Market report: Intu sends shock waves through retail

Retail
Retail-exposed shares fell during Wednesday’s session Credit: Victoria Jones/PA

It was a poor session for companies exposed to the UK’s shaky retail industry yesterday, as a sharp fall for Intu Properties sent shock waves through the wider sector.

The shopping centre operator, which owns the Trafford Centre in Manchester and Gateshead’s Metrocentre, fell 6.91p, or 17.2pc, to 33.33p, after warning it expected a hit to rental income.

The predicted fall came after a slew of retailers launched company voluntary arrangement (CVA) processes in order to renegotiate their rents. Deutsche Bank analysts warned the impact from CVAs had been “worse than expected”.

Shares in other retail landlords slipped on investor nerves that Britain’s long-suffering retail sector would continue to lead to lower rents and reduced property values.

In the FTSE 100, property developer British Land – which operates retail sites including the Surrey Quays shopping centre – fell 11.2p to 592.6p. Land Securities, which developed the Cardinal Place retail centre in Victoria, London, fell 8.8p to 907.8p.

In the FTSE 250, Hammerson – which operates Birmingham’s Bullring shopping centre – fell 7.2p to 283.5p.

The moves came on a mixed day for markets, with the FTSE 100 eking out a forth successive session of gains against a flat pound.

Imperial Brands was the biggest riser on the blue-chip index, with its shares gaining ground more confidently the day after the company blamed an “increasingly competitive environment” for a weak performance in its vaping division and suggested its performance issues will continue. It closed up 41.8p at £17.91.

Close on its heels was British Gas-owner Centrica, one of the top index’s smallest companies, which rose 1.56p to 72.56p. Its chief executive Iain Conn and chief financial officer Jeff Bell were praised in a Bloomberg note for their willingness to “show confidence” in the utility group by investing in its shares.

The biggest blue-chip loser by some distance was BT, after the owner of Virgin Media said it would cease piggybacking the telecom company’s network for its mobile phone customers, swapping to Vodafone instead. BT shares fell 9.46p, or 4.7pc, to 193.14p, while Vodafone firmed 0.46p to 162.44p.

Movements were fairly muted among mid-cap stocks, with Ultra Electronics leading risers on the FTSE 250 after reporting its order book development had remained steady since it last posted results.

Shares in the defence and aerospace company rose 76p, or 3.9pc, to £20.40 as it said: “The ongoing strategic evolution is progressing and there remains good long-term opportunities and growth potential for Ultra.

“Our major markets are growing and our strong technology base is positioning us well on existing and potential future programs.”

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