Wrap Text
Interim Report for the Half Year Ended 30 June 2014
INTU PROPERTIES PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: ITU
Press Release
31 JULY 2014
INTU PROPERTIES PLC
INTERIM REPORT FOR THE HALF YEAR ENDED 30 JUNE 2014
David Fischel, Chief Executive, commented:
"Intu has recorded a strong first half performance with a 7.6 per cent like-for-like valuation
uplift, increasing net asset value per share to 372p and taking the overall market value of our
prime UK shopping centres to GBP8.8 billion. The initial indications from the major centres we
acquired in the period, now rebranded as intu Merry Hill and intu Derby, are very positive.
The letting market is showing encouraging signs of improvement and we are gaining further
momentum with our GBP1.2 billion active management and development pipeline."
A presentation to analysts and investors will take place at UBS, 1 Finsbury Avenue, London EC2 at 09.30BST on 31 July
2014. The presentation will also be available to international analysts and investors through a live audio call and webcast.
The presentation will be available on the Group's website intugroup.co.uk. A copy of this announcement is available for
download from our website intugroup.co.uk.
Enquiries:
Intu Properties plc
David Fischel Chief Executive +44 (0)20 7960 1207
Matthew Roberts Chief Financial Officer +44 (0)20 7960 1353
Adrian Croft Head of Investor Relations +44 (0)20 7960 1212
Public relations
UK: Michael Sandler/Wendy Baker, Hudson Sandler +44 (0)20 7796 4133
SA: Frédéric Cornet/Nick Williams, Instinctif Partners +27 (0)11 447 3030
NOTES FOR EDITORS
Intu owns and operates some of the very best shopping centres, in some of the strongest locations right across the country,
including nine of the UK's top 20. You can find the UK's top retailers in our shopping centres, alongside some of the world's
most iconic global brands.
With over 21 million sq ft of retail space, our centres attract over 400 million customer visits a year and more than two thirds
of the UK population live within a 45 minute drive time of one of our centres.
At the forefront of UK shopping centre evolution since the 1970s, our focus is on creating compelling destinations for
customers with added theatre.
Our nationwide consumer facing shopping centre brand is transforming our customer experience and digital proposition,
including a transactional website with a view to providing the UK's leading shopping centre experience both on and off-line.
We have an investment plan of GBP1.2 billion over the next ten years with projects at most of our centres.
Over 80,000 people are employed at our centres across the UK and we are fully committed to supporting our local
communities and the wider environment through meaningful and hands-on initiatives.
For further information see intugroup.co.uk
This press release contains "forward-looking statements" regarding the belief or current expectations of Intu Properties plc, its Directors and other members of its senior
management about Intu Properties plc's businesses, financial performance and results of operations.
These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown
risks, uncertainties and other factors, many of which are outside the control of Intu Properties plc and are difficult to predict, that may cause actual results, performance or
developments to differ materially from any future results, performance or developments expressed or implied by the forward-looking statements. These forward-looking
statements speak only as at the date of this press release. Except as required by applicable law, Intu Properties plc makes no representation or warranty in relation to them
and expressly disclaims any obligation to update or revise any forward-looking statements contained herein to reflect any change in Intu Properties plc's expectations with
regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Any information contained in this press release on the price at which shares or other securities in Intu Properties plc have been bought or sold in the past, or on the yield on
such shares or other securities, should not be relied upon as a guide to future performance.
FIRST HALF 2014 HIGHLIGHTS
- NAV per share increased to 372 pence reflecting GBP573 million (44 pence per share)
property valuation gain, 7.6 per cent like-for-like, driven by strong investment demand
for prime shopping centres
- Acquired two top 20 UK shopping centres in GBP855 million transaction, funded by
GBP500 million rights issue and asset-specific debt facilities; centres now rebranded as intu
Merry Hill and intu Derby
- Underlying earnings per share 6.4 pence (2013 – 6.8 pence); like-for-like net rental
income impacted by upcoming developments, partly offset by lower average finance cost
- Continuing improvement in retailer demand for quality space:
- 98 long term leases signed for GBP15 million new annual rent, 4 per cent above
previous passing rent and in line with valuation assumptions
- encouraging progress stimulated by Intu's investment activity – some 140
lettings in solicitors' hands
- Formed joint venture at intu Uxbridge introducing 80 per cent partner for GBP175 million,
a small premium to 31 December 2013 book value
- Occupancy improved at 96 per cent (31 December 2013 – 95 per cent); footfall up one
per cent year on year to 30 June
- Projects completed at intu Metrocentre (new Platinum Mall to be followed by
restaurants), intu Lakeside (new food court) and underway at intu Eldon Square (mall
upgrade to be followed by restaurants), intu Potteries (cinema and restaurants), intu
Victoria Centre (restaurants and reconfigurations) and progress with intu Watford's
Charter Place extension (cinema anchor signed)
Financial highlights(1)
Six months ended 30 June
2014 2013
Net rental income (GBPm)(2) 189 181
Underlying earnings (GBPm) 72 68
Property revaluation surplus (GBPm)(2) 573 70
Profit for the period (GBPm) 602 200
Underlying EPS (pence) 6.4 6.8(3)
Dividend per share (pence) 4.6 4.6(3)
30 June 31 December
2014 2013
Market value of investment properties (GBPm)(2) 8,843 7,624
Net external debt (GBPm)(2) 3,924 3,698
Net assets attributable to shareholders 4,546 3,519
NAV per share (diluted, adjusted) (pence) 372 346(3)
Debt to assets ratio (per cent) 44.4 48.5
1 Please refer to glossary for definition of terms 2 Including Group share of joint ventures 3 Adjusted for rights issue bonus factor
OPERATING AND FINANCIAL REVIEW
OPERATING REVIEW
INTRODUCTION AND OUTLOOK
Introduction
Intu has had a strong first half of 2014, with major transactions and a high level of investment activity across the whole
business demonstrating tangible progress and considerable momentum.
Our long-standing focus on developing, investing in and creatively managing the very best shopping centres has resulted in
strong revaluation gains as direct investors have recognised the long-term value of the asset class. As a result, the Group's
NAV per share has increased notably, further enhanced by our capital structure.
The Group is now required under IFRS to account for joint ventures as a single line on each of the income statement and
balance sheet. As management reviews the business including the Group's share of joint ventures on a more detailed
basis, the financial analysis and information included in this Operating and Financial Review is presented for the Group,
including its share of joint ventures' results and assets, on a line by line basis(1).
Overview of first half 2014 activity
We acquired interests in two of the UK's top 20 shopping centres, on attractive terms and each with distinct and clear value
creation opportunities, and our business now includes nine of the UK's top 20 shopping centres. Our increased scale and
national coverage will enhance the range and quality of the experience we offer to customers, the expertise and efficiency of
our asset management and the opportunities we offer to retailers and other commercial partners.
Specifically, in the period we have reached milestones in each of our key areas of focus:
- Seizing opportunities for profitable expansion
- completed major acquisitions and have teams in place to implement our asset management plans for intu
Merry Hill and intu Derby – initial indications are positive and reinforce our investment case
- achieved good progress on catering and leisure-led projects, sectors which saw strong turnover growth in
the period and represent an increasing proportion of our space
- completed intu Metrocentre Platinum Mall and intu Lakeside food court projects on time and on budget
- Optimising performance of existing assets through active asset management
- continuing improvement in retailer demand with good level of lettings completed and in progress
- in particular significant tenant interest stimulated by Intu's investment activity, whether in progress or planned
- increased occupancy at 96 per cent (31 December 2013 – 95 per cent)
- Continuing to improve financial flexibility
- introduction of 80 per cent joint venture partner at intu Uxbridge, releasing capital while retaining scale
and the management role
- intu Trafford Centre long-dated debt structure tapped for GBP110 million, releasing capital as the valuation
rises; attractive rate secured on €95 million local debt by joint venture on Parque Principado, Northern Spain
- net debt to assets ratio reduced by valuation gains to 44.4 per cent (31 December 2013 – 48.5 per cent)
- cash and undrawn committed facilities of GBP510 million at 30 June 2014
- Distinguishing Intu from competitors through brand and digital presence
- continuing to show footfall market share gains
- high quality, Intu-owned Wi-Fi now live in 11 centres, approaching four million connections by over one
million individual subscribers
- intu Merry Hill and intu Derby rebranded, broader integration underway
We have generated a very strong valuation performance in the positive market for direct property investment. The on-going
repositioning of several centres continues to affect earnings metrics:
- property valuations increased 7.6 per cent like-for-like, well above IPD monthly index, retail, capital increase of
3.5 per cent due to the portfolio focus on the best prime centres
- net asset value per share (diluted, adjusted) increased to 372 pence including 44 pence of revaluation gains
- underlying earnings per share 6.4 pence (2013 – 6.8 pence); like-for-like net rental income down 3.6 per cent
reflecting impact of development, expiry and administration-related vacancies, partly offset by higher underlying
rents on new lettings; weighted average finance costs reduced following 2013 debt restructuring
1 Refer to note 29 and the Other information section of this report for more details and a reconciliation between the two bases.
Outlook and priorities
We are encouraged by the continuing improvement in consumer sentiment and gradual growth in national retail sales. Our
pipeline of lettings is indicative of increased retailer appetite for a physical presence in the best shopping centres,
particularly those where change and investment are under way.
As we continue to prepare for our larger projects, units held vacant or on flexible terms are now 2.5 per cent of Group ERV,
excluding recently acquired centres. We anticipate that this factor, combined with the temporary friction of lease expiry
concentrations and the residual impact of tenant failures, will continue into the second half year to exceed the increased
passing rent on like-for-like lettings. Hence the short-term indicator of like-for-like net rental income is likely to continue to
show a reduction in the second half of 2014, albeit at a lower rate than the first half.
We will maintain our focus on the four areas which we believe will deliver strong total returns over the medium term, with
objectives for the second half including:
- continuing to progress profitable expansion through our GBP1.2 billion organic development pipeline in the UK and
opportunities in Spain
- optimising the performance of our existing assets by implementing our centre-specific asset management
objectives including intu Merry Hill and intu Derby and crystallising tenant interest in developments into firm pre-
letting commitments
- continuing to improve our financial flexibility
- further distinguishing intu for retailers and customers through the enlarged brand presence, and from initiatives to
enhance the customer experience, including upgraded digital activities to link with the physical malls
UK RETAIL PROPERTY MARKET
UK retail property investment market
The improvement in the UK economy combined with increases in consumer confidence and retail sales has boosted
investor demand for shopping centres with considerable investment activity in the first half of 2014.
The increased weight of money looking to invest in the shopping centre market has led to yields compressing and capital
values rising as bidding processes have become increasingly competitive. This has been most noticeable at the prime end
of the market but has also spread across other shopping centre sub-sectors.
The IPD monthly index confirms this trend, with retail capital values up 3.5 per cent in the six months to June 2014. The June
rise of 1.1 per cent was the highest monthly increase for over four years. IPD has shown retail rental values now
beginning to increase after some years of decline, a directional change which we would expect to drive further investor appetite.
UK retail property occupational market
The UK economy has continued to grow with Q2 2014 GDP up 0.8 per cent, a sixth consecutive quarter of growth, and year
on year to 30 June 2014 up 3.1 per cent. This improvement, combined with a fall in unemployment to the lowest level since
2008, has led to a significant increase in consumer confidence.
This in turn has resulted in a sustained rise in consumer spending with higher like-for-like non-food retail sales now reported
by the BRC for 24 consecutive months with over 3 per cent growth shown in the year to June 2014. This improvement has
come despite year on year wage growth still lagging behind inflation.
Changing UK retail market and intu's response
In 2013, we launched our new national consumer brand, intu, in response to the changing retail landscape. Shopping is no
longer just about buying things you need, today's customers demand much more and their spend is very clearly linked to
dwell time in our centres.
Shopping centres are now expected to offer convenience, choice, great tenant mix, flagship stores, home delivery, click and
collect, leisure activities, great dining options, entertainment, socialising, communicating and a place to meet with friends
and family.
We are evolving our centres. Our brand enables us to distinguish ourselves and communicate the change. By giving our
customers a great experience, they will come more often and stay longer, driving spend for the benefit of our tenants.
Our new "tell intu" customer research programme indicates that those who rate the experience more highly spend
significantly more. Positive feedback on staff interaction show us that we are on the right path with our World Class
Service initiative and development of our signature customer experience programme, now accredited by the Institute of
Customer Service.
Our strategy is to align more closely the physical and digital experience and intu.co.uk, with its transactional marketplace,
enables us to engage with retailers' multi-channel teams and strategies. The websites will shortly be upgraded to be fully
mobile responsive as over two thirds now access from mobile devices. Our first conversion of an on-line only retailer from
intu.co.uk into a physical tenant opened in June, and we expect more to come.
Our strategy of increasing mobile connectivity continues with high quality Wi-Fi now available at 11 centres and 4G coming
to six centres. To illustrate our focus on quality, intu's Wi-Fi has around ten times more access points than a typical
installation. Total connections are now approaching four million, a million individuals, with well over half opting to receive
marketing information. As well as our existing centre-specific apps we are developing a mobile wayfinding app which will
provide a platform for location-based messaging of offers and events for retailers.
The reach of our centres nationally, with 400 million footfall, is facilitating high quality commercial partnerships to provide
interesting installations for customers such as Elite model agency and Diet Coke combining to enhance our student nights,
Samsung and Microsoft demonstrating product launches and film distributors bringing interactive workshops to our centres,
directly helping drive retailer sales and providing additional revenue for Intu.
DELIVERING ON OUR STRATEGY
Performance
Valuation
The aggregate valuation gains on our investment property including the Group's share of joint ventures was GBP573 million,
7.6 per cent like-for-like in the period, significantly ahead of the IPD monthly index, retail, which was up 3.5 per cent.
The weighted average nominal equivalent yield at 30 June 2014 was 5.35 per cent, a like-for-like reduction of 45 basis
points in the period, reflecting strong investment market conditions as well as our ongoing asset management initiatives
maintaining the prime nature of our assets. Based on the gross portfolio value, the net initial yield "topped-up" for the expiry
of rent free periods was 4.66 per cent.
On a like-for-like basis, ERV is broadly unchanged in the period. The most significant movement was an increase in
headline rent at intu Trafford Centre to GBP410 ITZA.
First Second First
half half half
2014 2013 2013
Group(1) revaluation surplus – like-for-like +7.6% +0.8% +1.0%
IPD(2) capital growth +3.5% +2.0% -1.1%
Group(1) weighted average nominal equivalent yield 5.35% 5.79% 5.85%
Like-for-like change in Group nominal equivalent yield -45bp -6bp -9bp
IPD(2) equivalent yield shift -30bp -18bp +1bp
Group(1) "topped-up" initial yield (EPRA) 4.66% 4.97% 5.10%
Group(1) change in like-for-like ERV +0.2% +0.1% +0.2%
IPD(2) change in rental value index -0.1% -0.5% -0.8%
1 Including Group share of joint ventures 2 IPD monthly index, retail
All but three of our shopping centres have increased in value during the period with 35 to 60 basis points equivalent yield
compression for the most prime centres and 5 to 25 basis points for others. Other factors such as upcoming development
or expiry cycles have offset this movement in some centres' overall valuations. In these cases we are confident that
completion of asset management initiatives will reverse short-term earnings impacts giving scope for improved valuations
without further market yield shift.
