Intu CEO Fischel to leave as shopping centre operator suffers loss

Intu Properties announced the departure of chief executive David Fischel as the shopping centre operator swung to a first-half loss caused by a fall in the value of its estate.

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In the six months to the end of June Intu recorded a pre-tax loss of £490m compared with a profit of £100m the year before. Revenue fell to £286 from 307m.

The loss was caused by a £617m fall in the estimated value of Intu’s property portfolio. Intu, which owns Manchester’s Trafford Centre, said the decline was caused by weaker expectations for the retail property market and uncertainty about the UK economy.

Net rental income fell to £223.1m from £226.2m, reflecting a £4m effect of disposals. Like-for-like growth was 1.3% and Intu warned the annual increase would be at the low end of its 1.5% to 2.5% target range. The company blamed retail tenants entering administrations and company voluntary arrangements.

Shares of the company, which dropped out of the FTSE 100 and into the FTSE 250 in 2018, fell 6.7% to 168p at 11:01 BST.

Intu’s results for the first half mark a shift in its message to shareholders. In April the company reiterated its guidance for net rental income growth and as recently as 14 June it published a glowing update on new tenants for its malls.

Fischel said: “During a period of weakening sentiment in the retail market which has impacted prime shopping centre valuations, Intu has delivered a resilient operational performance in the first half of 2018.”

Intu’s gloomier outlook follows the scrapping of its takeover by Hammerson in April. Hammerson pulled out of the deal under pressure from shareholders who opposed the company buying extra exposure to the squeezed middle-ground of Britain’s fragile retail market.

Intu said Fischel would have left if the Hammerson deal had gone ahead and that, after seven years in charge and 33 years at the company, it was time for a new boss. He will leave once the board finds a replacement.

Chairman John Strachan said: “The board is enormously grateful to David for agreeing to remain in post for a longer period than he had envisaged, giving the board sufficient time to search for a suitable successor. I would like also to extend my personal gratitude for the substantial contribution David has made to this business over many years."