Intu Properties (LON:INTU) informed shareholders on Monday that it is considering a capital increase at the end of February.
Intu’s trading has been in turmoil for months, and the company said talks over a capital increase would allow it to repair its balance sheet.
According to reports, the company is considering raising around £1 billion to help it get through these challenging times, and shareholders are being actively considered in discussions.
Matthew Roberts, Chief Executive Officer of Intu, commented:
“We delivered a strong performance in 2019 after the busy Christmas trading period. Total footfall in 2019 was 0.3% higher than 2018, flat in the UK and This significantly exceeded the Springboard visitor numbers.”
“Occupancy remains stable at 95 percent and 97 percent of rents have been collected for the first quarter of 2020 to date, indicating low risk for our existing customer base.”
“We are on track to repair our balance sheet, which is our top priority, and we have the right strategy in place to enable us to thrive as polarization continues between the best and worst destinations. I am confident that it is in place.”
Intu’s revenue expectations decline
In early November, Intu’s stock price plummeted after its 2019 earnings expectations fell.
The retail property giant has warned shareholders, saying its underlying net rental income outlook for 2019 is likely to be around 9% lower than last year.
New rents for the nine months to 30 September 2019 amounted to £19m, down from £32m in the same period last year.
The group said traffic was up 0.9% for the real estate company, “significantly outperforming the Springboard Traffic Monitor for shopping centers, which averaged a 2.4% decline.”
In its third quarter update, Intu reported seven long-term leases worth an annual rent of £5m, compared to 84 long-term leases worth £15m a year in the same period last year.
New River REIT Trading
Intu rival NewRiver Reit PLC (LON:NRR) has reported that it has bought a retail park in Northern Ireland from Intu for £40m.
The park includes 231,000 square feet of retail space, 1,200 parking spaces, and 18 acres of development land.
We are pleased to announce that we have entered into an agreement to acquire Sprucefield Retail Park,” said Alan Lockhart, CEO of New River.
“This high-quality asset will generate annual net property income of £3.7m, which significantly increases the underlying capital from the business and is important to improving our dividend cover, which is a key priority for us. .”
“In addition to attractive long-term returns, development sites offer the opportunity for significant capital appreciation, leading to very attractive total returns,” Mr Lockhart added.
Matthew Roberts, CEO of Intu, said: “We announced a new strategy in our July interim results, a key element of which is a balance sheet correction, including the creation of liquidity through disposals. We are delighted to have completed this transaction. This, together with the partial disposal of Into Derby and other miscellaneous asset sales in 2019, brings the total year-to-date disposal amount to £268m.
Intu’s share price is trading at 21p (-6.74%). 20/1/20 12:34BST.