The major super-regional centres have significantly out-performed due to clear investment demand for such assets. The
larger city centre shopping centres have not seen the full impact but have continued to show growth. We have seen slight
reductions in others where the rental value upside from improvement expenditure has not yet been fully reflected in
prospective ERVs or where expiry cycles have increased voids.
The table below shows the components of the GBP573 million overall surplus
Market value
30 June 31 December
2014 2013 Surplus/(deficit)
GBPm GBPm GBPm %
intu Trafford Centre 2,200 1,900 300 16%
intu Lakeside 1,248 1,125 118 11%
intu Metrocentre 922 885 33 4%
Manchester Arndale 425 399 26 6%
intu Milton Keynes 267 251 16 6%
intu Eldon Square 265 250 11 5%
intu Braehead 602 602 – –
intu Potteries 162 163 (2) (1)%
intu Victoria Centre 299 306 (13) (4)%
Others including non like-for-like 2,453 1,743 84
Investment and development property
including Group's share of joint ventures 8,843 7,624 573
- intu Trafford Centre has benefited from an increase in headline Zone A rent as well as a 63 bp yield improvement
- intu Lakeside has benefited from progress with planning as well as a 50 bp improvement in yield for super-regional
centres
- intu Metrocentre has benefited from a 35 bp improvement in yield for super-regional centres but short term income
reductions in parts of the centre earmarked for redevelopment have affected the overall valuation
- Manchester Arndale and intu Milton Keynes have benefitted from around 30 bp yield improvement
- intu Eldon Square has benefited from a 45 bp improvement in yield but the broader impact of accrued development
expenditure has not yet been reflected in the valuation ERV
- intu Braehead and intu Potteries (both marginal deficits) have seen small equivalent yield contraction but this has
been offset in the valuations by short term reductions to income arising from lease expiry concentrations
- intu Victoria Centre has benefitted from a 40 bp yield improvement but accrued development expenditure and short
term income reductions ahead of redevelopment have affected the overall valuation
Operating metrics
First half First half Full year
2014 2013 2013
Occupancy 96% 95% 95%
– of which, occupied by tenants trading in administration 1% 1% 1%
Leasing activity – number, new rent 98, GBP15m 95, GBP23m 201, GBP42m
– new rent relative to previous passing rent 4% above 3% above 4% above
Like-for-like change in net rental income -3.6% -2.9% -1.9%
Footfall +1% -2% -2%
Retailer sales (like-for-like centres) +1½% +1% +0%*
Rent to estimated sales (exc. anchors and major space users) 13.1% 13.5% 13.5%
* excluding impact of trading interruptions during major tenant relocations at intu Braehead and Cribbs Causeway
The Group's operating metrics for the period are largely positive:
- occupancy across our centres remains high at 96 per cent (31 December and 30 June 2013 – 95 per cent). This
compares favourably to PMA's estimate of vacancy in "big" shopping centres of 11 per cent. In aggregate units
amounting to one per cent of rent are currently being traded by administrators and are treated as occupied within
the 96 per cent
- 98 new long term leases were signed in the first half, representing GBP15 million of new passing rent, in aggregate
4 per cent above previous passing rent where like-for-like and in line with valuation assumptions. These have
generated GBP50 million of shopfit investment commitments from new and existing retailers. Significant themes in the
period include:
- 35 new catering outlets opened or lettings now agreed, including Five Guys at intu Trafford and intu
Lakeside, Patisserie Valerie at intu Lakeside and St David's, Cardiff, the first Wahaca outside the south
east at St David's, Cardiff, Carluccio's in newly converted space at intu Bromley and intu's first Tortilla at
intu Watford
- new brands to individual centres such as Superdry at intu Victoria Centre, one of Dutch retailer Hema's
first UK stores at intu Bromley, Jack Wills and Joules at Cribbs Causeway, Samsung at intu Metrocentre
and Cribbs Causeway, Fat Face at intu Watford and Van Mildert at intu Metrocentre and intu Braehead
- previously on-line only brands creating a physical presence, including a first store for an intu.co.uk retailer
at intu Watford and intu's fifth Simply Be at intu Chapelfield
- the weighted average unexpired lease term at 30 June 2014 was 7.1 years (31 December 2013 – 7.5 years), with a
little under ten per cent of Group income expiring each year. At the risk of short-term earnings impact, expiries do
provide opportunity for tenant mix repositioning. We continue to manage carefully centre-specific clusters of
expiries, most significantly this year representing a third of the passing rent at intu Braehead. Long term leases in
respect of around 60 per cent of intu Braehead's 2014 expiries are now signed or in solicitors' hands, in aggregate
in line with previous passing rent excluding two strategic deals. 2013 concentrations at Cribbs Causeway and intu
Potteries are now largely completed with significant change and tenant investment as a result
- like-for-like net rental income was 3.6 per cent lower than the same period of 2013 as the benefit of like-for-like new
lettings above previous passing rent has been more than offset by the short-term impact of development voids,
lease expiry concentrations discussed above and the residual impact of 2013 tenant administrations. Altogether
2.5 per cent of existing portfolio ERV is now held for development, of which around a third is let on short term
leases for flexibility
- footfall: the number of visitors to our centres so far this year is one per cent higher than the same period of 2013,
ahead of Experian's measure of national retail footfall which is unchanged year on year
- with an improving trend in the first half of 2014, estimated retailer sales in our centres increased slightly in the year
to 30 June 2014 excluding the impact of trading interruptions during major tenant relocations. The ratio of rents to
estimated sales for standard units reduced marginally in the six months to 13.1 per cent from 13.5 per cent
Acquisitions and disposals
In May we completed our purchase of interests in two top 20 UK shopping centres, Merry Hill and Derby, and Sprucefield
retail park, Northern Ireland, funded by a 2 for 7 rights issue raising GBP500 million (gross) and GBP424 million of new debt
facilities secured on the properties. The final consideration after net asset value adjustment is expected to be GBP855 million
(see note 25). We have been pleased to find early indications of potential for growth which reinforce our investment case.
The acquisition was in line with our strategy to focus on the UK's largest and most successful destinations and established a
joint venture with QIC, a major global investor, at Merry Hill. It strengthened Intu's position as the leading owner, developer
and manager of prime UK shopping centres, filled a gap in our national coverage and extended the footprint of our
nationwide consumer facing brand.
Since completion we have:
- rebranded the two centres with new websites, signage and World Class Service training for the teams. Local
interest in the intu brand has been positive at both
- strengthened our local asset management and operational capabilities
- started work on detailed asset management plans with preliminary leasing discussions appearing positive to
acquisition valuations
- at intu Merry Hill, been encouraged by initial contact with key retailers about opportunities to upsize their presence
in the centre
- at Sprucefield, Northern Ireland, started exploring the development potential of this well-located site
We were delighted last month to enter into partnership in respect of intu Uxbridge with Kumpulan Wang Persaraan
(Diperbadankan) ("KWAP"), the GBP19 billion Malaysian pension fund. This transaction established a relationship with a
significant overseas investor and demonstrated the investment demand for prime UK shopping centres under the
management of a specialist operator such as Intu.
KWAP acquired an 80 per cent interest in intu Uxbridge for GBP175 million, representing a two per cent premium to its 31
December 2013 valuation of GBP213.9 million (100 per cent basis). We retain a 20 per cent interest and will continue to
manage the centre under the intu brand on behalf of the joint venture. The transaction is a useful step in recycling capital
into our substantial development pipeline while retaining the scale of our operations and has a deal structure which could be
applicable to other assets.
International
Parque Principado, Oviedo, acquired in October 2013 with CPPIB, has generated a valuation surplus of 7 per cent in the
period with 35 basis points equivalent yield contraction, taking the value to €188 million with continuing high occupancy and
lettings on average well above ERV. In April the joint venture arranged a €95 million 5 year loan secured on the centre at an
all-in rate some 200 basis points below the level assumed in our acquisition appraisal.
We continue with our local partner to progress pre-development activity on the three sites in Malaga, Valencia and Vigo over
which we have acquisition options. We continue to investigate opportunities to attract additional third party capital to assist
Intu in funding these Spanish activities without diverting significant resources from our UK development pipeline.
Our effective 9 per cent interest in Equity One, a US retail REIT, has increased in value in the first half by GBP3 million to
around GBP160 million ($269 million) with the underlying share price movement of 5 per cent partly offset by currency
movements.
Our associate company in India, Prozone, (GBP37 million book value) has seen encouraging rises in footfall and retailer sales
at its first mall in Aurangabad and has made progress with its next phase of mixed-use developments.
Dividends
As described in note 12 following the rights issue the 2013 dividend of 15.0 pence per share has been adjusted by the
bonus factor. This takes account of the bonus issue element of the new shares issued to shareholders as part of the rights
issue and gives a restated dividend of 13.7 pence per share. The prospectus dated 20 March 2014 stated that, subject to
performance and available resources, the Company would seek to maintain that level of dividend.
The Directors have resolved to pay an unchanged interim dividend of 4.6 pence per share on 25 November 2014 to
shareholders on the register on 24 October 2014 and will offer a scrip dividend alternative. Details of the apportionment
between the PID and non-PID elements per share will be confirmed on 3 October 2014 as the cash dividend is likely to be
wholly PID and the scrip alternative is likely to be part PID and part non-PID. Scrip dividend take up of the GBP144 million
dividend declared in respect of 2013 was 46 per cent, amounting to GBP67 million.
Looking to the future – organic development
Our organic development pipeline of GBP1.2 billion, 2.6 million sq ft, includes projects at all of our centres which are focused on
increasing the overall draw of the destination, extending dwell time and increasing spend. 1.8 million sq ft has planning
consent. We now have over 450 leisure and catering outlets trading across our centres, currently representing over ten per
cent of space and projected to rise to over 15 per cent as we build out our development pipeline.
We have made significant progress in the first half of the year:
- we have completed our major project at intu Metrocentre's Platinum Mall. Investments at intu Eldon Square and
intu Victoria Centre are well underway and generating encouraging levels of new retailer interest. The upgraded
lighting, ceilings and flooring give the perception of much larger structural change, transforming the feel of the
malls. The planned catering quarters in all three centres are drawing significant new operators to the regions with
good pre-letting progress
- refurbishment works to the food court at intu Lakeside including the creation of eight new restaurants have been
completed. The wider range of dining options in defined clusters and contemporary environment is expected to
double dwell times from the traditional fast food offer
- Cineworld are to anchor the GBP100 million leisure and catering led redevelopment at intu Watford with a nine-screen
cinema including IMAX. Subject to pre-letting, the project is on course for construction to start in 2015.
- construction of the nine-screen Cineworld and six restaurants at intu Potteries is underway
- we have received a planning consent at intu Bromley for a cinema and further restaurants
- we have demonstrated our financial flexibility to progress our pipeline to the optimum development timeline by
recycling capital while retaining our operational scale at intu Uxbridge, increasing the level of borrowing secured on
intu Trafford Centre and introducing debt secured on Parque Principado, Spain. Cash and undrawn facilities
amounted to GBP510 million at 30 June 2014
Priorities for the second half of 2014 include progressing our restaurant redevelopment projects at intu Metrocentre, intu
Eldon Square and intu Victoria Centre, the preparation of planning applications for redevelopment works at intu Broadmarsh
and Cribbs Causeway, and pre-development activities at intu Watford as well as Barton Square, intu Trafford Centre.
The table below sets out a summary of the project pipeline. To progress in line with the indicative timing, we would seek to
secure pre-letting of around two thirds of projects by space and the majority of the rent.
In the case of expansionary projects which create additional space for which direct incremental rent can be identified, we
would expect most projects to generate a stabilised initial yield on cost in the range of six to ten per cent and at least seven
per cent for major projects. Where no significant additional space is created, we assess project return in the context of an
internal rate of return based on the overall impact of the expenditure on centre performance through enhancing the
ambience, the tenant mix and the rental tone.
Expected
Indicative Intu
Size(1) construction investment
'000 sq ft timing(2) GBPm
Approved
intu Lakeside food court refurbishment(3) – 2013-14 3
intu Victoria Centre refurbishment and restaurants(4) – 2014-15 34
intu Potteries leisure extension(5) 58 2014-15 18
intu Eldon Square "Grey's Quarter" redevelopment and restaurants(6) – 2014-15 12
intu Metrocentre "Qube II" restaurants(6) – 2014-15 11
intu Trafford Centre – Barton Square courtyard
enclosure and second floor retail 112 2015-16 45
intu Bromley Queen's Gardens restaurants 14 2015-16 4
Other approved(7) 41 2014-15 37
225 164
Other active management(7) 97 2014-18 130
Major projects
intu Watford – Charter Place redevelopment8 380 2015-17 100
intu Broadmarsh redevelopment 51 2016-18 78
intu Lakeside leisure extension 225 2015-18 80
intu Lakeside Northern extension 438 2016-18 180
intu Braehead extension(9) 475 2016-18 200
Cribbs Causeway extension(10) 200 2018-20 30
intu Victoria Centre extension 505 2018-20 240
2,274 908
2,596 1,202
1 Represents net additional floor space of retail, catering and leisure
2 Indicative earliest start date – timing subject to change due to a number of internal and external factors
3 Total project cost GBP9 million of which GBP6 million has already been spent
4 Total project cost GBP42 million of which GBP8 million has already been spent
5 Total project cost GBP20 million of which GBP2 million has already been spent
6 Approved subject to conditions including partner commitment and pre-letting
7 Smaller committed and pipeline projects do not necessarily involve the creation of additional floor space
8 Total project GBP114 million of which GBP14 million approved, included in "Approved"
9 Size excludes arena and hotel
10 Intu share 33 per cent of total project cost GBP90 million
FINANCIAL REVIEW
Presentation of information
The Group has adopted IFRS 11 'Joint Arrangements' in 2014. This new standard requires that all joint ventures, which the
Group previously chose to account for on a proportional consolidation basis, are equity accounted. This means that the
income statement and the balance sheet now include single lines with the Group's total share of post-tax profit and the net
investment in joint ventures respectively. The Group's profit for the period and total equity are unaffected by these changes.
Further details of the impact of adopting this accounting policy are given in note 29 to the financial statements.
The new standard has a greater impact following the transactions in the period which created joint ventures in respect of intu
Merry Hill, Parque Principado and intu Uxbridge. Further details of these transactions are given in notes 25 and 26.
Management reviews and monitors the business, including the Group's share of joint ventures, on an individual line basis
not on a post-tax profit or net investment basis and therefore the figures and commentary below are presented consistent
with this management approach. Note 29 and the Other information section of this report give reconciliations between the
two bases.
Rights issue
In April 2014 the company issued 278,241,628 shares by way of a rights issue. Further details are included in note 12.
Following a rights issue accounting standards require an adjustment to be made to the number of shares previously used to
calculate earnings per share and in the Group's case, to be consistent, an adjustment is also made to the number of shares
used to calculate the dividend and net asset value per share. A bonus adjustment factor of 1.098 has been used to adjust
the comparative figures in these results using the company's closing ex-div share price on 28 March 2014 of 301 pence per
share and the theoretical ex-rights price of 274 pence per share.
