July 31, 2019 / 6:54 AM / 3 months ago

UPDATE 1-Britain's Intu warns on 2020 income as retail failures take toll

(Adds details on retail failures, dividend, CEO comment)

July 31 (Reuters) - British mall operator Intu Properties Plc reported a drop in first-half net rental income on Wednesday, hit by a raft of retail failures, and said it expects like-for-like net rental income to be moderately down in 2020.

The owner of the Trafford Centre in Manchester has faced the brunt of high-profile closures and company voluntary agreements (CVA), including Debenhams, Toys R Us, House of Fraser, New Look and HMV, that have exacerbated troubles on Britain’s high street.

Shares in Intu were seen falling 10% by traders.

Intu said it expects like-for-like net rental income, which fell 7.7% in the six months ended June 30, to be at a similar level for the rest of the year.

The company, which has been looking to preserve cash and reduce its debt by selling assets, said it has removed around 10% of its management roles since the end of June, saving 5 million pounds in cash annually.

Intu also scrapped its dividend earlier this year, allowing it to invest in its malls. The company said on Wednesday that it would not pay a dividend for the time being to retain cash within the business.

Intu said net rental income fell 17.9% to 205.2 million pounds ($249.52 million) in the first half.

“The first half of 2019 has been challenging for Intu. We have experienced further downward pressure on like-for-like net rental income and property values resulting from a higher level of administrations and CVAs,” Chief Executive Officer Matthew Roberts said in a statement.

$1 = 0.8224 pounds Reporting by Tanishaa Nadkar and Noor Zainab Hussain and additional reporting on Samantha Machado in Bengaluru; Editing by Shounak Dasgupta

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