Shares to buy, hold and sell: Martin Cholwill


Intu Properties was the result of a rebranding of Capital Shopping Centres at the beginning of 2013; it owns 10 of the top 30 regional shopping centres in the UK, including Essex's Lakeside and Manchester's Trafford Centre.

The most attractive thing about these centres, explains Royal London UK Equity Income fund manager Martin Cholwill, is that they have very high occupancy rates. Whereas the high streets are suffering from a steady decline, these "destination" centres are going from strength to strength. "People like to go shopping; not everything is going to be bought on Amazon," says Cholwill.

He has been buying the shares over the past few months; they have been "very dull" in recent years, trading at a discount to net asset value (NAV) of around 15%. But with a dividend yield of 4.7%, they are now appealing to income funds looking for a sustainable dividend with the potential for growth.


Although many people may not have heard of Restaurant Group, the likelihood is they will be familiar with the Frankie & Benny's and Chiquito outlets, just two of the popular brands the company owns.

There are two parts to the group's business, says Cholwill: the restaurants located on leisure parks alongside cinemas and bowling alleys, and those based in airports, where "there are limited things to do: shopping and eating". Because of this, Restaurant Group's branches tend to enjoy a continual turnover of table covers.

Cholwill adds that the "eating out industry" has not suffered during the recession. While some pubs or other chains have fallen by the wayside, Restaurant Group has benefited because of its strong balance sheet, allowing it to expand steadily in the past few years. "You'll notice that these restaurants don't do much of the voucher business that other high-profile chains rely on," points out Cholwill.

Eating in these restaurants is, he says, a relatively small-ticket thing, which has added to the group's success. The share price has tripled over the past five years, although he adds that this achievement has piqued investor interest and the dividend yield has inevitably fallen, to 2.4%.

Cholwill thinks the company is still likely to outperform its peers in the next five years, but he rates it as a hold rather than a buy at the moment, with the shares priced around 540p, having risen from just 355p a year ago.


While the national newspaper may be the most high-profile part of the DMGT business, it is not the area that interests Cholwill the most. DMGT also owns online estate agent Zoopla, and while he won't go as far as calling the market a duopoly between Zoopla and Right Move, he maintains there is little room left in the online estate agency world for any competitors. "I thought it [Zoopla] was an attractive hidden gem in the group," he says of his decision to purchase DMGT shares around four years ago.

The group also has a strong web presence across its businesses, despite being "a late starter".

Cholwill says the Daily Mail's website is one of the most widely read English- language news outlets in the world, and has been successfully monetised too. "But that hidden value has been recognised now," he continues, explaining his decision to take profits over the past few months, which has seen him halve his holding.

The dividend yield has fallen from 4.5% when he first bought into the stock, to around 2.5% today. The shares are currently trading at around 863p, up from 500p just a year ago.

This features was written for our sister publication Money Observer