Key points of note
- strong growth in property valuations has resulted in a substantial increase in the profit for the period. This
improved market sentiment has not yet been reflected in net rental income as the Group completes re-letting units
from lease expiries and 2013 administrations and holds units to facilitate future development plans:
- underlying earnings of GBP72 million, up 6 per cent on 2013, gives earnings per share of 6.4 pence, down 6
per cent on 2013 in part due to the higher level of shares in issue
- NAV per share at 372 pence; total financial return for the six months of 10 per cent based on the bonus
factor adjusted opening NAV per share
- balance sheet position improved from higher property valuations and acquisitions completed in the period:
- debt to assets ratio at 44.4 per cent, below the Group's target maximum level of 50 per cent. Actual ratio
would reduce to around 41 per cent were the convertible bonds to convert to equity
- interest cover ratio at 1.76x, above the Group's targeted minimum level 1.60x
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2014
Income statement
The Group recorded a profit for the period of GBP602 million, a substantial increase on the GBP200 million reported for the six
months ended 30 June 2013. At an underlying level, excluding valuation and exceptional items, earnings were GBP4 million
higher at GBP72 million (2013 – GBP68 million).
The major factors in the GBP402 million increase in profit to GBP602 million are valuation and exceptional items, including:
- an increase in the property revaluation gain to GBP547 million (2013 – GBP61 million)
- lower exceptional finance costs of GBP23 million (2013 – GBP112 million), largely due to the absence in 2014 of the high
level of interest rate swap terminations in connection with the debt refinancing that occurred in the first half of 2013
- exceptional administration costs of GBP12 million in the period are GBP5 million lower than 2013. The GBP11 million of
costs related to the acquisition are the largest element of the 2014 charge
These positive factors were partially offset by:
- negative movement of GBP199 million in the change in fair value of the Group's financial instruments. 2014's results
include a charge of GBP16 million whereas 2013 benefited from a GBP183 million credit
Underlying earnings, which excludes valuation and exceptional items, were GBP4 million ahead in 2014 at GBP72 million as shown
in the chart below and as set out in the Underlying Profit Statement. Taking into account additional shares issued to part
fund the acquisition of intu Merry Hill and intu Derby, underlying earnings per share reduced by 6 per cent to 6.4 pence.
The principal components of the change in underlying earnings are as follows:
- net rental income increased overall due to the GBP14 million contribution from the acquisitions of intu Merry Hill and
intu Derby in 2014 and of intu Milton Keynes and Parque Principado, part way through 2013. Like-for-like net
rental income reduced by 3.6 per cent (see Operating review above)
- as detailed in the table below the Group's net rental income margin has reduced slightly from the 87 per cent
achieved in 2013 to 86 per cent in 2014. This is predominantly due to higher void costs and property operating
expenses. The increased property operating expenses includes the impact of properties acquired and higher car
park and employee costs
Period ended Period ended
30 June 30 June
2014 2013
GBPm GBPm
Gross rental income 233 219
Head rent payable (12) (12)
221 207
Net service charge expense and void rates (11) (7)
Bad debt and lease incentive write-offs (3) (5)
Property operating expense (18) (14)
Net rental income 189 181
Net rental income margin 86% 87%
- underlying net finance costs, which exclude exceptional items, reduced by GBP1 million due to the favourable impact
of lower average rates following debt refinancings, in particular on the intu Metrocentre facility that was concluded
at the end of 2013. Offsetting this was the GBP2 million cost of the debt drawn in the period to part-fund the
acquisitions of intu Merry Hill and intu Derby
- on-going administration expenses increased to GBP15 million (2013 – GBP14 million), largely due to costs related to on-
going management of recent acquisitions, including new employees and professional fees
- our partner's share of the reduction in finance costs following the intu Metrocentre debt refinancing has been the
main factor reducing the non-controlling interest credit by GBP4 million compared to 2013
Balance sheet
The Group's net assets attributable to shareholders have increased by GBP1.0 billion to GBP4.5 billion at the end of June 2014
due to equity raised in the year to fund the acquisition of the Merry Hill and Derby shopping centres and the retained profit
for the six months including the GBP573 million gain on revaluation of the Group's properties.
As detailed in the table below, net assets (diluted, adjusted) have increased by GBP1,049 million from December 2013 to GBP4,853
million as at the end of June 2014. The figures below include the Group's share of joint ventures assets and liabilities on an
individual line basis. Details of the impact these items have are included in note 29.
30 June 31 December
2014 2013
GBPm GBPm
Investment, development and trading properties 8,774 7,552
Investments 195 190
Net external debt (3,924) (3,698)
Other assets and liabilities (426) (423)
Net assets 4,619 3,621
Non-controlling interest (73) (102)
Attributable to equity shareholders 4,546 3,519
Fair value of derivatives (net of tax) 205 198
Other adjustments 84 83
Effect of dilution 18 4
Net assets (diluted, adjusted) 4,853 3,804
The most significant factor in the increase in investment and development properties of GBP1,222 million is the acquisition of
intu Merry Hill, intu Derby and Sprucefield that were valued at a combined total of GBP890 million at 30 June 2014. The
remainder of the increase is due to the GBP573 million valuation gain on the Group's properties in the six months ended 30
June 2014.
The investments of GBP195 million at 30 June 2014 comprise the Group's interests in the US and India. The investment in the
US comprises 11.4 million shares in a joint venture with Equity One, a listed US REIT, and is valued at GBP157 million, based
on 30 June 2014 Equity One share price. The remaining investments represent the Group's interests in India, largely
comprising a 32 per cent interest in Prozone, a shopping centre developer, listed on the Indian stock market. This is valued
at GBP37 million on the Group's balance sheet at 30 June 2014. See note 16 for further details.
The increase in net external debt is discussed in the Movement in net external debt section.
Adjusted net assets per share
As illustrated in the chart below, the opening diluted, adjusted net assets per share after the bonus factor adjustment was
346 pence. The post rights issue figure taking into account the full impact of the rights issue gives a pro forma opening
position for 2014 of 335 pence per share. The increase from the pro forma figure to the 30 June 2014 value of 372 pence
was driven by the property valuation gain of 44 pence per share.
The dividend of 10 pence per share represents the 2013 final dividend paid in May 2014.
FINANCIAL POSITION AT 30 JUNE 2014
At 30 June 2014 the Group had net external debt of GBP3,924 million, including the Group's share of joint ventures net debt. In
addition to cash balances of GBP200 million the Group had undrawn facilities of GBP310 million, giving total cash and available
facilities at the end of June 2014 of GBP510 million.
Movement in net external debt
The table below illustrates the significant movements in the increase of GBP226 million in the Group's net external debt in the
period.
Six months
to June
2014
GBPm
Opening net external debt (3,698)
Recurring cash flow 61
Exceptional finance and other costs (35)
Issue of shares 492
Acquisition (864)
Capital expenditure (26)
Disposal of 80% interest in intu Uxbridge 173
Movement in joint ventures 25
Dividends (49)
Other (3)
Net external debt at 30 June 2014 (3,924)
Acquisition
The acquisition cash movement in the table above of GBP864 million was in respect of the acquisition of intu Derby and
Sprucefield and a 50 per cent joint venture interest in intu Merry Hill. This includes the initial cash consideration paid of
GBP868 million, less GBP4 million of cash acquired with the business. Following finalisation of the opening balance sheet it is
anticipated the Group will receive approximately GBP13 million from the vendor to reflect the actual net assets transferred,
giving a net consideration of GBP855 million.
The net assets acquired totalled GBP856 million, largely comprised of the properties' value. The total net assets acquired
exceeds the consideration therefore a gain of GBP1 million is recorded in the income statement in the period. Transaction
costs of the acquisition amounted to GBP11 million and are included in the exceptional finance and other costs above. The
acquisition was completed on 1 May 2014.
The main factor in the Issue of shares in the period was the 2 for 7 rights issue that raised GBP490 million, net of expenses,
that was used to part fund the acquisition.
Disposal
In June 2014 the Group sold 80 per cent of its interest in Intu Uxbridge Limited for consideration of GBP175 million, before
expenses. The Group retains a 20 per cent interest in the company which has been accounted for as a joint venture from
20 June 2014. A gain on disposal of GBP0.6 million has been recorded in the income statement.
Debt structure
A significant proportion of the Group's debt has been refinanced in last 18 months. After this refinancing activity the majority
of the Group's debt still remains arranged on an asset-specific basis, with limited or non-recourse from the borrowing entities
to other Group companies.
As a result of the refinancings the Group has a wider range of funding sources. The range of debt instruments now includes
CMBS and other bonds plus syndicated bank debt with corporate-level debt remaining limited to the GBP375 million Revolving
Credit Facility and the GBP300 million convertible bond.
Following the recent financing activity the above chart illustrates that there is minimal refinancing required in the next two
years before an increase in debt maturing in 2016.
During the period the most significant financing activity involved arranging the debt to part fund the acquisition of intu Merry
Hill, intu Derby and Sprucefield. This involved three new 2½ year debt facilities secured on the Derby and Sprucefield
properties and the interest in Merry Hill (GBP203 million, GBP30 million and GBP191 million respectively).
The plan for refinancing these short term facilities is that intu Derby will be added to the SGS later this year whilst the longer
term funding solution for Sprucefield will be decided when the strategy for this property, whether to keep and develop the
asset or sell, has been confirmed. At intu Merry Hill, the intention is that the Group and our partner QIC will jointly refinance
at the asset level when the QIC CMBS matures in 2016.
In February the Group raised GBP110 million through the issuance of further notes under the intu Trafford Centre CMBS. The
bonds had an average maturity of 9 years and an all-in cost of 4.6 per cent. In April the Group's partnership with CPPIB
signed a €95 million, 5 year term loan secured on Parque Principado, in Northern Spain.
The debt previously secured on intu Uxbridge of GBP146 million was repaid as part of the disposal process.
30 June 31 December
2014 2013
Loan to value 44.4% 48.5%
Interest cover 1.76x 1.71x
Weighted average debt maturity 7.7 years 8.0 years
Weighted average cost of gross debt 4.7% 4.8%
Proportion of gross debt with interest rate protection 87% 92%
The table above summarises the Group's main debt measures. The substantial reduction in the loan to value ratio is largely
due to the property valuation gain in the period. The small movements in the other measures are predominantly due to the
features of the debt taken on to fund the acquisitions which is short duration, floating rate debt.
Interest rate swaps
Just over 40 per cent of the Group's debt is floating rate. The Group uses interest rate swaps to fix short- and medium-term
interest obligations, reducing cash flow volatility caused by changes in interest rates. Combining the impact of this hedging
and the fixed rate debt, the Group's debt is effectively 87 per cent fixed.
The nominal value of interest rate swap contracts outstanding at 30 June 2014 is GBP1.9 billion. The acquisition related debt
raised in the year is floating rate and has not been fixed to minimise refinancing costs.
The fair value net liability of these interest rate swaps at 31 December 2013 is GBP213 million, an increase of GBP7 million since
31 December 2013. This increase in the liability can be largely attributed to a movement in the interest rate yield curve
increasing the required fair value provision for the Group's interest rate swaps. Cash payments in the six months totalled
GBP35 million of which GBP21 million has been classified as an exceptional finance cost as it relates to the termination of swaps
(GBP9 million) or payments in respect of unallocated swaps (GBP12 million). The balance of the payments have been included as
underlying finance costs as they relate to ongoing interest rate swaps used to hedge debt.
As previously detailed, the Group has a number of interest rate swaps which are unallocated as, due to a change in lenders'
practice, they cannot be used for hedging the Group's borrowings. Using the 30 June 2014 forward interest rate yields,
these swaps have a market value liability of GBP157 million (31 December 2013 – GBP143 million). Based on these rates and
values, it is estimated the Group will be required to make cash payments on these swaps of GBP12 million in the second half of
2014.
Covenants
Full details of the loan financial covenants are included in the Financial covenants section of this report. The Group is in
compliance with all of its corporate and asset-specific loan covenants. As detailed in that analysis, the headroom over the
minimum covenant levels has generally increased in the year.
Tax charge for the period
Being a Real Estate Investment Trust (REIT) significantly reduces the taxation costs of the Group, but brings with it the
requirement to operate within the rules of the REIT regime. For the Group this has included paying REIT entry charges of
GBP199 million and the requirement on a continuing basis to pay out 90 per cent of its REIT earnings as taxable income to its
shareholders as dividends.
The tax credit in the six months of GBP0.3 million comprises current tax expenses on the Group's US and Spanish investments
totalling GBP0.3 million, offset by a deferred tax credit of GBP0.6 million largely on the revaluation of interest rate swaps and
investments.
Matthew Roberts
Chief Financial Officer
31 July 2014
KEY RISKS AND UNCERTAINTIES
Intu's Board has overall responsibility for managing risk across the Group and establishing the Group's appetite to risk
based on the balance of potential returns and negative impacts.
Intu recognises that it faces a number of risks in achieving its strategic objectives. Effective identification and management
of these risks is a major factor in Intu's ability to deliver these objectives. Our risk management framework targets the early
identification of key risks and the formation of plans to remove or mitigate them. We apply the methodology of identify,
analyse, action and implement, together with our overall culture of risk management to ensure that everyday management
decisions are taken in the context of sound risk management principles as well as achieving our strategic objectives.
The key risks and uncertainties facing the Group are unchanged from those disclosed in the 2013 Annual report and are as
set out in the table below:
Change in
Risk and impact Mitigation level of risk 2014 commentary
Property market - Focus on prime assets decrease - Strong valuation increase in the period
Macro environment - Covenant headroom monitored and - Covenant headroom improved
weakness could stress tested - Tenant administrations in the period
undermine rental - Regular monitoring of tenant substantially reduced compared to 2013
income levels and strength and diversity - Continued investment in the Group's prime
property values, centres to meet changing customer and
reducing return on retailer expectations
investment and
covenant headroom
Financing - Regular reporting to Board of - Financing activity in the period raised gross
Reduced availability current and projected funding - debt of GBP573 million including Group's share of
of funds could limit position joint ventures
liquidity leading to - Effective treasury management - Partial disposal of interest in intu Uxbridge
restriction of investing aimed at balancing long debt demonstrated financing flexibility to fund the
and operating maturity profile and diversification of Group's development pipeline
activities and/or sources of finance
increase in funding - Consideration of financing plans
cost including potential for recycling of
capital before commitment to
transactions and developments
Operations - Strong business process and - Centre operations of acquired centres have
Accidents, system procedures supported by regular - been successfully brought into the Group's
failure or external training and exercises facilities management joint venture
factors could - Annual audits of operational - Group wide cyber security project has
threaten the safe standards carried out by internal commenced with key focus being proactive
and secure and external consultants monitoring and management of Group's
environment - Culture of visitor safety technical infrastructure to mitigate cyber
provided for - Rigorous ICT security framework; threats
shoppers and crisis management simulations
retailers, leading to include cyber security threats
financial and/or - Retailer liaison and briefings
reputational loss - Appropriate levels of insurance
Strategy and - Annual strategic review by Board - New asset management structure
execution informed by external research and - implemented to enhance delivery of
Misjudged or poorly advice strategic goals
executed strategy - Board and management team - Internal KPIs and dashboard being
fails to create experienced in shopping centre and designed to support the new structure
shareholder value broader retail industry - Extending reach through introduction of
- Engagement with national and new joint venture partners
international retailers - Partnership agreements designed to
- Specialist advice and extensive address both partners' interests and
research supporting major initiatives ensure efficient asset management
- Careful assessment of potential
partners to complement Intu's skills
and resources
Development and - Capital Projects Committee reviews increase - Substantial property and financial due
acquisition detailed appraisals before and diligence undertaken before acquisitions
Misjudged or poorly monitors progress during significant completed in the period
executed project projects - Property management and financial
results in increased - Research and third party due activities in respect of centres acquired in
cost or income diligence undertaken for the period being integrated with Group's
foregone, transactions existing processes and policies
hence fails to create - Finalisation of recruitment and
shareholder value integration anticipated for the second
half of 2014
- Detailed appraisal work continuing
ahead of starting major development
projects
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the interim report and condensed set of financial statements, in accordance with
applicable law and regulations. The Directors confirm that, to the best of their knowledge:
- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting,
as adopted by the European Union; and
- the interim report includes a fair review of the information required by Sections DTR 4.2.7R and DTR 4.2.8R of the
Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
The operating and financial review refers to important events which have taken place in the period.
