Intu Properties (lon:intu)
INTU – Where Will The Share Price Fall End?

Intu Properties Financials

ItemCurrent PeriodPrevious Period
Year20192018
Period6 Months6 Months
Revenue£205m£223m
Earnings
Adjusted Earnings£66m£98m
EBITDA
Adjusted EBITDA
Statutory Profit(£829m)(£486m)
Adjusted Profit
Total Debt
Net Debt£4714m£4867m

Commentary History
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Intu Properties Share Price
Grade:No grade has been assigned to this company
Title: INTU – Where Will The Share Price Fall End?
Company: INTU - Intu Properties
Share Price Then: 32.2p
Author: Ian Smith
Date: Fri 23 Aug 2019
Comments: Another quick look at INTU shows a continual fall in the share price, now down to 32p and there is very large number of retail trades mostly in the hundreds or a few thousands of pounds.

For a share that was trading at around 190p in November last year on the strength of a possible take over this is a big drop.

What surprises me though is how little has changed, rental income is down a bit, over half of which is a result of Administrations and CVAs and some big property revaluations.

The company is still profitable but it is reporting huge losses as result of property revaluations and everybody is scared by the £4.9billion in debt against property valued at £7.9billion, down from £10.7biilion in 2017.

As there are big repayments starting in 2021 of £0.9b, £1b and £0.7b over four years this isn’t surprising.

Added to this the revaluations are sending debt to asset value covenants close to being breached but how much further can the property value drop?

As buying and selling a shopping centre happens so rarely it seems to me that there is no real market value, if the oil price goes up and a sovereign wealth fund needs to spend some money then the market price is different simply because of the need to spend.

Unless there is a point at which no retailer wants shops and I don’t believe this to be the case then there will be shops, will they be in half empty high streets, small out of town centres or very large centres? I would be betting on the large shopping centres, somewhere that it is worth the effort of going to.

I never imagined when Just Eat and its competitors started out that there would be the so called “dark kitchens” or that there would be “dark supermarkets”. So it seems likely that some stores will be operating as semi dark, local enough to act as a delivery hub as well as supporting walk through the door customers.

For the remaining space changing to hotel, office space and residential doesn’t seem imaginative but that doesn’t mean that it won’t be profitable.

Although a share issue is nowhere near being certain, it seems that the market is expecting it and at 32p the market cap is only £440 million. A two for one raise at no discount would bring in about £0.8 billion which for a company that has been mostly trading in the 200p-300p range would still leave room for a big share price rise to 70p-100p.

Although there is about 5.6% of INTU shorted this percentage has decreased slightly recently, possibly because further big drop from 32p is far from certain.

INTU is definitely on my watch list as a wait for the steady consistent drop to flatten out type of share.
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