Intu Properties Share Discussion Threads

[123trev] 30/11/2018 12:43

So what’s needed here is an idea of what this stock is worth at a basic level that will generate interest and force Odeys hand!

[cc2014] 30/11/2018 12:40

Intu Properties agrees trio of disposals for £25m

(Sharecast News) - A day after revealing that a consortium led by its deputy chairman had pulled its £2.9bn takeover offer for the shopping centre owner, Intu Properties announced a trio of property disposals for £25.3m.

The company, which said on Thursday that the consortium led by John Whittaker had abandoned its pursuit due to Brexit uncertainties, has agreed terms for the sale of all three properties at above book value.

As part of its ongoing disposal and capital recycling programme, some of the proceeds of which will be reinvested into the ongoing pipeline, Intu has agreed to sell off a freehold investment in Brierley Hills in the West Midlands, freehold and leasehold interests in York House in Nottingham and a former BHS store in Derby.

According to a Press Association report, the Derby store has been purchased by Sports Direct founder Mike Ashley, who threatened earlier this week to close all 17 of his stores in Intu shopping centres in a row over rent.


Surprisingly all sold at above book value!!!
And even more surprisingly one bought by Mike Ashley!!

[trcml] 30/11/2018 12:37

With respect, some comments yesterday and to date are too simplistic. In principle, it makes sense for those retailers whose business model depends upon substantial footfall to lease premises in malls. However, the cost of leasing including shop-fit and compliance with mall regulations (including opening hours) does not come cheap. Also, most retailers are nowadays into short-term commitment (5 years or less) which from an investor perspective is not ideal, valuers n=mark down and banks in particular prefer longer leases for cash-flow certainty. A mall with 90-100% occupancy looks good on the face of it, but from a lending and valuation perspective the duration of tenant leases is of concern.

Intu reducing its dividend also concerns. One reason the share price was riding high was the around 9% yield which by overt accounts was sustainable. Reducing the payout rather suggests that Intu do not have the cash, or worse the borrowing flexibility on loan-to-asset- value.

As for growth, nominal increases in rent here and there do not automatically rub off on the entire portfolio. Why would shareholders want to back Intu's board's ideas to exploit the value of the portfolio when really that should've been done years ago?

For Intu, it's not just that many of their malls' retailers are suffering; it's also that Intu's assets are overvalued. Not only retailers slow to react to changes, but also valuers.

JW and the consortium are not going away. But the expectation of making a quick turn on the purchase price is not going to happen, in which case what's the hurry?

[yump] 30/11/2018 12:30

catcheymonkey

I find it quite satisfying that shopping centres will not just be about shopping. Retail obsession imo is one of the saddest things that has happened over the last xx years, particularly in the UK.

[montyhedge] 30/11/2018 12:28

Is dividend safe ?

[yump] 30/11/2018 12:27

EssentialInvestor

Yes, it seems that occupies a large part of the assessment of INTU and recently to the exclusion of the actual business itself, although I guess that value has always been
a key part of the assessment, because of the comparison of returns.

[catcheymonkey] 30/11/2018 11:03

"These three deals, all successfully sold at above book value, are further evidence of our commitment to dispose of non-core assets and recycle capital into our exciting development programme. All three sites will continue to benefit from being in the vicinity of hugely popular intu shopping centres which welcome millions of shoppers every year."

[essentialinvestor] 30/11/2018 10:52

yump, the potential destruction in the value of retail assets has been
discussed on the Land, Blnd boards for the last two years. And elsewhere.

[yump] 30/11/2018 10:50

I note that not one of these so-called analysts has put out any predictions about when the ratio of internet purchasing to store purchasing will stabilise. That's the one key assessment that would be really helpful.

[yump] 30/11/2018 10:46

Some of the malls integrate warehousing as well, although it depends on the design. The problem is the time its taking to change tack by the retailers.

Retailers were slow to react to the changes, partly because of legacy and partly I'm sure just due to inertia of BOD's who don't want to downsize (their egos).

So that has delayed the effect on INTU. INTU couldn't have forced a change in the mix while retail continued, so they are having to follow on. But they are doing that. If they can continue while not losing chunks of rent, they'll recover imo.

Nobody seems to be criticising BOWL who are doing quite well. What a ridiculous idea: stand-alone bowling alleys, when most people are online playing games...

I guess some people read Animal Farm years ago and its got into their heads permanently. Tory or Labour. Internet or Retail. One good, the other bad.

[knowing] 30/11/2018 10:45

Broker Forecast - Deutsche Bank issues a broker note on Intu Properties
By BFN News | 09:10 AM | Friday 30 November, 2018
Factsheet INTU PROPERTIES (INTU)

Deutsche Bank today reaffirms its hold investment rating on Intu Properties (LON:INTU) and cut its price target to 110p (from 140p). Story provided by StockMarketWire.com Broker Forecasts data provided by www.sharesmagazine.co.uk

[andycapp1] 30/11/2018 10:43

Golly Escape that is some searing analysis! Who let you out?

[catcheymonkey] 30/11/2018 10:35

210.4p was way too low an offer. I for one am glad it fell through.

Long term, people are using malls more and high streets less. Internet shopping and macro uncertainty is making all b+m retail struggle, but not every mall will close. Intu own many of the best of them, and are also at the front of developing them into a wider experience than just a string of shops. It's trading way below NAV. Sure, they can't realise the NAV in the present climate, which also stops them concentrating into just the higher quality locations. That limits their potential for efficiency in the next few years, but doesn't erode their overall prospect which, IMO, is still solid.

[yump] 30/11/2018 10:34

So it was worth about 200p to a potential bidder, who is closely involved in the business and its market, but 120p to 'the market'. Who is likely to be right ?

Yes, the bidder pulled out, but why go to the bother of spending any time on discussion, costs, etc. etc. if 200p was not a reasonable price ?

[profitaker] 30/11/2018 10:16

Be greedy when others are fearful.

[escapetohome] 30/11/2018 10:09

Thought so , suckers rally .

RED FINISH, OH DEAR,!

[tsmith2] 30/11/2018 10:02

Need capitulation here..

[yump] 30/11/2018 10:00

So many such 'clever' people being wise after the event when the share is at an all time low. Takes a lot of brain power that.

So on that basis, the bid was made by a load of numpties who haven't a clue about business or potential returns on owning INTU. They should be listening to BB posters.

[smurfy2001] 30/11/2018 03:18

Why the negative EPS ? I’m surprised they didn’t cut even further the dividend

[ericshunn] 29/11/2018 23:18

The outgoing CEO has been at 'Intu' his entire career. The deputy chair an investor for many years. Other than selling out Covent Garden all INTU have done is collect rent, very expensively and with little if any innovation. Trafford was inspired by JW. Lakeside is 30+? years old, the rest of the portfolio older still. Sadly a dinosaur. Over geared, and in a death spiral.

[essentialinvestor] 29/11/2018 23:14

Did any of the Intu BOD buy today?, Or at HMSO, or Land, Blnd.

Silence is golden, or perhaps not.

[hugepants] 29/11/2018 23:00

As the more marginal and rubbish shopping centres start losing tenants they'll become unviable and close. The remaining tenants will be forced to migrate to the remaining high footfall locations, like those of Intu. Demand will push the rents up over time.

[ny boy] 29/11/2018 19:28

Having a decent reset here, obviously no bidders left, so have they got enough cash to survive the next 12/24 months. How much debt have they got?