Intu withholds dividend again as earnings slump
Intu is not paying an interim dividend to its shareholders, as its earnings per share and portfolio values slide again amid ongoing turmoil in the retail sector.
EPRA NNNAV per share plunged by 22.5% to 210p in the six months ending 30 June, compared with the same month last year. Portfolio valuations across its UK shopping centres were down by 10.4% on a like-for-like basis, with all centres impacted by similar amounts of 9% to 11%.
Like-for-like rental income during the period fell by 7.7% to £205.2m. The effect of administrations and CVAs was 4.3%, largely caused by insolvency proceedings at House of Fraser, HMV and New Look Men in 2018.
Intu is not paying an interim dividend to its shareholders, as its earnings per share and portfolio values slide again amid ongoing turmoil in the retail sector.
EPRA NNNAV per share plunged by 22.5% to 210p in the six months ending 30 June, compared with the same month last year. Portfolio valuations across its UK shopping centres were down by 10.4% on a like-for-like basis, with all centres impacted by similar amounts of 9% to 11%.
Like-for-like rental income during the period fell by 7.7% to £205.2m. The effect of administrations and CVAs was 4.3%, largely caused by insolvency proceedings at House of Fraser, HMV and New Look Men in 2018.
The landlord calculated a revaluation deficit of £872.1m across its properties, resulting in a like-for-like reduction of 9.6%, and a 23bps outward yield shift from weakening investor sentiment.
Pro forma debt-to-assets ratio stood at 57%, up from 53.1%, which was blamed on reduced property values.
The REIT has outlined four key aims, as part of a five-year strategy: fixing its balance sheet, simplifying the business and driving efficiencies, sharpening its focus on customers and transforming its centres.
During the period, intu sold its stake in its Derby mall for an initial consideration of £108.7m and a further £12m in sundry assets. An additional £24m has exchanged for completion in H2 2019.
However, it has struggled to make a chunkier disposal within the timeframe. The REIT said it is currently in the second round of the sales process for its stakes in two of its Spanish assets, intu Asturias and intu Puerto Venecia.
On a pro forma basis, net external debt tallied £4.7bn.
Intu said it is looking to make material progress over the next six to 12 months, adding that it will “keep all options under review”, from “self-help measures” including disposals and withholding the dividend payment, “through to raising equity”.
Matthew Roberts, chief executive, said: “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.
“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.
“Change will not happen overnight, but I am confident we have the right plan in place and an energised, dynamic team to deliver it.”
See also: Q&A: Matthew Roberts, incoming chief executive, intu
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