Intu Properties net rental income falls as market conditions remain tough
Intu Properties reported a £17.9m fall in its net rental income for the six months ended 30 June on Wednesday, to £205.2m, while its underlying earnings slid £32.1m to £66.4m.
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The FTSE 250 retail property group said its underlying earnings per share were 2.4p lower at 4.9pm, which the board explained was in line with the reduction in its underlying earnings.
Its property revaluation deficit widened to £872.1m from £650.4m, while its IFRS revenue was off £6.2m at £279.9m, which Intu said was due to the reduction in rents received.
The IFRS loss for the period deepened by £343.4m to £829.6m, which the board said was adversely impacted by its revaluation deficit, as well as a change in the fair value of its financial instruments.
Intu’s IFRS basic loss per share was 61.7p, which was 25.5p wider than the same period in the 2018 financial year, which was in line with the total IFRS loss for the period.
“The first half of 2019 has been challenging for Intu,” said chief executive officer Matthew Roberts.
“We have experienced further downward pressure on like-for-like net rental income and property values resulting from a higher level of administrations and CVAs as some retailers struggle to remain relevant in a multichannel world.
“These challenges, facing Intu and the whole sector, have been well-documented and, while there are no quick fixes, I am confident that we can address them head on.”
Roberts said that over the past nine months, the firm had carried out the “most comprehensive” review of the business that it had ever undertaken.
“We know radical transformation is required and have developed a new, ambitious five year strategy to reshape our business and address the challenges we face, with a priority to fix our balance sheet.
“With the people changes we have made, we now have the right leadership team in place with the appropriate skill sets to deliver this plan and drive the business forward.
“Regardless of current sentiment, one thing is clear: the physical store is not dying - it is evolving.”
The right store in the right location still played a “vital role” in the multichannel strategies of retailers, Roberts explained, adding that the company was starting to work with them as partners, sharing the risks and rewards.
“Our centres will also transform as we turn them into thriving communities - places where people want to live, work and have fun, as well as shop.
“Change will not happen overnight, but I am confident we have the right plan in place and an energised, dynamic team to deliver it.”