Growth out­look slows

Finweek English Edition - - Companies&markets -

IT AP­PEARS that Foun­tain­head – which fea­tured on a num­ber of stock-pick­ing lists ear­lier this year – has lost favour among fund man­agers. The share has been sold down quite ag­gres­sively in re­cent weeks, with its price slid­ing around 7% since early April. A key con­cern is the rede­vel­op­ment of the 48 000sq m Blue Route Mall in Tokai, Cape Town, one of Foun­tain­head’s top five prop­er­ties in its R7,76bn prop­erty port­fo­lio. The shop­ping cen­tre faces a R780m over­haul, sched­uled to be­gin in June, which will ef­fec­tively take the prop­erty and its rather sub­stan­tial in­come stream out of the mar­ket for the next two years, re­sult­ing in a sig­nif­i­cant di­lu­tion in in­come pay­outs to share­hold­ers.

When in­terim re­sults were an­nounced on 30 April, man­age­ment said growth in dis­tri­bu­tions was ex­pected to slow to 4% for the year to end-Septem­ber 2010, down from 8,1% in 2009. Ear­lier this year most an­a­lysts were still fore­cast­ing Foun­tain­head’s dis­tri­bu­tion growth for 2010 to be around 7% to 8%.

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