The principal risks and uncertainties facing the business are referred to in the operating and financial review.
Related party transactions are set out in note 28 of the condensed set of financial statements.
A list of current Directors is maintained on the Intu Properties plc website: intugroup.co.uk.
On behalf of the Board
David Fischel
Chief Executive
Matthew Roberts
Chief Financial Officer
31 July 2014
INDEPENDENT REVIEW REPORT TO INTU PROPERTIES PLC
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed the condensed consolidated interim financial statements, defined below, in the interim report of Intu Properties
plc for the six months ended 30 June 2014. Based on our review, nothing has come to our attention that causes us to believe
that the condensed consolidated interim financial statements are not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
This conclusion is to be read in the context of what we say in the remainder of this report.
What we have reviewed
The condensed consolidated interim financial statements, which are prepared by Intu Properties plc, comprise:
- the consolidated balance sheet as at 30 June 2014;
- the consolidated income statement and consolidated statement of comprehensive income for the period then ended;
- the consolidated statement of cash flows for the period then ended;
- the consolidated statement of changes in equity for the period then ended; and
- the explanatory notes to the condensed consolidated interim financial statements.
As disclosed in note 1, the financial reporting framework that has been applied in the preparation of the full annual financial
statements of the group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
The condensed consolidated interim financial statements included in the interim report have been prepared in accordance with
International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
What a review of condensed consolidated financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use
in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and
Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed consolidated interim financial statements.
Responsibilities for the condensed consolidated interim financial statements and the review
Our responsibilities and those of the directors
The interim report, including the condensed consolidated interim financial statements, is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express to the company a conclusion on the condensed consolidated interim financial statements in the
interim report based on our review. This report, including the conclusion, has been prepared for and only for the company for the
purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose.
We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
31 July 2014
Notes:
(a) The maintenance and integrity of the Intu Properties plc website is the responsibility of the directors; the work carried out by
the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since they were initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
CONSOLIDATED INCOME STATEMENT (unaudited)
For the six months ended 30 June 2014
Re-presented Re-presented
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Notes GBPm GBPm GBPm
Revenue 4 261.1 250.3 511.6
Net rental income 4 177.6 174.4 356.2
Net other income 5 1.8 2.4 3.7
Revaluation of investment and development property 14 547.2 60.8 109.9
Gain on acquisition of businesses 25 1.2 – –
Gain on part disposal of intu Uxbridge 26 0.6 – –
Administration expenses – ongoing (14.9) (13.9) (27.6)
Administration expenses – exceptional 6 (11.9) (16.5) (21.2)
Operating profit 701.6 207.2 421.0
Finance costs 7 (95.4) (96.0) (192.6)
Finance income 8 3.6 0.6 0.6
Other finance costs 9 (25.9) (115.0) (164.5)
Change in fair value of financial instruments (16.1) 183.1 272.3
Net finance costs (133.8) (27.3) (84.2)
Profit before tax, joint ventures and associates 567.8 179.9 336.8
Current tax 10 (0.3) (0.2) (0.8)
Deferred tax 10 0.6 5.2 1.4
Taxation 0.3 5.0 0.6
Share of profit of joint ventures 15 33.0 14.3 26.1
Share of profit of associates 16 1.2 0.6 0.5
Profit for the period 602.3 199.8 364.0
Attributable to:
Owners of Intu Properties plc 588.3 195.7 359.8
Non-controlling interests 14.0 4.1 4.2
602.3 199.8 364.0
Basic earnings per share 12 51.8p 19.2p 34.5p
Diluted earnings per share 12 47.7p 17.7p 32.0p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
For the six months ended 30 June 2014
Re-presented Re-presented
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBPm GBPm GBPm
Profit for the period 602.3 199.8 364.0
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Revaluation of other investments 8.3 9.7 8.1
Exchange differences (7.9) 11.2 (8.1)
Tax relating to components of other comprehensive income (0.6) (5.2) (1.6)
Total items that may be reclassified subsequently to profit or loss (0.2) 15.7 (1.6)
Other comprehensive income for the period (0.2) 15.7 (1.6)
Total comprehensive income for the period 602.1 215.5 362.4
Attributable to:
Owners of Intu Properties plc 588.5 211.4 359.2
Non-controlling interests 13.6 4.1 3.2
602.1 215.5 362.4
CONSOLIDATED BALANCE SHEET (unaudited)
As at 30 June 2014
Re-presented Re-presented
As at As at As at
30 June 31 December 30 June
2014 2013 2013
Notes GBPm GBPm GBPm
Non-current assets
Investment and development property 14 7,956.6 7,278.7 7,053.2
Plant and equipment 6.2 5.5 8.8
Investments in joint ventures 15 715.8 209.5 202.2
Investments in associates 16 36.8 35.8 40.7
Other investments 17 158.1 154.9 170.5
Goodwill 4.0 8.2 4.0
Derivative financial instruments 20.0 25.1 22.4
Trade and other receivables 92.4 99.2 92.0
8,989.9 7,816.9 7,593.8
Current assets
Trading property – 0.2 0.2
Trade and other receivables 110.6 78.1 74.1
Derivative financial instruments 0.7 0.7 0.7
Short-term investments – 69.3 –
Cash and cash equivalents 18 172.6 156.7 132.4
283.9 305.0 207.4
Total assets 9,273.8 8,121.9 7,801.2
Current liabilities
Trade and other payables (245.9) (238.1) (233.3)
Current tax liabilities (0.6) (0.9) (0.3)
Borrowings 19 (68.3) (70.9) (43.3)
Derivative financial instruments (8.9) (10.1) (14.0)
(323.7) (320.0) (290.9)
Non-current liabilities
Borrowings 19 (4,103.3) (3,944.0) (3,768.6)
Derivative financial instruments (224.3) (220.5) (306.4)
Other payables (3.2) (4.3) (3.2)
Deferred tax – (12.0) –
(4,330.8) (4,180.8) (4,078.2)
Total liabilities (4,654.5) (4,500.8) (4,369.1)
Net assets 4,619.3 3,621.1 3,432.1
Equity
Share capital 21 634.5 486.9 483.5
Share premium 1,085.2 695.6 677.4
Treasury shares (45.3) (48.2) (48.5)
Convertible bonds 22 143.7 143.7 143.7
Other reserves 500.7 500.5 516.8
Retained earnings 2,227.3 1,740.3 1,625.9
Amounts attributable to owners of Intu Properties plc 4,546.1 3,518.8 3,398.8
Non-controlling interests 73.2 102.3 33.3
Total equity 4,619.3 3,621.1 3,432.1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)
For the six months ended 30 June 2014
Attributable to owners of Intu Properties plc
Non-
Share Share Treasury Convertible Other Retained controlling Total
capital premium shares bonds reserves earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2014 486.9 695.6 (48.2) 143.7 500.5 1,740.3 3,518.8 102.3 3,621.1
Profit for the period – – – – – 588.3 588.3 14.0 602.3
Other comprehensive
income:
Revaluation of other
investments (note 17) – – – – 8.3 – 8.3 – 8.3
Exchange differences – – – – (7.5) – (7.5) (0.4) (7.9)
Tax relating to
components of other
comprehensive income – – – – (0.6) – (0.6) – (0.6)
Total comprehensive
income for the period – – – – 0.2 588.3 588.5 13.6 602.1
Ordinary shares issued 147.6 389.6 – – – – 537.2 – 537.2
Dividends (note 11) – – – – – (96.2) (96.2) – (96.2)
Interest on convertible
bonds (note 22) – – – – – (2.9) (2.9) – (2.9)
Share-based payments – – – – – 1.6 1.6 – 1.6
Acquisition of treasury –
shares – – (1.0) – – – (1.0) – (1.0)
Disposal of treasury shares – – 3.9 – – (3.8) 0.1 – 0.1
Non-controlling interest
additions – – – – – – – 27.2 27.2
Distribution to non-
controlling interest – – – – – – – (1.2) (1.2)
Parque Principado
(note 26) – – – – – – – (68.7) (68.7)
147.6 389.6 2.9 – – (101.3) 438.8 (42.7) 396.1
At 30 June 2014 634.5 1,085.2 (45.3) 143.7 5 00.7 2,227.3 4,546.1 73.2 4,619.3
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)
For the year ended 31 December 2013
Attributable to owners of Intu Properties plc
Non-
Share Share Treasury Convertible Other Retained controlling Total
capital premium shares bonds reserves earnings Total interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2013 434.2 577.4 (43.9) 143.7 336.7 1,528.9 2,977.0 29.2 3,006.2
Profit for the year – – – – – 359.8 359.8 4.2 364.0
Other comprehensive income:
Revaluation of other
investments – – – – 8.1 – 8.1 – 8.1
Exchange differences – – – – (7.1) – (7.1) (1.0) (8.1)
Tax relating to components
of other comprehensive
income – – – – (1.6) – (1.6) – (1.6)
Total comprehensive
income for the year – – – – (0.6) 359.8 359.2 3.2 362.4
Ordinary shares issued 52.7 118.2 – – 164.4 – 335.3 – 335.3
Dividends (note 11) – – – – – (142.1) (142.1) – (142.1)
Interest on convertible
bonds (note 22) – – – – – (5.8) (5.8) – (5.8)
Share-based payments – – – – – 2.0 2.0 – 2.0
Acquisition of treasury shares – – (7.0) – – – (7.0) – (7.0)
Disposal of treasury shares – – 2.7 – – (2.5) 0.2 – 0.2
Non-controlling interest
additions – – – – – – – 71.1 71.1
Distribution to non-controlling
interest – – – – – – – (1.2) (1.2)
52.7 118.2 (4.3) – 164.4 (148.4) 182.6 69.9 252.5
At 31 December 2013 486.9 695.6 (48.2) 143.7 500.5 1,740.3 3,518.8 102.3 3,621.1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)
For the six months ended 30 June 2013
Attributable to owners of Intu Properties plc
Non-
Share Share Treasury Convertible Other Retained controlling Total
capital premium s hares bonds reserves earnings Total interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2013 434.2 577.4 (43.9) 143.7 336.7 1,528.9 2,977.0 29.2 3,006.2
Profit for the period – – – – – 195.7 195.7 4.1 199.8
Other comprehensive
income:
Revaluation of other
investments – – – – 9.7 – 9.7 – 9.7
Exchange differences – – – – 11.2 – 11.2 – 11.2
Tax relating to
components of other
comprehensive income – – – – (5.2) – (5.2) – (5.2)
Total comprehensive
income for the period – – – – 15.7 195.7 211.4 4.1 215.5
Ordinary shares issued 49.3 100.0 – – 164.4 – 313.7 – 313.7
Dividends (note 11) – – – – – (94.4) (94.4) – (94.4)
Interest on convertible
bonds (note 22) – – – – – (2.9) (2.9) – (2.9)
Share-based payments – – – – – 0.8 0.8 – 0.8
Acquisition of treasury
shares – – (7.0) – – – (7.0) – (7.0)
Disposal of treasury shares – – 2.4 – – (2.2) 0.2 – 0.2
49.3 100.0 (4.6) – 164.4 (98.7) 210.4 – 210.4
At 30 June 2013 483.5 677.4 (48.5) 143.7 516.8 1,625.9 3,398.8 33.3 3,432.1
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
For the six months ended 30 June 2014
Re-presented Re-presented
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Notes GBPm GBPm GBPm
Cash flows from continuing operations
Cash generated from operations 20 146.2 140.1 300.6
Interest paid (121.0) (197.9) (335.2)
Interest received 0.5 0.6 0.6
Taxation (0.1) (0.3) (0.7)
Cash flows from operating activities 25.6 (57.5) (34.7)
Cash flows from investing activities
Purchase and development of property, plant and equipment (26.3) (11.0) (44.1)
Sale of property – 0.1 0.1
Acquisition of businesses net of cash acquired 25 (864.2) (248.4) (382.1)
Realisation of short-term investments 69.3 – –
Cash received on part disposal of intu Uxbridge net of cash sold
with business 26 173.3 – –
Parque Principado cash received net of cash reclassified 26 (11.6) – –
Investment in joint ventures – (0.5) (0.5)
Loan advances to joint ventures (1.8) (0.1) (0.4)
Loan repayments by joint ventures 46.0 4.6 9.4
Cash flows from investing activities (615.3) (255.3) (417.6)
Cash flows from financing activities
Issue of ordinary shares 491.5 273.0 273.0
Acquisition of treasury shares (1.0) (0.9) (0.9)
Sale of treasury shares – 0.2 0.2
Non-controlling interest funding received 27.2 – 71.1
Cash transferred from restricted accounts 0.2 0.2 –
Borrowings drawn 522.8 1,389.4 2,051.6
Borrowings repaid (378.8) (1,344.6) (1,875.3)
Interest on convertible bonds (2.9) (2.9) (5.8)
Equity dividends paid (49.1) (51.5) (90.9)
Cash flows from financing activities 609.9 262.9 423.0
Effects of exchange rate changes on cash and cash equivalents (0.1) – (0.1)
Net increase/(decrease) in cash and cash equivalents 20.1 (49.9) (29.4)
Cash and cash equivalents at beginning of period 151.1 180.5 180.5
Cash and cash equivalents at end of period 18 171.2 130.6 151.1
NOTES (unaudited)
1 Basis of preparation
The condensed set of financial statements for the six months ended 30 June 2014 is unaudited and does not constitute
statutory financial statements within the meaning of s434 of the Companies Act 2006. The condensed set of financial
statements has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34 as adopted by the European Union.
The comparative information presented for the year ended 31 December 2013 is not the Group's financial statements for
that year. Those financial statements have been reported on by the Group's auditors and delivered to the registrar of
companies. The auditors' opinion on those financial statements was unqualified and did not contain an emphasis of matter
paragraph or a statement made under Section 498 (2) or (3) of the Companies Act 2006.
