Shares of Intu Properties plc — which runs 17 shopping centres including Manchester’s Trafford Centre and Arndale Centre, Newcastle’s Eldon Square and Gateshead’s Metrocentre — fell about 24% on Wednesday after it reported a fall in first-half net rental income.
In its half-year report, Intu forecast like-for-like net rental income down moderately in 2020 after a 7.7% fall in the six months ended June 30.
Net rental income for the six months was down 7.7% on a like-for-like basis to £205.2 million, driven by the impact of administrations and store closure programmes.
Last November, a consortium led by Intu’s deputy chairman John Whittaker scrapped a £2.91 billion takeover offer for the firm.
The consortium, which included Peel Group, the investment vehicle of the Whittaker family, Saudi Arabia’s Olayan Group and Canadian property investor Brookfield Asset Management cited “uncertainty around current macroeconomic conditions” for the withdrawal.
Liberum analysts said: “With no sign retail pressure is easing and full disposals proving hard to achieve there is little we believe management can do to ease pain in the near term making an equity raise more likely.”
Intu Properties plc CEO Matthew Roberts said: “The first half of 2019 has been challenging for intu.
“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.
“Over the past nine months we have carried out the most comprehensive review of the business that intu has 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 plays a vital role in retailers’ multichannel strategies and we are 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.”