Intu consider February equity raise to fix balance sheets

Intu consider February equity raise to fix balance sheets

Intu Properties (LON:INTU) have told shareholders on Monday that they are considering an equity raise at the end of February.

Intu have seen a turbulent few months of trading, and the firm said that the discussions over the equity raise will allow to fix its balance sheets.

Reports said that the firm was looking to raise around £1 billion to help it through its testing times, and shareholders are being actively considered within discussions.

Matthew Roberts, Intu Chief Executive, commented:

“We have delivered a robust operational performance for 2019 finishing with a busy Christmas trading period. Total footfall in 2019 was 0.3 per cent ahead of 2018, flat in the UK which significantly outperformed the Springboard footfall monitor for shopping centres.”

“Occupancy was stable at 95 per cent and to date 97 per cent of rent has been collected for the first quarter of 2020 demonstrating the lower risk of our existing customer base.”

“We are making good progress with fixing the balance sheet, our number one priority, and are confident we have the right strategy in place to enable us to prosper as we see continued polarisation between the best destinations and the rest.”

Intu’s income expectations fall

At the start of November, Intu saw their shares crash after expectations for revenue income have fallen for financial 2019.

The retail property giant said that forecasts for 2019 like-for-like net rental income was likely to be down by roughly 9% compared to last year, alerting shareholders.

New rent in the nine months to 30 September 2019 hit £19 million, falling from £32 million during the same period last year.

On a positive note for the property firm, footfall rose 0.9% “significantly outperforming Springboard footfall monitor for shopping centres which was down on average by 2.4 per cent”, the group said.

In their third quarter update, Intu reported that 7 long-term leases amounting to £5m in annual rent, compared with 84 leases equalling £15m in annual rent in the same period a year ago.

NewRiver REIT deal

NewRiver Reit PLC (LON:NRR), a rival of Intu’s reported that they had purchased a Northern Irish retail park from Intu for £40 million.

The park has 231,000 square foot of retail space as well as 1,200 car park spaces and 18 acres of development land.

We are pleased to announce that we have exchanged contracts to acquire Sprucefield Retail Park,” NewRiver Chief Executive Officer Allan Lockhart said.

“This high-quality asset will generate £3.7 million of annualised net property income, which will be highly accretive to underlying funds from operations and significant in improving our dividend cover, which is our key priority.”

“In addition to an attractive long-term income return, the development land offers the opportunity to deliver significant capital growth, leading to a very attractive total return,” Lockhart added.

Intu Chief Executive Officer Matthew Roberts said: “We announced our new strategy at the interim results in July. A key element of this is fixing the balance sheet which includes creating liquidity through disposals. We are pleased to conclude this transaction, which along with the part-disposal of Intu Derby and other sundry asset sales in 2019 brings the year to date disposals total to £268 million.”

Shares in Intu trade at 21p (-6.74%). 20/1/20 12:34BST.