Short-sellers smell blood at embattled shopping centre firm Intu
Short-sellers have been stepping up their bets against Intu in recent months, as they look to cash in on the embattled shopping centre owner’s current retail woes.
City punters have been circling the FTSE landlord, which recently appointed Matthew Roberts as its new boss, amid downbeat forecasts that the group’s rental income will slide as several of its flagship retail tenants eye possible closures.
Read more: Shares fall at shopping centre owner Intu as it warns on rental profit
According to public disclosures the amount of Intu’s shares that have been sold short has gone from just under 2.5 per cent at Christmas to more than six per cent now, with Marshall Wace and Crispin Odey’s investment vehicle both upping their bearish positions.
The Trafford Centre owner has attracted the gaze of hedge fund speculators amid the decline of major retail brands such as department store chain Debenhams and Sir Philip Green’s Arcadia, which account for roughly three per cent and four per cent of Intu’s rent roll respectively.
"Short-sellers are chipping away at Intu and the shopping centre landlord’s new chief executive, Matthew Roberts, will need to come up with a convincing new plan when he presents it alongside the interim results in late July if he is to fend them off," according to Russ Mould, investment director at AJ Bell.
Mould added: "The bears will think they are on the right track after Intu’s trading statement in May…The number of retailers undergoing CVAs (company voluntary agreements) will be hurting Intu, as this insolvency process allows financially-challenged companies to renegotiate debts and also rents."
Intu is one of several large FTSE bricks-and-mortar firms that has become the target of short-sellers, who look to capitalise on a company’s woes by betting that its share price will drop in the future.
Shares in the shopping centre giant closed at just over 97p at the end of trading last week, halving from their value this time last year and plunging by two thirds since the summer of 2016 as a series of failed takeover bids and continued troubles within the retail sector rocked investor sentiment.
Read more: Intu sells major stake in Derby shopping centre to cut debt
Earlier this month the property group suffered a further hit to its share price after forecasting its retail income for the year to decline by between four and six per cent, compared with its previous expectations of a one to two per cent drop.
Matthew Roberts, the former finance chief of Intu who has recently taken over as boss, said: “We expect the remainder of 2019 to be challenging due to a higher than expected level of CVAs and a slowdown in new lettings as tenants delay their decisions due the uncertainties in the current political and retail environments.”