The condensed set of financial statements should be read in conjunction with the Group's financial statements for the year
ended 31 December 2013 which have been prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amount of assets and liabilities, income and expense. Actual
results may differ from these estimates. Except as described below, in preparing the condensed set of financial statements,
the areas of significant judgement made by management in applying the Group accounting policies and the key sources of
estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended
31 December 2013.
The largest area of estimation and uncertainty in the condensed set of financial statements is in respect of the valuation of
the property portfolio, where third party independent valuations were obtained.
The Group prepares regular forecasts and projections which include sensitivity analysis taking into account reasonably
possible changes in trading performance and asset values and assesses the potential impact of these on the Group's
liquidity position and available resources.
In preparing the most recent projections, factors taken into account include the Group's GBP173 million of cash, the GBP27 million,
being the Group's share, of cash held by joint ventures and the GBP310 million of undrawn facilities at 30 June 2014. In
addition, as a result of recent refinancings, apart from the facilities secured on St. David's, Cardiff and Soar (previously
Braehead Leisure), totalling GBP122 million due to be repaid in the second half of 2014, there is minimal refinancing required
until 2016. The relatively long-term and stable nature of the cash flows receivable under tenant leases, were also factored
into the forecasts.
After reviewing the most recent projections and the sensitivity analysis, the Directors have concluded that there is a
reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable
future. Thus they continue to adopt the going concern basis of accounting in preparing the Group's financial statements.
2 Accounting policies
The accounting policies applied are consistent with those of the Group's statutory financial statements for the year ended 31
December 2013 as set out on pages 115 to 117 of the Annual Report except for the following standards, amendments and
interpretations which are effective for the first time for the Group's 31 December 2014 year end and have been applied in
preparing these interim financial statements to the extent they are relevant to the preparation of interim financial information:
- IFRS 10 Consolidated Financial Statements;
- IFRS 11 Joint Arrangements;
- IFRS 12 Disclosure of Interests in Other Entities;
- IAS 27 Separate Financial Statements (revised);
- IAS 28 Investments in Associates and Joint Ventures (revised);
- IAS 32 Financial Instruments: Presentation (amendment);
- IAS 36 Impairment of Assets (amendment); and
- Amendments to IFRS 10, IFRS 11 and IFRS 12 (transition guidance).
IFRS 11 removes the choice of accounting treatments previously available under IAS 31 Interests in Joint Ventures. This
has impacted the Group's accounting policy in respect of joint ventures and joint operations but has had no impact for
joint operations. The Group's interests in joint ventures are now accounted for using the equity method with the income
statement and balance sheet showing a single line for the Group's share of profit and the net investment in joint ventures
with respectively, rather than proportionally consolidating the Group's share of assets, liabilities, income and expenses on a
line-by-line basis. The Group's interest in joint operations is accounted for by including its interest in assets, liabilities,
revenues and expenses by line. This change in accounting policy has had no impact on net assets or profit for the period,
for the year ended 31 December 2013 or for the six months ended 30 June 2013. Further details are provided in note 29.
Other pronouncements have not had a material impact on the financial statements, but have resulted in changes to
presentation or disclosure.
Taxes on income in interim periods are accrued using tax rates expected to be applicable to total annual earnings.
3 Seasonality and cyclicality
There is no material seasonality or cyclicality impacting interim financial reporting.
4 Segmental reporting
Operating segments are determined based on the internal reporting and operational management of the Group. The Group
is primarily a UK shopping centre focussed business and has one reportable operating segment.
The principal profit indicator used to measure performance is net rental income. An analysis of net rental income is given
below.
Re-presented Re-presented
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBPm GBPm GBPm
Revenue 261.1 250.3 511.6
-
- -
-
Rent receivable 218.1 210.6 430.3
Service charge income 43.0 39.7 81.3
-
- -
-
261.1 250.3 511.6
Rent payable (10.8) (11.1) (22.4)
Service charge costs (48.8) (44.1) (91.8)
Other non-recoverable costs (23.9) (20.7) (41.2)
Net rental income 177.6 174.4 356.2
5 Net other income
Re-presented Re-presented
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBPm GBPm GBPm
Dividends received from other investments 3.0 3.3 6.3
Management fees 0.4 – –
intu Digital (1.6) (0.9) (2.6)
Net other income 1.8 2.4 3.7
6 Administration expenses – exceptional
Exceptional administration expenses in the period totalled GBP11.9 million of which GBP10.9 million related to the acquisition of
intu Merry Hill, intu Derby and Sprucefield including GBP3.8 million of stamp duty.
7 Finance costs
Re-presented Re-presented
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBPm GBPm GBPm
On bank loans and overdrafts 89.9 90.6 181.7
On convertible bonds 3.7 3.7 7.5
On obligations under finance leases 1.8 1.7 3.4
Finance costs 95.4 96.0 192.6
No finance costs were capitalised in the six months ended 30 June 2014 nor in the comparative periods presented.
8 Finance income
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBPm GBPm GBPm
Interest receivable on loans to joint 3.1 - -
Other finance income 0.5 0.6 0.6
3.6 0.6 0.6
9 Other finance costs
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBPm GBPm GBPm
Amortisation of Metrocentre compound financial instruments 3.1 3.3 6.5
Costs of termination of derivative financial instruments and other fees(1) 20.9 112.2 158.5
Foreign currency movements(1) 1.9 (0.5)
Other finance costs 25.9 115.0 164.5
(1) Amounts totalling GBP22.8 million in the six months ended 30 June 2014 are treated as exceptional and therefore excluded from underlying earnings
(six months ended 30 June 2013 – GBP111.7 million, year end 31 December 2013 – GBP158.0 million).
10 Taxation
Taxation for the period:
Re-presented Re-presented
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBPm GBPm GBPm
Current tax 0.3 0.2 0.8
Deferred tax:
On investment and development property – – 0.2
On other investments (0.3) (0.3) (1.9)
On derivative financial instruments (0.3) (4.8) 3.2
On other temporary differences – (0.1) (2.9)
Deferred tax (0.6) (5.2) (1.4)
Total tax credit (0.3) (5.0) (0.6)
Movements in the provision for deferred tax:
Investment
and Derivative Other
development Other financial temporary
property investments instruments differences Total
GBPm GBPm GBPm GBPm GBPm
Deferred tax provision:
At 1 January 2014 12.0 8.4 (8.0) (0.4) 12.0
Recognised in the income statement – (0.3) (0.3) – (0.6)
Recognised in other comprehensive income – 0.6 – – 0.6
Parque Principado (note 26) (12.0) – – – (12.0)
At 30 June 2014 – 8.7 (8.3) (0.4) –
Unrecognised deferred tax asset:
At 1 January 2014 (0.3) – (23.1) (45.8) (69.2)
Income statement items – – (3.9) (8.2) (12.1)
At 30 June 2014 (0.3) – (27.0) (54.0) (81.3)
In accordance with the requirements of IAS 12 Income Taxes, the deferred tax asset has not been recognised on the
Group's balance sheet due to uncertainty over the level of profits that will be available in the non-REIT elements of the
Group in future periods.
11 Dividends
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBPm GBPm GBPm
Ordinary shares
Final dividend declared of 9.1(1) pence per share 96.2 94.4 94.4
2013 interim dividend paid of 4.6(1) pence per share – – 47.7
Dividends declared 96.2 94.4 142.1
Proposed 2014 interim dividend of 4.6 pence per share 59.7
(1)as adjusted by the bonus factor adjustment, see note 12 below.
In the six months to 30 June 2014, the Company offered shareholders the option to receive ordinary shares in lieu of the
cash 2013 final dividend of 10 pence per share under the Scrip Dividend Scheme. As a result of elections made by
shareholders 16,442,684 new ordinary shares of 50 pence each were issued on 20 May 2014 in lieu of dividends otherwise
payable, and GBP45.7 million of cash was retained in the business.
In 2013, the Company offered shareholders the option to receive ordinary shares in lieu of the cash 2012 final and 2013
interim dividends of 10 pence and 5 pence per share respectively under the Scrip Dividend Scheme. As a result of elections
made by shareholders 10,693,407 new ordinary shares of 50 pence each were issued on 4 June 2013 and 6,837,832 new
ordinary shares of 50 pence each were issued on 19 November 2013 in lieu of dividends otherwise payable, and
GBP45.2 million of cash was retained in the business.
12 Earnings per share
On 22 April 2014, the Company issued 278,241,628 new ordinary shares of 50 pence each through a rights issue. Further
details of the rights issue are provided in note 21. To reflect the rights issue, the number of shares previously used to
calculate basic, diluted and underlying earnings per share and headline earnings per share have been amended in the table
shown below. An adjustment factor of 1.098 has been applied, based on the ratio of an adjusted (ex-dividend) closing share
price of 301.1 pence per share on 28 March 2014, the business day before the shares started trading ex-rights and the
theoretical ex-rights price at that date of 274.2 pence per share. The adjusted share price has been calculated based on the
Company's share price of 311.1 per share on 28 March 2014 less the 2013 final dividend of 10 pence per share which the
rights issue shares were not entitled to.
(a) Earnings per share
Basic and diluted earnings per share as calculated in accordance with IAS 33 Earnings per Share. All earnings arise from
continuing operations.
Re-presented Re-presented
Six months ended Six months ended Year ended
30 June 2014 30 June 2013 31 December 2013
Pence Pence Pence
Earnings Shares per Earnings Shares per Earnings Shares per
GBPm million share GBPm million share GBPm million share
Basic earnings per share(1) 585.4 1,129.5 51.8p 192.8 1,004.0 19.2p 354.0 1,027.1 34.5p
Dilutive convertible bonds,
share options and share awards 12.9 124.6 6.6 122.1 13.3 122.4
Diluted earnings per share 598.3 1,254.1 47.7p 199.4 1,126.1 17.7p 367.3 1,149.5 32.0p
(1) The weighted average number of shares used for the calculation of basic earnings per share has been adjusted for shares held in the ESOP.
Basic earnings per share are stated after deducting interest on convertible bonds recognised directly in equity of GBP2.9 million in the six months
ended 30 June 2014 (six months ended 30 June 2013 – GBP2.9 million, year ended 31 December 2013 – GBP5.8 million) in accordance with IAS 33 Earnings per share.
(b) Headline earnings per share
Headline earnings per share has been calculated and presented as required by the Johannesburg Stock Exchange listing
requirements.
Re-presented Re-presented
Six months ended Six months ended Year ended
30 June 2014 30 June 2013 31 December 2013
Gross Net(1) Gross Net(1) Gross Net(1)
GBPm GBPm GBPm GBP GBPm GBPm
Basic earnings 585.4 192.8 354.0
Remove:
Revaluation of investment and development property (547.2) (534.0) (60.8) (59.3) (109.9) (108.8)
Gain on acquisition of businesses (1.2) (1.2) – – – –
Gain on part disposal of intu Uxbridge (0.6) (0.6) – – – –
Share of joint ventures' items (26.1) (26.1) (9.4) (9.4) (15.9) (15.9)
Share of associates' items (1.2) (1.2) (0.5) (0.5) (0.5) (0.5)
Headline earnings 22.3 123.6 228.8
Dilution(2) 12.9 6.6 13.3
Diluted headline earnings 35.2 130.2 242.1
Weighted average number of shares 1,129.5 1,004.0 1,027.1
Dilution(2) 124.6 122.1 122.4
Diluted weighted average number of shares 1,254.1 1,126.1 1,149.5
Headline earnings per share (pence) 2.0p 12.3p 22.3p
Diluted headline earnings per share (pence) 2.8p 11.6p 21.1p
(1) Net of tax and non-controlling interests
(2) The dilution impact is required to be included as for earnings per share as calculated in note 12(a) even where this is not dilutive for headline earnings per share.
(c) Underlying earnings per share
Underlying earnings per share is a non-GAAP measure but has been included as it is considered to be a key measure of the
Group's performance and an indication of the extent to which dividend payments are supported by current earnings.
Re-presented Re-presented
Six months ended Six months ended Year ended
30 June 2014 30 June 2013 31 December 2013
Pence Pence Pence
Earnings Shares per Earnings Shares per Earnings Shares per
GBPm million share GBPm million share GBPm million share
Basic earnings per share(1) 585.4 1,129.5 51.8p 192.8 1,004.0 19.2p 354.0 1,027.1 34.5p
Remove:
Revaluation of investment and
development property (547.2) (48.4)p (60.8) (6.1)p (109.9) (10.7)p
Gain on acquisition of businesses (1.2) (0.1)p – – – –
Gain on part disposal of
intu Uxbridge (0.6) (0.1)p – – – –
Exceptional administration costs 11.9 1.1p 16.5 1.6p 21.2 2.0p
Exceptional finance costs 22.8 2.1p 111.7 11.1p 158.0 15.4p
Change in fair value of
financial instruments 16.1 1.4p (183.1) (18.2)p (272.3) (26.5)p
Tax on the above (0.6) (0.1)p (5.2) (0.5)p (1.5) (0.1)p
Share of joint ventures' items (26.6) (2.4)p (10.3) (1.0)p (17.4) (1.7)p
Share of associates' items (1.2) (0.1)p (0.5) – (0.5) –
Non-controlling interests
in respect of the above 13.2 1.2p 7.0 0.7p 8.6 0.8p
Underlying earnings per share 72.0 1,129.5 6.4p 68.1 1,004.0 6.8p 140.2 1,027.1 13.7p
Dilutive convertible bonds,
share options and share awards 6.6 124.6 6.6 122.1 13.3 122.4
Underlying, diluted earnings
per share 78.6 1,254.1 6.3p 74.7 1,126.1 6.6p 153.5 1,149.5 13.4p
(1) The weighted average number of shares used for the calculation of basic earnings per share has been adjusted for shares held in the ESOP. Basic earnings per share are stated
after deducting interest on convertible bonds recognised directly in equity of GBP2.9 million in the six months ended 30 June 2014 (six months ended 30 June 2013 – GBP2.9 million, year
ended 31 December 2013 – GBP5.8 million) in accordance with IAS 33 Earnings per Share.
13 Net assets per share
As for earnings per share, the comparative number of shares used to calculate each measure of net assets per share have
been adjusted by the bonus factor of 1.098 to reflect the rights issue. See note 12 for more details.
(a) NAV per share (diluted, adjusted)
Re-presented Re-presented
As at 30 June 2014 As at 31 December 2013 As at 30 June 2013
Net NAV per Net NAV per Net NAV per
assets Shares share assets Shares share assets Shares share
GBPm million (pence) GBPm million (pence) GBPm million (pence)
NAV per share attributable to
owners of Intu Properties plc(1) 4,546.1 1,255.8 362p 3,518.8 1,055.5 333p 3,398.8 1,048.0 324p
Dilutive convertible bonds,
share options and share
awards 18.1 49.8 3.8 45.1 13.7 48.6
Diluted NAV per share 4,564.2 1,305.6 350p 3,522.6 1,100.6 320p 3,412.5 1,096.6 311p
Remove:
Fair value of derivative
financial instruments
(net of tax) 204.2 16p 196.8 18p 281.2 26p
Deferred tax on investment
and development property
and other investments 8.7 1p 20.4 2p 13.6 1p
Goodwill resulting from
recognition of deferred tax
liabilities – – (4.2) – – –
Share of joint ventures' items 4.5 – 1.3 – 2.0 –
Non-controlling interest
on the above – – (3.8) – (17.9) (2)p
Add:
Non-controlling interest
recoverable balance not
recognised 71.3 5p 71.3 6p 71.3 7p
NAV per share (diluted,
adjusted) 4,852.9 1,305.6 372p 3,804.4 1,100.6 346p 3,762.7 1,096.6 343p
(1) The number of shares used has been adjusted for shares held in the ESOP.
