INTU.L Share News (INTU)

(Sharecast News) - Intu Properties reported a fall in earnings in its audited results for 2018 on Wednesday, with the underlying figure dropping to £193.1m from £201m in the prior year.The FTSE 250 shopping centre operator said its property valuation deficit was £1.41bn in the year ended 31 December, swinging from a property valuation surplus of £47.3m in 2017.Its IFRS loss for the year was £1.17bn, compared to a profit of £203.3m a year earlier, while underlying earnings per share totalled 14.4p, down from 15p.On the operational front, like-for-like net rental income growth was 0.6%, accelerating slightly from the 0.5% growth reported in the prior comparative period, although occupancy fell slightly to 96.7% from 97%.Intu reported 248 leasing events comprising £39m in new rent during the year, up from 217 events and £38m a year earlier.New rent relative to passing rent was up 6%, slowing from 7%, while uplift on rent reviews settles slowed to 7% from 9%.Net rental income totalled £450.5m, slipping somewhat from £460m.The market value of Intu's investment and development property was £9.17bn, down from £10.53bn, with net external debt widening slightly to £4.87bn from £4.84bn.IFRS net assets attributable to the owners of Intu fell to £3.81bn from £5.08bn, with the firm's net asset value per share slipping to 312p from 411p.EPRA triple net asset value per share slid to 271p from 349p, with the company's debt-to-assets ratio rising to 53.1% from 45.2%."Intu has had a challenging year with a difficult retail and uncertain economic environment, together with responding to two abortive corporate offers for the company," said the firm;s chairman John Strachan."However, our management team has produced a robust operational performance with increased like-for-like net rental income for the fourth consecutive year, 97% occupancy and signed 248 new long-term leases."This outcome is testimony to our long-term strategy of investing in our centres and the intu brand, making them different, attractive and exciting so retailers look to our centres as key trading locations"Strachan said the company's three core objectives for the year ahead were to continue to deliver "strong" underlying individual centre performance, continue its strategy of adapting to the changing retail environment, and to make "smart use" of capital."We propose to reduce our debt to assets ratio over time back below 50% by further disposals and part-disposals and retaining the cash generated by our activities rather than distributing it as dividend, to enable us to invest in our winning destinations."I would like to thank our strong management team for their dedication and commitment in a difficult economic environment as we focus on making intu centres winning destinations for brands and shoppers."David Fischel, Intu's chief executive, added that the company again delivered a "resilient" operational performance, which he claimed demonstrated how its centres differentiated themselves as "winning destinations" for retailers with their "variety and excitement"."We own and manage many of the best shopping centres, in some of the strongest locations, in the UK and Spain," Fischel said."In a difficult year for the whole UK retail real estate sector and with very limited comparable transactional evidence, property valuations declined as sentiment weakened significantly."We reported a further 3% fall in valuations in the final quarter of 2018, additional to the 9% fall over the first nine months of the year."That resulted in the fall in EPRA NNNAV at the end of year, Fischel said."Although sentiment in the retail sector is at an all-time low, the reality is that around400 million shoppers visit our centres each year and occupancy is at 97%."As some 85% of all retail transactions still touch a physical store, demand from major retailers continues to be positive for our centres."New tenants to the firm's centres included Abercrombie & Fitch, Uniqlo, Bershka, and Monki, with established retailers such as Next, Primark, Zara and River Island all upsizing, according to David Fischel."Our tenants invested a record £144 million in their stores over the year, a clear indication that these retailers see great physical space as a key part of a successful multichannel strategy."