Intu Properties results and market reaction reflect retail woes – The shares of the shopping centre-focused real estate company, Intu Properties (INTU), are down by 17.6% this morning (at the time of writing), after it published its half-year results to 30 June 2019.
Headline numbers reported this morning include:
- Net rental income £205.2m: -17.9% (-7.7% on a like-for-like basis) year-on-year (y-o-y)
- Underlying earnings £66.4m: -31.21% y-o-y
- Property values £8.4bn: -9.6% y-o-y
A lot of retailers struggling for relevancy
Matthew Roberts, INTU’s CEO, had this to say: “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 company voluntary arrangements (CVAs) as some retailers struggle to remain relevant in a multi-channel 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’ multi-channel 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..”
INTU owns and manages shopping centres in the UK and Spain. The company’s UKis made up of 17 centres, and in Spain they own three centres, with advanced plans to build a fourth. They focus on prime, high-footfall flagship destinations
According to the company, its centres attract around 400mn customer visits and 26mn website visits a year. Our strategic focus on prime, high-footfall flagship destinations. INTU’s centres support nearly 130,000 jobs (representing about 3 per cent of the total UK retail workforce).
INTU: Intu Properties results and market reaction reflect retail woes