The comparative figures above have been restated for the bonus factor, as described in Note 12. This gives restated NAV
per share (diluted, adjusted) for 31 December 2013 of 346 pence per share. Adjusting the previously reported 31 December 2013
figures for the cash raised and the shares issued in the rights issue gives a pro forma NAV per share (diluted,
adjusted) of 335 pence per share.
(b) NNNAV per share (diluted, adjusted)
Re-presented Re-presented
As at 30 June 2014 As at 31 December 2013 As at 30 June 2013
Net NAV per Net NAV per Net NAV per
assets Shares share assets Shares share assets Shares share
GBPm million (pence) GBPm million (pence) GBPm million (pence)
NAV per share (diluted,
adjusted)(1) 4,852.9 1,305.6 372p 3,804.4 1,100.6 346p 3,762.7 1,096.6 343p
Fair value of derivative
financial instruments (net of
tax) (204.2) (16)p (196.8) (18)p (281.2) (26)p
Excess of fair value of debt
over book value (105.7) (8)p (56.9) (5)p (39.3) (4)p
Deferred tax on investment
and development property
and other investments (8.7) (1)p (20.4) (2)p (13.6) (1)p
Share of joint ventures' items (6.6) – (1.3) – (2.0) –
Non-controlling interests
on the above 6.1 – 6.3 1p 10.2 1p
NNNAV per share (diluted,
adjusted) 4,533.8 1,305.6 347p 3,535.3 1,100.6 322p 3,436.8 1,096.6 313p
(1) The number of shares used has been adjusted for shares held in the ESOP.
14 Investment and development property
GBPm
At 1 January 2014 – re-presented 7,278.7
Acquisition of intu Derby and Sprucefield (note 25) 458.4
Additions 23.6
Part disposal of interest in intu Uxbridge (note 26) (208.2)
Parque Principado (note 26) (142.2)
Surplus on revaluation 547.2
Foreign exchange movements (0.9)
At 30 June 2014 7,956.6
Re-presented Re-presented
As at As at As at
30 June 31 December 30 June
2014 2013 2013
GBPm GBPm GBPm
Balance sheet carrying value of investment and development property 7,956.6 7,278.7 7,053.2
Adjustment in respect of tenant incentives 91.2 96.4 91.1
Adjustment in respect of head leases (35.4) (36.0) (36.5)
Market value of investment and development property 8,012.4 7,339.1 7,107.8
The fair value of the Group's investment and development property as at 30 June 2014 was determined by independent
external valuers at that date. The valuations are in accordance with the Royal Institution of Chartered Surveyors ('RICS')
Valuation – Professional Standards 2014 and were arrived at by reference to market transactions for similar properties. Fair
values for investment properties are calculated using the present value income approach. The main assumptions
underlying the valuations are in relation to rent profile and yields.
15 Investments in joint ventures
The Group's principal investments in joint ventures include interests in St David's, Cardiff, intu Merry Hill and Parque
Principado, Spain. The Group's interest in all of its principal joint ventures is 50 per cent.
St David's, intu Parque
Cardiff Merry Hill Principado Other Total
GBPm GBPm GBPm GBPm GBPm
At 1 January 2014 – re-presented 194.6 – – 14.9 209.5
intu Merry Hill (note 25) – 403.8 – - 403.8
intu Uxbridge (note 26) – – – 43.0 43.0
Parque Principado (note 26) – – 71.3 - 71.3
Share of underlying profit 4.8 1.2 – 0.4 6.4
Share of other net profit 12.5 8.5 4.5 1.1 26.6
Share of profit 17.3 9.7 4.5 1.5 33.0
Loan advances 1.4 – – 0.4 1.8
Loan repayments (6.8) – (39.2) – (46.0)
Foreign exchange movements – – (0.6) – (0.6)
At 30 June 2014 206.5 413.5 36.0 59.8 715.8
Represented by:
Loans to joint venture 57.0 386.2 15.2 1.5 459.9
Equity 149.5 27.3 20.8 58.3 255.9
St David's,
Cardiff Other Total
GBPm GBPm GBPm
At 1 January 2013 – re-presented 179.0 12.9 191.9
Share of underlying profit 7.9 0.8 8.7
Share of other net profit 17.1 0.3 17.4
Share of profit 25.0 1.1 26.1
Investment in share capital – 0.5 0.5
Loan advances – 0.4 0.4
Loan repayments (9.4) – (9.4)
At 31 December 2013 – re-presented 194.6 14.9 209.5
Represented by:
Loans to joint venture 62.4 0.6 63.0
Equity 132.2 14.3 146.5
St David's,
Cardiff Other Total
GBPm GBPm GBPm
At 1 January 2013 – re-presented 179.0 12.9 191.9
Share of underlying profit 3.6 0.4 4.0
Share of other net profit 10.3 – 10.3
Share of profit 13.9 0.4 14.3
Investment in share capital – 0.5 0.5
Loan advances – 0.1 0.1
Loan repayments (4.6) – (4.6)
At 30 June 2013 – re-presented 188.3 13.9 202.2
Represented by:
Loans to joint venture 67.3 – 67.3
Equity 121.0 13.9 134.9
16 Investments in associates
GBPm
At 1 January 2014 35.8
Share of profit 1.2
Foreign exchange movements (0.2)
At 30 June 2014 36.8
The investments in associates largely represents the Group's 32.4 per cent holding in Prozone Capital Shopping Centres,
an Indian shopping centre developer whose shares are listed in India. The market price per share at 30 June 2014 was
INR21 (31 December 2013 – INR18, 30 June 2013 – INR 27), valuing the Group's interest at GBP10.2 million. In accordance
with IAS 28 the carrying value of the investment is based on the Group's accounting policies and therefore includes property
valuations undertaken in accordance with the valuation approach in note 14. It is considered utilising independent
valuations is the most appropriate valuation methodology at this time. Following an impairment review it was concluded no
impairment was required at this time.
17 Other investments
GBPm
At 1 January 2014 154.9
Revaluation 8.3
Foreign exchange movements (5.1)
At 30 June 2014 158.1
The Group holds 11.4 million units in a US venture controlled by Equity One, convertible into Equity One shares, and a
9.9 per cent stake in Provogue (India) Limited.
18 Cash and cash equivalents
Re-presented Re-presented
As at As at As at
30 June 31 December 30 June
2014 2013 2013
GBPm GBPm GBPm
Unrestricted cash 171.2 151.1 130.6
Restricted cash 1.4 5.6 1.8
172.6 156.7 132.4
Restricted cash at 30 June 2014 reflects amounts held to match the 2014 loan notes shown within borrowings.
19 Borrowings
Re-presented Re-presented
As at As at As at
30 June 31 December 30 June
2014 2013 2013
GBPm GBPm GBPm
Current
Bank loans and overdrafts 46.9 49.3 9.5
Commercial mortgage backed securities ("CMBS") notes 17.1 16.5 30.2
Loan notes 2014 1.4 1.6 1.8
Current borrowings, excluding finance leases 65.4 67.4 41.5
Finance lease obligations 2.9 3.5 1.8
68.3 70.9 43.3
Non-current
Revolving Credit Facility 2017 65.0 285.0 265.0
CMBS notes 2015 1.1 3.1 436.8
CMBS notes 2019 19.6 – –
CMBS notes 2022 51.4 51.6 51.7
CMBS notes 2024 87.2 – –
CMBS notes 2029 90.9 93.2 95.5
CMBS notes 2033 358.0 364.1 370.0
CMBS notes 2035 185.1 184.0 182.8
Bank loan 2014 – – 42.9
Bank loans 2016 733.6 586.9 465.7
Bank loan 2017 166.2 41.9 –
Bank loan 2018 347.2 346.6 346.0
3.875% bonds 2023 439.8 439.4 438.9
4.125% bonds 2023 475.3 475.2 –
4.625% bonds 2028 340.4 340.1 339.9
Debentures 2027 227.8 227.6 227.5
2.5% convertible bonds 2018 (note 22) 319.1 312.8 314.4
Non-current borrowings, excluding finance leases and Metrocentre
compound financial instrument 3,907.7 3,751.5 3,577.1
Metrocentre compound financial instrument 163.1 160.0 156.8
Finance lease obligations 32.5 32.5 34.7
4,103.3 3,944.0 3,768.6
Total borrowings 4,171.6 4,014.9 3,811.9
Cash and cash equivalents (172.6) (156.7) (132.4)
Net debt 3,999.0 3,858.2 3,679.5
The fair value of total borrowings as at 30 June 2014 was GBP4,277.3 million.
Details of the Group's net external debt are provided in the Other Information section.
20 Cash generated from operations
Re-presented Re-presented
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Notes GBPm GBPm GBPm
Profit before tax, joint ventures and associates 567.8 179.9 336.8
Remove:
Revaluation of investment and development property (547.2) (60.8) (109.9)
Gain on acquisition of businesses (1.2) – –
Gain on part disposal of intu Uxbridge (0.6) – –
Depreciation 1.0 0.8 1.8
Share-based payments 1.6 0.8 2.0
Lease incentives and letting costs (2.9) (4.2) (11.5)
Finance costs 7 95.4 96.0 192.6
Finance income 8 (3.6) (0.6) (0.6)
Other finance costs 9 25.9 115.0 164.5
Change in fair value of financial instruments 16.1 (183.1) (272.3)
Changes in working capital:
Change in trade and other receivables (16.9) (6.3) (4.3)
Change in trade and other payables 10.8 2.6 1.5
Cash generated from operations 146.2 140.1 300.6
21 Share capital
GBPm
Issued and fully paid
At 31 December 2013 – 973,845,701 ordinary shares of 50p each 486.9
Shares issued 147.6
At 30 June 2014 – 1,268,958,224 ordinary shares of 50p each 634.5
During the period the Company issued a total of 428,211 ordinary shares in connection with the exercise of options under
the Intu Properties plc Approved Share Option Scheme and the Intu Properties plc Unapproved Share Option Scheme.
On 22 April 2014, the Company undertook a 2 for 7 rights issue of 278,241,628 new ordinary shares at an issue price of
180.0 pence per share. Shareholders did not take up their rights for 2,747,838 shares, approximately 1 per cent of the total
rights issue shares. These shares were placed at 289.5 pence per share. The combined impact was that the Company
raised a total of GBP502.4 million, before GBP12.0 million of expenses, and as a result the Company's share capital increased by
GBP139.1 million and share premium by GBP351.3 million net of expenses charged to share premium.
On 20 May 2014, the Company issued 16,442,684 new ordinary shares to shareholders who elected to receive their 2013
final dividend in shares under the Scrip Dividend Scheme. The value of the Scrip Shares was calculated in accordance with
the terms of the Scrip Dividend Scheme, being the average middle market quotations for each day between 31 March to 4
22 Convertible bonds
2.5 per cent convertible bonds
In 2012 the Group issued GBP300.0 million, 2.5 per cent guaranteed convertible bonds due 2018 at par. The exchange price is
adjusted upon certain events including the rights issue on 22 April 2014 and the payment of dividends by the Company. At
30 June 2014, the exchange price was GBP3.6278 per ordinary share (31 December 2013 – GBP4.1199, 30 June 2013 –
GBP4.1840). These bonds are designated as at fair value though profit and loss and so are presented on the balance sheet at
fair value with all gains and losses taken to the income statement through the changes in fair values of financial instruments
line. They all remain outstanding at 30 June 2014.
At 30 June 2014, the fair value of the bonds was GBP319.1 million (31 December 2013 – GBP312.8 million 30 June 2013 –
GBP314.4 million). During the six months ended 30 June 2014, interest of GBP3.7 million has been recognised on these bonds within
finance costs (six months ended 30 June 2013 – GBP3.7 million, year ended 31 December 2013 – GBP7.5 million,).
3.75 per cent convertible bonds
In 2011 the Company issued GBP154.3 million, 3.75 per cent perpetual subordinated convertible bonds, with a conversion price
of GBP4.00 per ordinary share, in connection with the acquisition of intu Trafford Centre. Following the rights issue on 22 April
2014, the conversion price was adjusted to GBP3.64 per ordinary share. These are accounted for as equity at their fair value
on issue which totalled GBP143.7 million. The bonds were all outstanding at 30 June 2014 but on 2 July 2014 a conversion
notice was issued for all the bonds resulting in 42,394,779 new ordinary shares being issued.
During the six months ended 30 June 2014, interest of GBP2.9 million has been recognised on these bonds directly in equity
(six months ended 30 June 2013 – GBP2.9 million, year ended 31 December 2013 – GBP5.8 million).
23 Financial instruments
The table below presents the Group's financial assets and liabilities recognised at fair value.
June 2014
Level 1 Level 2 Level 3 Total
GBPm GBPm GBPm GBPm
Assets
Derivative financial instruments:
– Fair value through profit or loss – 20.7 – 20.7
Available for sale investments 1.4 156.7 – 158.1
Total assets 1.4 177.4 – 178.8
Liabilities
Convertible bonds
– Designated as at fair value through profit or loss 319.1 – – 319.1
Derivative financial instruments:
– Fair value through profit or loss – 233.2 – 233.2
Total liabilities 319.1 233.2 – 552.3
Fair value hierarchy
Level 1: Valuation based on quoted market prices traded in active markets.
Level 2: Valuation techniques are used, maximising the use of observable market data, either directly from market prices or
derived from market prices.
Level 3: Where one or more inputs to valuation are not based on observable market data. Valuations at this level are more
subjective and therefore more closely managed, including sensitivity analysis of inputs to valuation models. Such testing
has not indicated that any material difference would arise due to a change in input variables.
There were no transfers between Levels 1, 2 and 3 during the period.
Derivative financial instruments are initially recognised on the trade date at fair value and subsequently re-measured at fair
value. In assessing fair value the Group uses its judgement to select suitable valuation techniques and make assumptions
which are mainly based on market conditions existing at the balance sheet date. The fair value of interest rate swaps is
calculated by discounting estimated future cash flows based on the terms and maturity of each contract and using market
interest rates for similar instruments at the measurement date. These values are tested for reasonableness based upon
broker or counterparty quotes.
Available-for-sale investments, being investments intended to be held for an indefinite period, are initially and subsequently
measured at fair value. For listed investments, fair value is the current bid market value at the reporting date. For unlisted
24 Capital commitments
At 30 June 2014, the Board had approved GBP118.9 million of future expenditure for the purchase, construction, development
and enhancement of investment property. Of this, GBP77.1 million is contractually committed. In July 2014 the Board
approved a further GBP45.0 million of capital expenditure.
25 Acquisition of Derby, Sprucefield and Merry Hill joint venture
On 1 May 2014 the Group acquired interests in a number of entities for a consideration of GBP855.3 million. These entities
together hold a 100 per cent interest in intu Derby, a 50 per cent joint venture interest in intu Merry Hill and a 100 per cent
interest in Sprucefield retail park in Northern Ireland. Consideration was in cash and consisted of a payment on completion
of GBP867.8 million. It is anticipated the Group will receive a cash repayment of GBP12.5 million following final agreement of the
completion balance sheet. The cash flow statement therefore reflects the GBP867.8 million less cash acquired of GBP3.6 million.
