Shopping mall landlord Intu (INTU) achieved a 7.5 per cent increase in like-for-like rental income in the first six months of 2016, driven by higher occupancy levels and increased rent. A total of 98 long-term leases were signed at an average of 7 per cent above previous passing rent, and there is a strong pipeline of new lettings, with 106 leases currently with solicitors. Crucially, 27 of these exchanged after the EU referendum. The sharp fall in headline profits reflected a £131m revaluation deficit on derivative positions, mainly interest rate swaps.
Adjusted net asset value was flat at 405p a share, and a £55m like-for-like valuation surplus was offset by a £44m reduction in the value of the Charter Place extension to Intu Watford. However, this reduction is expected to reverse as the now demolished site is redeveloped. Completion is expected in late 2018, and the site is already 60 per cent pre-let.
Intu spent £410m in June acquiring the 50 per cent stake it did not already own in the Merry Hill estate, and with full ownership it can now start to re-engineer the tenant mix to boost value.
Analysts at Peel Hunt are forecasting adjusted net asset value at the December 2016 year-end of 373p, from 404p a year before.
| INTU PROPERTIES (INTU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 299.7p | MARKET VALUE: | £4.03bn | |
| TOUCH: | 299.5-299.7p | 12-MONTH HIGH: | 356p | LOW: 255p |
| DIVIDEND YIELD: | 4.6% | DEVELOPMENT PROP: | nil | |
| DISCOUNT TO NAV: | 18% | |||
| INVESTMENT PROP: | £10bn* | NET DEBT: | 92% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 356 | 266 | 20.4 | 4.6 |
| 2016 | 366 | 65 | 3.9 | 4.6 |
| % change | +3 | -76 | -81 | - |
Ex-div: 20 Oct Payment: 22 Nov *Includes investment in joint ventures | ||||
