The Week Ahead: Numis thinks there is scope for a return from IHG of a further $350m-$500m


Click to follow
The Independent Online

The City starts the week with some retail therapy as the shopping centres owner Hammerson today releases its full-year results.

Investors will be awaiting news from the property company, which back in 2012 decided to focus on retail and sell its office schemes, on its large retail developments, including its Les Terrasses du Port in Marseille, which is more than 90 per cent pre-let.

The Numis Securities analyst Chris Spearing expects it will release some news on its major London retail-led schemes in Brent Cross and Croydon. It has a good investment in the shape of a stake in the designer outlets specialist Value Retail, owner of Bicester Village.

Mr Spearing expects Hammerson’s overall results to be solid. The stock trades at a 4 per cent premium to net asset value, which is a modest discount to the 2 per cent premium for the large UK-listed real estate investment trusts.

Numis is predicting that Intercontinental Hotels Group will tomorrow unveil a pre-tax profit for 2013 of £582m, and the broker also expects IHG to continue to return cash to shareholders in the shape of a dividend. Last August IHG announced a $350m (£210m) special dividend to supplement a $500m share buyback programme, and Numis thinks there is scope for a return of a further $350m-$500m.

IHG has been selling off some of its trophy assets, but it has two more to go: the Intercontinental Paris Le Grand and the InterContinental Hong Kong, which could raise $1bn.

The only issue is concerns about a slowdown in emerging markets, which is something for investors to watch out for.

Sports Direct International was in focus last month after completing a complex shares swap with the department stores group Debenhams. Its trading update on Wednesday is likely to show that the king of cheap sportswear – founded by Newcastle United’s owner, Mike Ashley – is still growing strongly.

At the end of the week the media and events group Informa will publish its final results, the first under chief executive Stephen Carter. Numis expects continued healthy growth for the events business, and forecasts it will post a pre-tax profit of £310m on Friday.