Acquisition related costs of GBP10.9 million have been incurred in the period and recognised in the income statement in
exceptional administration expenses. Further details of the acquisition are given in the Operating Review.
The fair value of assets and liabilities acquired is set out in the table below.
Fair value
GBPm
Assets
Investment and development property 458.4
Investment in joint venture – intu Merry Hill 403.8
Cash and cash equivalents 3.6
Trade and other receivables 2.8
Total assets 868.6
Liabilities
Trade and other payables (12.1)
Total liabilities (12.1)
Net assets 856.5
Fair value of consideration paid 855.3
Gain on acquisition of businesses 1.2
The fair value of the assets, investment in joint venture and liabilities acquired exceeds the fair value of the consideration
and as a result a gain of GBP1.2 million is recognised in the income statement on acquisition.
During the period the acquired companies contributed GBP6.5 million to the revenue of the Group and GBP31.7 million to the profit
of the Group for the period.
As highlighted above there is an on-going process to agree the completion balance sheet and final consideration with the
vendor in accordance with the terms of the acquisition agreements. This may result in changes to the information presented
above. This will be finalised in time to be reflected in the Group's year end financial statements.
26 intu Uxbridge and Parque Principado
On 20 June 2014, the Group sold 80 per cent of its interest in Intu Uxbridge Limited, a wholly owned subsidiary, for
consideration of GBP174.6 million, before expenses of GBP1.3 million. The Group retains a 20 per cent interest in the company
and as a result of the terms governing the management of the business, this interest has been accounted for as a joint
venture from 20 June 2014. As a result of this transaction the Group has recorded a gain on disposal of GBP0.6 million in the
income statement, after GBP1.3 million of expenses. The cash flow statement records a net inflow of GBP173.3 million being cash
received of GBP173.8 million net of cash in the business of GBP0.5 million, with the balance of the consideration to be received in
the second half of the year on finalisation of the completion balance sheet.
During the period CPPIB, who held a 49 per cent non-controlling interest in Parque Principado S.à r.l., the holding company
for the Group's Parque Principado investment, exercised an option allowing them to acquire an additional one per cent
holding. Therefore in total now having a 50 per cent interest CPPIB acquired certain rights relating to the management of
the business. This has resulted in Parque Principado, previously accounted for as a subsidiary, being accounted for as a
joint venture from that date. No gain or loss arose on exercise of the option. As a result the assets and liabilities of Parque
Principado, previously recorded in the balance sheet at 100 per cent, have been reclassified, along with the relevant non-
controlling interest in reserves, to investments in joint ventures. The cash flow statement records an outflow of GBP11.6 million
representing consideration received of GBP1.3 million on exercise of the option, net of cash in the business of GBP12.9 million
which is reclassified as part of the investment in joint ventures.
27 Subsequent event
On 2 July 2014 certain Peel Group companies issued a conversion notice on all of the 3.75 per cent convertible bonds. On
7 July 2014, 42,394,779 new ordinary shares of 50 pence each were issued on conversion. See also note 22.
28 Related party transactions
As John Whittaker, Deputy Chairman and Non-Executive Director of Intu, is Chairman of the Peel Group, members of the
Peel Group are considered to be related parties. Richard Gordon, a non-executive Director of Intu, is the Gordon Family
Interest's representative on the Board therefore those companies comprising the Gordon Family Interest are considered to
be related parties. As part of the rights issue on 22 April 2014, the Peel Group agreed to underwrite their rights for which
the Group paid GBP971,726. The Gordon Family Shareholders agreed to underwrite part of their rights for which the Group
paid GBP236,940.
There have been no other related party transactions during the period that require disclosure under Section DTR 4.2.8 R of
the Disclosure and Transparency Rules or under IAS 34 Interim Financial Reporting except those disclosed elsewhere in
this condensed set of financial statements.
29 Change in accounting policy
As described in note 2 the Group has adopted IFRS 11 Joint Arrangements in preparing these interim financial statements.
The tables below show the impact on the income statements and balance sheets for the periods presented in these interim
financial statements. The adoption of IFRS 11 Joint Arrangements has no impact on the profit for the period attributable to
owners of Intu Properties plc and non-controlling interests, basic earnings per share and diluted earnings per share, to the
consolidated statement of comprehensive income or equity for current or comparative periods.
Six months Six months
ended 30 June ended 30 June
2014 before Impact of 2014
adoption IFRS 11 as presented
Consolidated income statement GBPm GBPm GBPm
Revenue 278.8 (17.7) 261.1
Net rental income 189.2 (11.6) 177.6
Net other income 2.0 (0.2) 1.8
Revaluation of investment and development property 573.3 (26.1) 547.2
Gain on acquisition of businesses 1.2 – 1.2
Gain on part disposal of intu Uxbridge 0.6 – 0.6
Administration expenses – ongoing (14.9) – (14.9)
Administration expenses – exceptional (11.9) – (11.9)
Operating profit 739.5 (37.9) 701.6
Finance costs (97.7) 2.3 (95.4)
Finance income 0.5 3.1 3.6
Other finance costs (25.9) – (25.9)
Change in fair value of financial instruments (15.6) (0.5) (16.1)
Net finance costs (138.7) 4.9 (133.8)
Profit before tax, joint ventures and associates 600.8 (33.0) 567.8
Current tax (0.3) – (0.3)
Deferred tax 0.6 – 0.6
Taxation 0.3 – 0.3
Share of profit of joint ventures – 33.0 33.0
Share of profit of associates 1.2 – 1.2
Profit for the period 602.3 – 602.3
Six months Year ended
ended Six months 31 December Year ended
30 June 2013 ended 2013 31 December
as previously Impact of 30 June 2013 as previously Impact of 2013
presented IFRS 11 re-presented presented IFRS 11 re-presented
Consolidated income statement GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 259.3 (9.0) 250.3 533.2 (21.6) 511.6
Net rental income 181.0 (6.6) 174.4 369.5 (13.3) 356.2
Net other income 2.4 – 2.4 3.8 (0.1) 3.7
Revaluation of investment an
development property 70.2 (9.4) 60.8 125.8 (15.9) 109.9
Administration expenses – ongoing (13.9) – (13.9) (27.7) 0.1 (27.6)
Administration expenses – exceptional (16.5) – (16.5) (21.2) – (21.2)
Operating profit 223.2 (16.0) 207.2 450.2 (29.2) 421.0
Finance costs (98.5) 2.5 (96.0) (197.2) 4.6 (192.6)
Finance income 0.6 – 0.6 0.6 – 0.6
Other finance costs (115.0) – (115.0) (164.5) – (164.5)
Change in fair value of
financial instruments 184.0 (0.9) 183.1 273.8 (1.5) 272.3
Net finance costs (28.9) 1.6 (27.3) (87.3) 3.1 (84.2)
Profit before tax, joint ventures
and associates 194.3 (14.4) 179.9 362.9 (26.1) 336.8
Current tax (0.3) 0.1 (0.2) (0.8) – (0.8)
Deferred tax 5.2 – 5.2 1.4 – 1.4
Taxation 4.9 0.1 5.0 0.6 – 0.6
Share of profit of joint ventures – 14.3 14.3 – 26.1 26.1
Share of profit of associates 0.6 – 0.6 0.5 – 0.5
Profit for the period 199.8 – 199.8 364.0 – 364.0
As at
30 June 2014 As at
before Impact of 30 June 2014
adoption IFRS 11 as presented
Consolidated balance sheet GBPm GBPm GBPm
Non-current assets
Investment and development property 8,773.9 (817.3) 7,956.6
Plant and equipment 6.2 – 6.2
Investment in joint ventures – 715.8 715.8
Investment in associates 36.8 – 36.8
Other investments 158.1 – 158.1
Goodwill 6.0 (2.0) 4.0
Derivative financial instruments 20.0 – 20.0
Trade and other receivables 106.2 (13.8) 92.4
9,107.2 (117.3) 8,989.9
Current assets
Trading property 0.1 (0.1) –
Trade and other receivables 115.7 (5.1) 110.6
Derivative financial instruments 0.7 – 0.7
Cash and cash equivalents 199.5 (26.9) 172.6
316.0 (32.1) 283.9
Total assets 9,423.2 (149.4) 9,273.8
Current liabilities
Trade and other payables (273.2) 27.3 (245.9)
Current tax liabilities (0.7) 0.1 (0.6)
Borrowings (147.0) 78.7 (68.3)
Derivative financial instruments (9.3) 0.4 (8.9)
(430.2) 106.5 (323.7)
Non-current liabilities
Borrowings (4,140.0) 36.7 (4,103.3)
Derivative financial instruments (224.7) 0.4 (224.3)
Other payables (3.2) – (3.2)
Deferred tax (5.8) 5.8 –
(4,373.7) 42.9 (4,330.8)
Total liabilities (4,803.9) 149.4 (4,654.5)
Net assets 4,619.3 – 4,619.3
As at
31 December As at As at As at
2013 31 December 30 June 2013 30 June
as previously Impact of 2013 as previously Impact of 2013
presented IFRS 11 re-presented presented IFRS 11 re-presented
Consolidated balance sheet GBPm GBPm GBPm GBPm GBPm GBPm
Non-current assets
Investment and development property 7,551.4 (272.7) 7,278.7 7,319.2 (266.0) 7,053.2
Plant and equipment 5.5 – 5.5 8.8 – 8.8
Investment in joint ventures – 209.5 209.5 – 202.2 202.2
Investment in associates 35.8 – 35.8 40.7 – 40.7
Other investments 154.9 – 154.9 170.5 – 170.5
Goodwill 8.2 – 8.2 4.0 – 4.0
Derivative financial instruments 25.1 – 25.1 22.4 – 22.4
Trade and other receivables 111.2 (12.0) 99.2 104.0 (12.0) 92.0
7,892.1 (75.2) 7,816.9 7,669.6 (75.8) 7,593.8
Current assets
Trading property 0.4 (0.2) 0.2 1.0 (0.8) 0.2
Trade and other receivables 81.6 (3.5) 78.1 78.2 (4.1) 74.1
Derivative financial instruments 0.7 – 0.7 0.7 – 0.7
Short-term investments 69.3 – 69.3 – – –
Cash and cash equivalents 165.5 (8.8) 156.7 139.9 (7.5) 132.4
317.5 (12.5) 305.0 219.8 (12.4) 207.4
Total assets 8,209.6 (87.7) 8,121.9 7,889.4 (88.2) 7,801.2
Current liabilities
Trade and other payables (245.8) 7.7 (238.1) (241.1) 7.8 (233.3)
Current tax liabilities (1.2) 0.3 (0.9) (0.6) 0.3 (0.3)
Borrowings (149.2) 78.3 (70.9) (43.4) 0.1 (43.3)
Derivative financial instruments (11.4) 1.3 (10.1) (14.0) – (14.0)
(407.6) 87.6 (320.0) (299.1) 8.2 (290.9)
Non-current liabilities
Borrowings (3,944.0) – (3,944.0) (3,846.6) 78.0 (3,768.6)
Derivative financial instruments (220.5) – (220.5) (308.3) 1.9 (306.4)
Other payables (4.4) 0.1 (4.3) (3.3) 0.1 (3.2)
Deferred tax (12.0) – (12.0) – – –
(4,180.9) 0.1 (4,180.8) (4,158.2) 80.0 (4,078.2)
Total liabilities (4,588.5) 87.7 (4,500.8) (4,457.3) 88.2 (4,369.1)
Net assets 3,621.1 – 3,621.1 3,432.1 – 3,432.1
INVESTMENT AND DEVELOPMENT PROPERTY (unaudited)
Property data – including Group's share of joint ventures
Market Initial Nominal
value yield "Topped-up" equivalent
GBPm Ownership Notes (EPRA) NIY (EPRA)(F) yield Occupancy
As at 30 June 2014
Subsidiaries
intu Trafford Centre 2,200.0 100% 3.8% 4.0% 4.5% 96%
intu Lakeside 1,248.0 100% 4.3% 4.4% 5.0% 96%
intu Metrocentre 922.0 90% A 4.4% 4.7% 5.4% 96%
intu Braehead 602.3 100% 4.0% 4.2% 5.8% 92%
Manchester Arndale 425.1 48% B 4.7% 4.8% 5.2% 97%
intu Derby 406.0 100% 6.6% 6.6% 6.2% 99%
intu Watford 335.0 93% 4.5% 4.9% 6.3% 95%
intu Victoria Centre 299.0 100% 3.9% 4.9% 6.2% 98%
intu Milton Keynes 267.0 100% 4.8% 4.8% 5.1% 99%
intu Eldon Square 265.1 60% 4.3% 5.1% 6.1% 97%
intu Chapelfield 260.0 100% 5.2% 5.3% 6.0% 98%
Cribbs Causeway 239.3 33% C 4.0% 4.5% 5.6% 92%
intu Bromley 166.3 64% 5.3% 5.6% 7.3% 91%
intu Potteries 162.0 100% 5.8% 5.8% 7.5% 92%
Other 215.3
Investment and development property
before Group's share of joint ventures 8,012.4
Joint ventures
St David's, Cardiff 282.5 50% 4.9% 5.3% 5.5% 94%
intu Merry Hill 415.9 50% 5.3% 5.3% 5.1% 95%
Parque Principado 75.1 50% 6.6% 7.1% 6.8% 100%
Other 56.7
Investment and development property
including Group's share of joint ventures 8,842.6 4.43% 4.66% 5.35% 96%(E)
As at 31 December 2013
including Group's share of joint ventures 7,623.8 4.74% 4.97% 5.79% 95%
Please refer to the glossary for the definition of terms.
Notes
A Interest shown is that of The Metrocentre Partnership in intu Metrocentre (90 per cent) and the Metro Retail Park (100 per cent).
The Group has a 60 per cent interest in the Metrocentre Partnership which is consolidated as a subsidiary of the Group.
B The Group's interest is through a joint operation ownership of a 95 per cent interest in Manchester Arndale, and a 90 per cent
interest in New Cathedral Street, Manchester.
C The Group's interest is through a joint operation ownership of a 66 per cent interest in The Mall at Cribbs Causeway and a
100 per cent interest in The Retail Park, Cribbs Causeway.
D Includes the Group's 67 per cent economic interest in intu Broadmarsh, the Group's 100 per cent economic interest
in Soar at intu Braehead and the Group's 100% economic interest in Sprucefield, Northern Ireland.
E The EPRA vacancy rate at 30 June 2014 was 2.9 per cent (31 December 2013 3.0 per cent).
F Net initial yield adjusted for the expiration of rent free periods and other unexpired lease incentives.
Analysis of capital return in the period – including Group's share of joint ventures
Market value
30 June 31 December Revaluation surplus *
2014 2013 30 June 2014
GBPm GBPm GBPm %
Like-for-like property 7,752.7 7,187.5 543.5 7.6
Acquisitions 890.3 – 24.3 n/a
Parque Principado and intu Uxbridge 118.8 357.0 5.6 n/a
Developments 80.8 79.3 (0.1) n/a
Total investment and development property 8,842.6 7,623.8 573.3 n/a
* Revaluation surplus includes amortisation of lease incentives and fixed head leases.
