%-3.0%-4.4%
30 Day-1.1%-2.9%-6.3%
90 Day8.6%0.7%-2.7%
1 Year19.1%14.6%14.2%9.4%6.7%1.4%
3 Year56.1%39.2%23.9%6.5%12.6%-1.5%
5 Year87.3%62.0%23.8%-0.8%28.8%-0.7%

Price Volatility Vs. Market

How volatile is Secure Income REIT's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Secure Income REIT undervalued compared to its fair value and its price relative to the market?

9.34x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SIR (£4.56) is trading above our estimate of fair value (£2.44)

Significantly Below Fair Value: SIR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SIR is good value based on its PE Ratio (9.3x) compared to the REITs industry average (15.2x).

PE vs Market: SIR is good value based on its PE Ratio (9.3x) compared to the UK market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: SIR's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SIR is overvalued based on its PB Ratio (1.1x) compared to the GB REITs industry average (1x).


Next Steps

Future Growth

How is Secure Income REIT forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

-13.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SIR's earnings are forecast to decline over the next 3 years (-13% per year).

Earnings vs Market: SIR's earnings are forecast to decline over the next 3 years (-13% per year).

High Growth Earnings: SIR's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SIR's revenue is expected to decline over the next 3 years (-3.9% per year).

High Growth Revenue: SIR's revenue is forecast to decline over the next 3 years (-3.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SIR's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Secure Income REIT performed over the past 5 years?

2.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SIR has a large one-off gain of £99.0M impacting its June 30 2019 financial results.

Growing Profit Margin: SIR's current net profit margins are higher than last year .


Past Earnings Growth Analysis

Earnings Trend: SIR's earnings have grown by 2.6% per year over the past 5 years.

Accelerating Growth: SIR's earnings growth over the past year (37%) exceeds its 5-year average (2.6% per year).

Earnings vs Industry: SIR earnings growth over the past year (37%) exceeded the REITs industry -20.8%.


Return on Equity

High ROE: SIR's Return on Equity (11.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Secure Income REIT's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: SIR has a high level of physical assets or inventory.

Debt Coverage by Assets: SIR's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: SIR's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if SIR has a sufficient allowance for bad loans.

Low Risk Liabilities: SIR reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if SIR has an acceptable proportion of non-loan assets held.

Low Risk Deposits: SIR has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if SIR has an appropriate level of bad loans.


Next Steps

Dividend

What is Secure Income REIT's current dividend yield, its reliability and sustainability?

3.45%

Current Dividend Yield


Dividend Yield vs Market

company3.4%marketbottom25%1.9%markettop25%5.3%industryaverage3.9%forecastin3Years3.9%

Current dividend yield vs market & industry

Notable Dividend: SIR's dividend (3.45%) is higher than the bottom 25% of dividend payers in the UK market (1.9%).

High Dividend: SIR's dividend (3.45%) is low compared to the top 25% of dividend payers in the UK market (5.34%).


Stability and Growth of Payments

Stable Dividend: SIR has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SIR's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (45.4%), SIR's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SIR's dividends in 3 years are not forecast to be well covered by earnings (117.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average board tenure


CEO

Mike Brown (58yo)

0

Mr. Phillip Michael Brown, also known as Mike, B.Sc. (Land Man), MRICS is a Partner and Chief Executive Officer at Prestbury Investments LLP. Mr. Brown has been with Prestbury Investments since June 2009.  ...


Board Members

NamePositionTenureCompensationOwnership
Phillip Brown
CEO & Director0yrsno data0.37% £5.4m
Sandy Gumm
Company Secretary & Non-Executive Director13.1yrsno data0.060% £878.2k
Nicholas Leslau
Non-Executive Director13.1yrsno data0.018% £262.1k
Martin Moore
Non-Executive Chairman5.8yrsUK£75.00k0.037% £539.7k
Jonathan Lane
Independent Non-Executive Director5.8yrsUK£40.00k0.018% £262.1k
Ian Marcus
Senior Independent Director0yrsUK£40.00k0.027% £396.8k
Leslie Ferrar
Independent Non-Executive Director5.8yrsUK£45.00k0.0070% £103.6k

5.8yrs

Average Tenure

60yo

Average Age

Experienced Board: SIR's board of directors are considered experienced (5.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 26%.


Top Shareholders

Company Information

Secure Income REIT Plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Secure Income REIT Plc
  • Ticker: SIR
  • Exchange: AIM
  • Founded: 2007
  • Industry: Diversified REITs
  • Sector: Real Estate
  • Market Cap: UK£1.472b
  • Shares outstanding: 322.85m
  • Website: https://www.SecureIncomeREIT.co.uk

Location

  • Secure Income REIT Plc
  • Cavendish House
  • 18 Cavendish Square
  • London
  • East Lothian
  • W1G 0PJ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SIRAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJun 2014

Biography

Secure Income REIT Plc is a specialist UK REIT, investing in real estate assets that provide long term rental income with inflation protection. The Company owns a £2.05 billion portfolio at the 30 June 2019 external valuation (adjusted for the sale of eight hospitals in July 2019) of 164 high quality assets let to financially strong businesses in defensive sectors on leases with a c. 21.5 year weighted average unexpired term. 59% of the Group's rental income is subject to upwards only RPI-linked reviews and 41% to fixed uplifts. The Company has a highly experienced board, chaired by Martin Moore, and is advised by Prestbury Investments LLP. Prestbury is owned and managed by Nick Leslau, Mike Brown, Tim Evans, Sandy Gumm and Ben Walford, a team with a long-standing and successful track record in real estate investments and asset management and, with an investment worth c. £190 million in the Company, very close alignment with the interests of shareholders. An investment in the Company offers a secure, growing income stream, strong foundations for sustainable capital growth and the prospect of attractive risk adjusted returns for shareholders over the long term. The Company is a UK REIT which floated on the AIM market of the London Stock Exchange in June 2014. The Company's LEI is 213800M1VI451RU17H40. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 22:26
End of Day Share Price2020/02/25 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.