Section:GDN 1N PaGe:31 Edition Date:190801 Edition:01 Zone: Sent at 31/7/2019 20:00 cYanmaGentaYellowb
Thursday 1 August 2019 The Guardian •
Financial^31
Intu shares fall 30%
in a day after rental
income warning
Sarah Butler
Shares in Intu Properties, the shopping
centre company that owns the Traf-
ford Centre in Manchester and Merry
Hill in Birmingham, have crashed to a
record low after it said it might need
to raise fresh cash to reduce a £4.7bn
debt mountain.
The 30% fall in the share price yes-
terday wiped more than £200m off
the company’s market value after Intu
reported widening losses, scrapped its
dividend and warned that rent from
shops would fall this year and next.
Intu’s rent income in the fi rst half
of 2019 fell by 18% to £205m after a
string of retail restructures by clients
including New Look, Topshop’s owner
Arcadia, Debenhams and House of
Fraser. Its losses rose to £856.4m in the
six months to 30 June, from £506.5m
in the same period of 2018.
Matthew Roberts, the chief execu-
tive , said the fi rst half of the year had
been “challenging”, marked by falling
like-for-like rental income and prop-
erty values. “ But we know radical
transformation is required,” he said.
Roberts’ new five-year strategy
involves transforming parts of Intu’s
shopping centre estate into 6,000
homes, seven hotels and hot- desking
offi ces as it tries to turn space left
empty by retail collapses into thriv-
ing communities.
Intu has applied for planning per-
mission to create more than 1,000
homes at its Lakeside shopping cen-
tre in Thurrock, which would require
the demolition of a House of Fraser
store and two car parks.
It is considering building homes at
other large out-of-town malls, includ-
ing the Traff ord Centre and Braehead
in Glasgow. Roberts said: “Regard-
less of current sentiment, one thing is
clear: the physical store is not dying, it
is evolving. The right store in the right
location still plays a vital role in retail-
ers’ multichannel strategies.”
He said online companies such as
the Chinese multinational Alibaba
were looking for physical sites, as were
new leisure brands such as the crazy
golf operator Puttshack. “Change will
not happen overnight, but I am confi -
dent we have the right plan in place
and an energised, dynamic team to
deliver it,” Roberts said.
Improving the balance sheet was
a priority, he said, adding that Intu
would keep all options under review ,
including raising more cash from
shareholders. The company has
£926m of debt, which matures in 2021.
It expect s to make “material progress”
on reducing that in the next year.
Roberts said raising equity was “the
last thing we’ll get to” as the company
was focusing on other self-help meas-
ures, including a reduction in capital
expenditure, the disposal of Spanish
assets – which could raise up to £300m- and removing 45 management posts
to give an annual saving of £5m. Like-
for-like net rental income was down by
7.7% and valuations fell by about 10%.
That was well ahead of a 3.1% fall in
net rental income reported by Unibail-
Rodamco-Westfi eld , the owner of the
Westfi eld shopping centres in Strat-
ford and Shepherd’s Bush, London,
for the six months to 30 June reported
yesterday. Westfi eld said 8.7% of its UK
retail space was empty after retailer
bankruptcies and the delays to signing
new leases amid Brexit uncertainty.
Analysts at Peel Hunt said it would
be in everyone’s interests if a partner
could be found to take Intu private.
Matthew Saperia , a property analyst ,
said Roberts’ plans were not very rad-
ical and investors would be focusing
on the debt for the foreseeable future.
Ladbrokes to pay out £5.9m over
fail ure to help problem gamblers
Rob Davies
Ladbrokes Coral will pay a £5.9m pen-
alty, one of the largest imposed by the
Gambling Commission, over its failure
to protect problem gamblers.
The regulator detailed a litany of
transgressions between 2014 and 2017.
When the company became aware of
the problem, it simply reduced the
number of its customers it deemed
“high risk”, the investigation found.
“These were systemic failings at a large
operator, which resulted in consum-
ers being harmed and stolen money
fl owing though the business, and this
is unacceptable,” said the regulator’s
executive director, Richard Watson.
The failures include neglecting
to ask one customer who lost £1.5m
over three years about their source of
funds, despite clear signs of problemgambling such as logging into their
account 10 times a day and losing
£64,000 in a month.
The bookmaker, owned by the Isle
of Man-based fi rm GVC, also identifi ed
“signifi cant concerns” about a cus-
tomer but continued to allow them to
place large wagers.
The failings continued even after
the company and its management
should have known about them, thecommission said, adding that it was
still investigating individuals who
could lose their licence to operate.
As part of the settlement, GVC will
pay £4.8m towards responsible gamb-
ling causes and will forfeit £1.1m to
“aff ected parties”. It will also review
the top 50 customers for the years 2015
to 2017 to consider whether further
failings can be identifi ed.
GVC’s chief executive, Kenny Alex-
ander, said it discovered “historic
compliance failures” after buying Lad-
brokes Coral for £3.2bn in 2018. “Since
the acquisition I have overseen a sys-
tematic review of the enlarged group’s
player protection procedures and the
individuals responsible for theseproblems have exited the business,”
he added.
The Labour MP Carolyn Harris, who
leads a cross-party group on problem
gambling, said : “Every day I hear from
individuals and families whose lives
have been blighted by the industry’s
quest for profi t and its disregard for
customers. Although this is a substan-
tial fi ne, to Ladbrokes Coral it’s loose
change and I doubt they will learn any
lessons.”
GVC said it had made signifi cant
investments to improve checks to
ensure customers can aff ord to bet,
including a fi ve fold increase in staff
dedicated to compliance and respon-
sible gambling.Source: RefinitivIntu Properties shares fell more
than 30% yesterday
Pence01002003004002015 2016 2017 2018 2019Boost for Next as
buoyant sales defy
high street gloom
Sarah ButlerNext has shrugged off a damp start to
the summer with better than expected
sales at its high street stores.
Bucking the trend of a tough
trading environment , Next raised
annual profi t expectations by £10mto £725m as full-price sales rose by
4% in the three months to 27 July. It
had expected a 0.5% fall. “We weren’t
expecting this quarter to be as good
as it has been,” said Simon Wolfson,
Next’s chief executive. “Partly we may
have over estimated the benefi t we had
last year from the good weather.”
Shares in the company rose 8% to
£60.94 after the update, making it the
top riser on the FTSE 100.
Sales in Next stores fell by 4.2%, less
than half the rate expected by analysts.
Wolfson said the group’s Label busi-
ness, which sells brands including Ted
Baker and Joules online and via a cat-
alogue, had performed well, helpingdrive 12% total growth online. Next
now expects full-price sales to rise by
3.6% for the full year, just over double
the previous estimate.
Many other retailers on the high
street, including Debenhams , Top-
shop and New Look, have been clos ing
stores and asking landlords for rent
cuts. Sofi e Willmott of GlobalData ,
a market analysis fi rm, said: “Next’s
current performance is not an indica-
tor for its mid-market competitors as
the retailer continues to outperform.”
Willmott said Next’s click and col-
lect services and eff orts to reinvent its
stores by adding a range of concessions
had helped attract shoppers.£64,000
The amount lost by one Ladbrokes
customer in a month, and who lost
a total of £1.5m over three years▼ Fashion from Next’s autumn 2019
collection: the retailer expects full-
price sales to rise by 3.6%, double the
previous estimate PHOTOGRAPH: NEXTРЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS