(Reuters) - Intu Properties’ (INTUP.L) chief executive officer is stepping down as the British shopping centre operator swung to a loss and warned of lower rental income growth for the full year, sending its shares down 9 percent to a record low.
Intu’s update follows a failed 3.4 billion-pound takeover bid by rival Hammerson (HMSO.L) in April and a string of bankruptcies of retailers that has hit the company hard.
The company said it now expects like-for-like net rental income growth to be at the lower end of its previous range of 1.5 percent to 2.5 percent.
Intu warned in April that it would be hit by a number of administrations and restructurings initiated by tenants, including New Look, Toys R Us and Prezzo, estimating the impact to be about 3.9 million pounds in 2018.
The owner of Manchester’s Trafford Centre also posted a loss attributable of 486.2 million pounds in the first-half, compared with a profit of 127.1 million pounds year ago. Underlying earnings were flat during the period.
“Intu’s H1 results reveal marked valuation pressure on its shopping centres, over and above that experienced by Hammerson and Land Securities (LAND.L),” Liberum analysts said in a note.
Fischel, who will leave Intu once a successor is appointed, was earlier expected to stand down upon the completion of the proposed Hammerson merger.
“The retirement of long-standing CEO David Fischel could present opportunity for his successor to revisit the group’s strategy and help improve the market’s current poor perception of its assets and direction,” Liberum said.
Hammerson’s board made a U-turn on the deal in April in the face of opposition from its own shareholders amid concerns that buying Intu would increase the company’s exposure to Britain’s retail sector.
To calm shareholders, Hammerson on Tuesday said it aims to exit its out-of-town retail parks business as part an overhaul.
Shares of Intu fell 8.6 percent to an all-time low of 164 pence in early trading in London.
Reporting by Justin George Varghese in Bengaluru; Editing by Amrutha Gayathri and Saumyadeb Chakrabarty