(Reuters) - The new chief executive of Intu Properties Plc cut the shopping centre operator’s rental income forecast on Friday, blaming a string of retail collapses and uncertainties stemming from Brexit for slowing down new lettings.
Intu shares tumbled more than 8 percent to 91.90 pence at 0725 GMT, taking the stock to the bottom of the midcap index. Rivals Hammerson Plc and British Land Co were down about 1 percent.
The company, whose properties include the Trafford Centre in Manchester, now expects net rental income for the year to decline between 4 percent and 6 percent, compared with its previous view of a decline of 1 to 2 percent.
“We expect the remainder of 2019 to be challenging due to a higher than expected level of CVAs and a slowdown in new lettings as tenants delay their decisions due the uncertainties in the current political and retail environments,” said Matthew Roberts, who was installed as chief executive last month.
Company voluntary agreements (CVAs) allow retailers to avoid insolvency by offloading unwanted stores and securing lower rents on others.
“Intu Properties has delivered a nasty surprise with a profits warning that shows it is struggling more than thought with the slowdown on the high street,” Markets.com chief markets analyst Neil Wilson said.
Intu is looking to preserve cash and reduce its debt by selling assets after it became a target of two failed takeover bids last year amid a difficult retail environment.
Its share price has more than halved since Hammerson walked away from a bid in April 2018.
The company operates 17 shopping centres in Britain and three of the 10 largest malls in Spain.
It has been facing the brunt of high profile retail closures and CVAs in Britain that include Toys R Us, House of Fraser, New Look and HMV.
Most recently Debenhams, contributing 3 percent to Intu’s rent, announced a CVA.
Former CFO Roberts, said on Friday his priority was to cut the company’s sizeable debt, adding that the recent sale of a stake in a shopping centre in the central English city of Derby for 186 million pounds was a “positive first step”.
Intu on Friday said it continues to explore disposal options for its Spanish centres.
Reporting by Samantha Machado in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta