Intu Properties: Somewhat old, somewhat tired
New ideas are needed and some fund managers say the whole management team should leave with the CEO
Intu Properties needs new blood if it wants to compete with other UK and European mall owners.
Last week the UK and Spanish shopping centre owner released financial results which were among the most disappointing of the season so far. The group, which owns R167bn worth of assets, saw its net asset value per share fall 24% in the year to December to 312p. Its share price is down about 4% year to date and 68% over the past three years.
Yet management, led by CEO David Fischel, said it was happy with the results given how UK retail is in a state of flux with more people buying online and some retailers struggling to adapt. Brexit uncertainty has also placed pressure on property prices and dented consumer confidence.
With a share price of R20.68, Intu is also trading at an unprecedented discount to net asset value of about 65%.
Shareholders must be getting tired of management blaming a weak consumer environment and political uncertainty for Intu’s underperformance.
Fischel, who has been CEO since 2001, was supposed to leave at the end of 2018. He has been instrumental in building the company’s portfolio to include some high-end malls, but new ideas are needed and some fund managers say the whole management team should leave with him.
This may be best achieved through a takeover and a restructuring of the company’s portfolio.