Merry Hill owner's shares slump.
Byline: Report by Thom Kennedy email@example.com
Shares in Intu slumped after the Merry Hill Shopping Centre owner revealed the toll the retail crisis is taking on its business.
Rental income across its estate has fallen by 7.7 per cent in the six months to June 30, to PS205.2 million.
It comes as retailers increasingly find themselves closing stores and facing administration.
Chains including LK Bennett, Bathstore, Select, and Pretty Green have entered administration this year, resulting in store closures.
Meanwhile, Topshop owner Arcadia, Monsoon Accessorize and Debenhams are among those to have sought a Company Voluntary Arrangement (CVA) allowing them to pay lower rents and shut unprofitable sites.
Intu's property portfolio took a hit to its valuation, declining by 8.8% to just under PS8.4 billion.
Occupancy at Merry Hill remains at 93 per cent, but a revaluation of the property has downgraded its overall worth by nine per cent to PS707 million.
New chief executive Matthew Roberts, who took over as chief executive in April, said: "We have experienced further downward pressure on likefor-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."
He added that, following a review of the business, Intu has developed a five-year strategy to tackle changes in the industry.
"Regardless of current sentiment, one thing is clear: the physical store is not dying, it is evolving," said Mr Roberts.
Investor spirits were low after the update, with Intu shares dropping 21.4% in early trading.
Analysts at Liberum called it an "awful" first half and said: "There is little we believe management can do to ease pain in the near term."
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|Publication:||Shropshire Star (Shropshire, England)|
|Date:||Aug 1, 2019|
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