Friday, July 13, 2012

Mon 13 July morning report

Good morning, yes I'm back, having been able to drag myself out of the sick bay for the first time in ages. Battling a chest infection, but I seem to be winning at last.

A very quiet morning, but here are a few RNSs which caught my eye this morning.

Dunelm (DNLM) the homewares retailers which recently announced excellent sales growth, is hosting an analyst presentation -

Very good, but I hope they will also follow best practice by making the slides available to everyone on their website, or even better to put up a webcast of the presentation part of the meeting.

Yes the company is trading very well, but it looks pretty fully priced to me now. Let's hope HOME are looking closely at what Dunelm are doing, and making notes.

Capital & Regional (CAL) notes a fall in the value of it's The Mall fund. Hardly surprising, given that high street rents are now completely out of kilter with trading, and need to fall substantially. HOME indicated at their latest AGM that lease renewals are seeing average rental falls of 16%, so this is a timebomb for owners of retail property - who are squeezing tenants dry through their use of the awful, antiquated, 5-yearly upward-only rent review system. This consigns us to many more years of pre-pack administrations, allowing weak retailers to shed their loss-making shops with impunity, whilst the financially strong retailers are forced to bear the brunt of massively over-rented shops. All of which stifles innovation & new life coming through. No wonder our high streets are such dreary places these days, with the same boring identikit chains of shops everywhere. There's more of that to come I'm afraid, so companies like CAL are best treated with a bargepole in my view. They need to prop up the freehold values for the sake of their own balance sheet, but in doing so they are killing off the high street.

The high street needs a radical overhaul, with shorter leases, monthly rent payments, and rent being pegged at a percentage of turnover, flexible both up and down. That would give us back the vibrant and interesting high streets we want!

Nothing else to report, have a good day all!

Oh, if you haven't already seen it, check out my post from last night about company videos.

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