Intu posted a deeper loss before tax on Wednesday in its half year results as changes to the retail environment weigh.
Shares in the business were trading over 23% lower following the announcement.
The shopping centre landlord said that loss before tax deepened to £856.4 million during the six months ended 30 June, down even further from the £506.5 million figure for the same period in 2018.
Net rental income decreased by 17.9% to £205.2 million, and 7.7% on a like-for-like basis. Intu added that it expects this decline to run at a similar level through the remainder of the year as the impact of recent administrations and CVAs are resolved.
In order to reduce net external debt, the company has been forced to cut its dividend for 2019.
“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,” Matthew Roberts, Intu Chief Executive, commented on the results.
“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,” Intu’s Chief Executive continued.
The shopping centre landlord drew upon recent concerns surrounding the “death of the store” as consumers seek online shopping alternatives to brick-and-mortar shops.
Intu affirmed “the right stores in the right locations still play a vital role for retailers” as 85% of all retail transactions still touch a physical store.
Indeed, the challenging retail environment to have hit the UK high street has been well documented by several retailers as they see staff cuts and store closures.
“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,” Intu’s Chief Executive added.
Shares in Intu Properties plc (LON:INTU) were trading at -23.46% as of 11:56 BST.