Intu slides after calling for funds to tackle debt
It LOOKED like much of the bad news had already been priced in when Intu Properties, owner of trafford Centre and Newcastle’s Eldon Square, went public with its desire to raise funds to shore up its rickety balance sheet.
the shares shed 2.5pc in early trading after it confirmed it is in ‘constructive discussions’ with shareholders and potential new investors who are being asked to back the cash call.
According to one weekend report, Intu is looking for £1bn of emergency cash.
While it is an eye-watering sum, it may not cut the mustard. According to City broker Peel Hunt, an injection of the order talked about would leave Intu ‘arguably still over-levered’.
Fundamental changes in shopping habits resulted in the first fall in retail sales in more than a quarter of a century last year, according to the British Retail Consortium.
this dramatic shift towards online outlets has had a knock-on impact on landlords such as Intu, which have seen toys R US,
Debenhams, House Of Fraser, New Look and HMV either fail or shrink their bricks-and-mortar presence.
Intu’s share price has reflected the retail industry’s changing fortunes. Last January its stock was worth around 120p, while it was more than 400p at its peak around a decade ago.
Last night it closed down 1pc, or 0.23p, at 22.63p.
It was a quiet start to the week for Britain’s blue- chips with the
FTSE 100 drifting down 0.3pc, or 23.12 points, to 7651.44. Wall
Street was closed for Martin Luther King Day. topping the UK index was BAE
Systems (up 3.7pc, or 23p, at 647.6p) after the City gave its seal of approval to a proposed £1.5bn deal to snap up the military guidance business of US manufacturer Collins Aerospace.
Elsewhere, Goldman Sachs took a forensic look at the media sector, which it said is primed for earnings growth coupled with merger and acquisition activity.
Upgraded to ‘buy’ was used car listings site Auto Trader (up 1.8pc, or 10.2p, to 583.6p), while Relx, the publisher formerly known as Reed Elsevier, was among Goldman’s top picks. It finished down 0.5pc, or 9p, at 1995p.
WPP, meanwhile, was downgraded to ‘ neutral’ with the risk and reward of investing in the advertising group now ‘more balanced’. the shares slipped 0.2pc, or 2p, to 1017.5p.
Among those stocks rated ‘sell’ by Goldman was the struggling school and college books firm
Pearson. It ended the day flat at 588.6p, supported by whispers that it may be the subject of a break-up bid.
Sticking with the London arm of the US investment bank, but moving sectors, Goldman gave a nudge to shares in builder Barratt
Developments (up 2.1pc, or 17p, at 818.4p) as it raised its recommendation to ‘neutral’ from ‘sell’.
Convatec, the wound care specialist and maker of stoma bags, fell 3.4pc, or 7.3p, to 205.5p on a downgrade to ‘ underweight’ by JP Morgan Cazenove to reflect the potential failure risks allied to the company’s turnaround plans.
Dropping down into small-cap territory, junior explorer Rockfire soared 30.3pc, or 0.25p to 1.07p as it began a new round of drilling at its Plateau gold project in Queensland, Australia, in a bid to expand its resource estimate at the site. Immunotherapy specialist Scancell jumped 17.6pc, or 1.1p, to 7.35p following a deal that will see a US antibody company use its Avidi Mab technology to research potential cancer treatments.