2019 - Property ain't what its trumped up to be

Three numbers helped me avoid investing into the now bankrupt REIT (Real Estate Investment Trust) Intu Group (UK Listed)

Back in early 2019 I perused through the annual report for the year ending 2018.

Immediately I jumped to the financial statements as I almost always do.

The company looked extremely undervalued compared to the net asset value. (Balance Sheet)

I then turned to the cash flow statement and immediately after viewing the numbers, alarm bells rang 🚨🚨🚨

During the year intu had borrowed £302M & repaid only £204.3M. So far so good, BUT they also paid £187.6M as dividends.

This meant, Intu could not afford to pay the dividends to shareholders had they not borrowed money 🤯

The same scenario was played out in 2017 when they paid £188M in dividends.

Shortly thereafter management announced that they would cut the dividend...Needless to say this was the beginning of the end.

Next substack all being well will be a write of a small cap UK listed company trading in the single digits with shall we say not too bad prospects.