Additional property information – including Group's share of joint ventures
As at As at
30 June 31 December
2014 2013
GBPm GBPm
Passing rent 402.3 367.9
ERV 512.5 476.0
Weighted average unexpired lease 7.1 years 7.5 years
EPRA Cost Ratios – including Group's share of joint ventures
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBPm GBPm GBPm
EPRA Costs (including direct vacancy costs) 44.9 39.5 79.8
EPRA Costs (excluding direct vacancy costs) 35.8 33.6 66.3
Gross Rental Income 219.2 206.6 421.6
EPRA Cost Ratio (including direct vacancy costs) 20.5% 19.1% 18.9%
EPRA Cost Ratio (excluding direct vacancy costs) 16.4% 16.3% 15.7%
FINANCIAL COVENANTS (unaudited)
Intu (SGS) Finance plc and Intu (SGS) Finco Limited ('Secured Group Structure') at 30 June 2014
Interest Interest
Loan LTV LTV cover cover
GBPm Maturity covenant* actual covenant* actual
4.625 per cent bonds 350.0 2028
3.875 per cent bonds 450.0 2023
Term loan 351.8 2018
1,151.8 80% 46% 125% 225%
* Tested on the Security Group, the principle assets of which are intu Lakeside, intu Braehead, intu Watford and intu Victoria Centre. Further
details on the operating covenant regime are included in the 2013 Annual Report.
The Trafford Centre Finance Limited
There are no financial covenants on the intu Trafford Centre debt of GBP821.1 million at 30 June 2014. However a debt service charge
ratio is assessed quarterly and where this falls below specified levels certain restrictions come into force. The ratio of loan to
30 June 2014 market value is 39 per cent.
Intu Metrocentre Finance plc at 30 June 2014
Interest Interest
Loan LTV LTV cover cover
GBPm Maturity covenant actual covenant actual*
4.125 per cent bonds 485.0 2023 100% 53% 125% 219%
*The interest cover calculation presented above is based on a full 12 month period of income and finance costs, not just the
period since the issue of the bond.
Other asset-specific debt
Loan
outstanding at Loan to Interest Interest
31 July 2014(1) LTV 30 June 2014 cover cover
GBPm Maturity covenant market value(2) covenant actual(3)
intu Chapelfield 203.5 2016 n/a 78% 120% 158%
intu Bromley 115.1 2016 80% 69% 120% 189%
intu Merry Hill 191.3 2016 65% 46% 150% 354%
intu Derby 202.5 2016 70% 50% 150% 648%
Sprucefield 30.0 2016 65% 44% 150% 521%
Barton Square 42.5 2017 65% 49% 175% 201%
intu Milton Keynes(4) 125.3 2017 65% 47% 150% 305%
Parque Principado (Euros) 94.7 2019 65% 55% 150% 275%
The loans secured on St David's, Cardiff (GBP79 million) and Soar, previously Braehead Leisure, (GBP43 million) will be repaid in August and
September respectively. The financial covenants in respect of these two loans are currently being complied with.
Notes
(1) The loan values are the principal balances outstanding at 31 July 2014, which take into account any principal repayments
made up to 31 July 2014. The balance sheet value of the loans includes unamortised fees.
(2) The Loan to 30 June 2014 market value provides an indication of the impact the 30 June 2014 property valuations
undertaken for inclusion in the condensed financial statements could have on the LTV covenants. The actual timing and
manner of testing LTV covenants varies and is loan specific.
(3) Based on latest certified figures, calculated in accordance with loan agreements, which have been submitted between 30
June 2014 and 31 July 2014. The calculations are loan specific and include a variety of historic, forecast and in certain
instances a combined historic and forecast basis.
(4) During the period, the loan facility was extended by one year.
Intu Debenture plc at 30 June 2014
Capital Capital Interest Interest
Loan cover cover cover cover
Maturity GBPm covenant actual covenant actual
2027 227.8 150% 210% 100% 104%
The debenture is currently secured on the Group's interests in intu Potteries, intu Eldon Square, and intu Broadmarsh.
Should the capital cover or interest cover test be breached, Intu Debenture plc (the 'issuer') has three months from the date
of delivery of the valuation or the latest certificate to the Trustees to make good any deficiencies. The issuer may withdraw
property secured on the debenture by paying a sum of money or through the substitution of alternative property provided
that the loan to value and income tests are satisfied immediately following the substitution.
Financial covenants on corporate facilities at 30 June 2014
Interest Interest Borrowings/ Borrowings/
Net worth Net worth cover cover net worth net worth
covenant actual covenant* actual covenant* actual
GBP375m facility, maturing in 2017* GBP750.0m GBP2,630.2m 120% 178% 110% 57%
GBP300m due in 2018 - 2.5 per cent n/a n/a n/a n/a 175% 8%
convertible bonds**
* Tested on the Borrower Group which excludes, at the Group's election, certain subsidiaries with asset-specific finance. The
facility is secured on the Group's investments in Manchester Arndale and Cribbs Causeway.
** Tested on the Group excluding, at the Group's election, the borrowings of certain subsidiaries with asset-specific finance.
GROUP INCLUDING SHARE OF JOINT VENTURES (unaudited)
The information below is presented to show the Group including its share of joint ventures. A reconciliation from the
amounts shown in the Group's income statement and balance sheet is also shown.
Underlying profit for the six months ended 30 June 2014
Group
Group's Share of including
income joint share of joint
statement ventures ventures
GBPm GBPm GBPm
Net rental income 177.6 11.6 189.2
Net other income 1.8 0.2 2.0
179.4 11.8 191.2
Administration expenses (14.9) – (14.9)
Underlying operating profit 164.5 11.8 176.3
Finance costs (95.4) (2.3) (97.7)
Finance income 3.6 (3.1) 0.5
Other finance costs (3.1) – (3.1)
Underlying net finance costs (94.9) (5.4) (100.3)
Underlying profit before tax and associates 69.6 6.4 76.0
Tax on underlying profit (0.3) – (0.3)
Share of underlying profit of joint ventures 6.4 (6.4) –
Share of underlying profit of associates – – –
Remove amounts attributable to non-controlling interests (0.8) – (0.8)
Interest on convertible bonds deducted directly in equity (2.9) – (2.9)
Underlying earnings 72.0 – 72.0
Balance sheet as at 30 June 2014
Group
Group's Share of including
balance joint share of joint
sheet ventures ventures
GBPm GBPm GBPm
Assets
Investment and development property 7,956.6 817.3 8,773.9
Investments in joint ventures 715.8 (715.8) –
Derivative financial instruments 20.7 – 20.7
Cash and cash equivalents 172.6 26.9 199.5
Other assets 408.1 21.0 429.1
Total assets 9,273.8 149.4 9,423.2
Liabilities
Borrowings (4,171.6) (115.4) (4,287.0)
Derivative financial instruments (233.2) (0.8) (234.0)
Other liabilities (249.7) (33.2) (282.9)
Total liabilities (4,654.5) (149.4) (4,803.9)
Net assets 4,619.3 – 4,619.3
The table below provides a reconciliation between the components of net debt included on the Group's balance sheet and net
external debt including the Group's share of joint ventures debt and cash.
Net external debt
30 June 31 December 30 June
2014 2013 2013
GBPm GBPm GBPm
Total borrowings 4,171.6 4,014.9 3,811.9
Cash and cash equivalents (172.6) (156.7) (132.4)
Net debt 3,999.0 3,858.2 3,679.5
Metrocentre compound financial instrument (163.1) (160.0) (156.8)
Short-term investments(1) – (69.3) –
Net external debt – before Group's share of joint ventures 3,835.9 3,628.9 3,522.7
Add share of borrowing of joint ventures 115.4 78.3 78.1
Less share of cash of joint ventures (26.9) (8.8) (7.5)
Net external debt – including Group's share of joint ventures 3,924.4 3,698.4 3,593.3
Analysed as:
Debt including Group's share of joint ventures 4,123.9 3,933.2 3,733.2
Cash including Group's share of joint ventures (199.5) (165.5) (139.9)
Short-term investments(1) – (69.3) –
Net external debt including Group's share of joint ventures 3,924.4 3,698.4 3,593.3
(1) Short-term investments represent CMBS notes issued in respect of intu Metrocentre and received as cash in February 2014 following refinancing of this borrowing
Debt to assets ratio
30 June 31 December 30 June
2014 2013 2013
GBPm GBPm GBPm
Market value of investment and development property 8,842.6 7,623.8 7,386.2
Net external debt (3,924.4) (3,698.4) (3,593.3)
Debt to assets ratio 44.4% 48.5% 48.6%
Interest rate swaps
The table below sets out the nominal amount and average rate of hedging, excluding lenders' margins, in place under
current and forward starting swap contracts.
Average
Nominal amount rate
GBPm %
In effect on or after:
1 year 1,791 3.39
2 years 1,862 3.45
5 years 804 4.99
10 years 678 4.82
15 years 668 4.83
20 years 443 4.59
UNDERLYING PROFIT STATEMENT (unaudited)
For the six months ended 30 June 2014
The underlying profit information in the table below shows the Group including its share of joint ventures which have been
included on a line by line basis.
Six months Six months
ended Six months ended Year ended
30 June ended 31 December 31 December
2014 30 June 2013 2013 2013
GBPm GBPm GBPm GBPm
Net rental income 189.2 181.0 188.5 369.5
Net other income 2.0 2.4 1.4 3.8
191.2 183.4 189.9 373.3
Administration expenses (14.9) (13.9) (13.8) (27.7)
Underlying operating profit 176.3 169.5 176.1 345.6
Finance costs (97.7) (98.5) (98.7) (197.2)
Finance income 0.5 0.6 – 0.6
Other finance costs (3.1) (3.3) (3.2) (6.5)
Underlying net finance costs (100.3) (101.2) (101.9) (203.1)
Underlying profit before tax and associates 76.0 68.3 74.2 142.5
Tax on underlying profit (0.3) (0.3) (0.6) (0.9)
Share of underlying profit of associates – 0.1 (0.1) –
Remove amounts attributable to non-controlling interests (0.8) 2.9 1.5 4.4
Interest on convertible bonds deducted directly in equity (2.9) (2.9) (2.9) (5.8)
Underlying earnings 72.0 68.1 72.1 140.2
Underlying earnings per share (pence) 6.4p 6.8p 6.9p 13.7p
Weighted average number of shares 1,129.5 1,004.0 1,049.7 1,027.1
DIVIDENDS
The Directors of Intu Properties plc have announced an interim dividend per ordinary share (ISIN GB0006834344) of
4.6 pence (2013 – 4.6 pence adjusted for rights issue bonus factor, actual paid – 5.0 pence) payable on 25 November 2014
(see salient dates below).
The dividend will be partly paid as a Property Income Distribution ("PID") and partly paid as a non-PID. The PID element
will be subject to deduction of a 20 per cent withholding tax unless exemptions apply (please refer to the PID Special note
below). Any non-PID element will be treated as an ordinary UK company dividend.
Shareholders will be advised of the PID/non-PID split no later than Friday 3 October 2014.
The calculation for shareholders electing to receive scrip shares will be based on a combination of non-PID and PID, to be
determined by the Board. The basis of calculation will be included in the advice to shareholders to be issued no later than
3 October 2014.
Dates
The following are the salient dates for the payment of the interim dividend:
Thursday, 9 October 2014 Sterling/Rand exchange rate struck.
Friday, 10 October 2014 Sterling/Rand exchange rate and dividend amount in SA currency announced.
Monday, 20 October 2014 Ordinary shares listed ex-dividend on the JSE, Johannesburg
Thursday, 23 October 2014 Ordinary shares listed ex-dividend on the London Stock Exchange.
Friday, 24 October 2014 Record date for interim dividend in London and Johannesburg.
Friday, 24 October 2014 UK shareholders only: Last date for receipt of Tax Exemption Declaration forms to
permit dividends to be paid gross.
Tuesday, 25 November 2014 Dividend payment day for shareholders
Note: If a scrip dividend alternative were to be offered, the deadline for submission of valid election forms will be 24 October 2014 for shareholders on the
South African register and 31 October 2014 for shareholders on the UK register.
South African shareholders should note that, in accordance with the requirements of Strate, the last day to trade cum-
dividend will be Friday, 17 October 2014 and that no dematerialisation or rematerialisation of shares will be possible from
Monday, 20 October to Friday, 24 October 2014 inclusive. No transfers between the UK and South African registers may
take place from Wednesday, 8 October to Sunday, 26 October 2014 inclusive.
PID SPECIAL NOTE:
UK shareholders:
For those who are eligible for exemption from the 20 per cent withholding tax and have not previously registered for
exemption, an HM Revenue & Customs ("HMRC") Tax Exemption Declaration is available for download from the
"Investors" section of the Intu Properties plc website (intugroup.co.uk), or on request to our UK registrars, Capita Asset
Services. Validly completed forms must be received by Capita Asset Services no later than the Record Date, Friday 24
October 2014; otherwise the dividend will be paid after deduction of tax.
South African and other non-UK shareholders:
South African shareholders may apply to HMRC after payment of the dividend for a refund of the difference between the 20
per cent withholding tax and the UK/South African double taxation treaty rate of 15 per cent. Other non-UK shareholders
may be able to make similar claims for a refund of UK withholding tax deducted. Refund application forms for all non-UK
shareholders are available for download from the "Investors" section of the Intu Properties plc website (intugroup.co.uk), or
on request to our SA registrars, Computershare, or HMRC. UK withholding tax refunds are not claimable from Intu
Properties plc, the South African Revenue Service ("SARS") or other national authorities, only from the UK's HMRC.
Additional information on PIDs can be found at www.intugroup.co.uk/investors/shareholders-bondholders/real-estate-
investment-trust/
The above does not constitute advice and shareholders should seek their own professional guidance. Intu Properties plc
does not accept liability for any loss suffered arising from reliance on the above.
GLOSSARY
ABC1 customers
Proportion of customers within UK social groups A, B and C1, defined as members of households whose chief earner's occupation is
professional, higher or intermediate management, or supervisory.
Annual property income
The Group's share of passing rent plus the external valuers' estimate of annual excess turnover rent and sundry income such as that
from car parks and mall commercialisation.
Debt to assets ratio
Net external debt divided by the market value of investment and development property.
Diluted figures
Reported amounts adjusted to include the effects of dilutive potential shares issuable under convertible bonds and employee incentive
arrangements.
Earnings per share
Profit for the period attributable to owners of Intu divided by the weighted average number of shares in issue during the period.
EPRA
European Public Real Estate Association, the publisher of Best Practice Recommendations intended to make financial statements of
public real estate companies in Europe clearer, more transparent and comparable.
ERV (estimated rental value)
The external valuers' estimate of the Group's share of the current annual market rent of all lettable space net of any non-recoverable
charges, before bad debt provision and adjustments required under IFRS regarding tenant lease incentives.
Exceptional items
Exceptional items are those items that in the Directors' view are required to be separately disclosed by virtue of their size or incidence
to enable a full understanding of the Group's financial performance.
Headline rent ITZA
Annual contracted rent per square foot after expiry of concessionary periods in terms of zone A.
Interest cover
Underlying operating profit excluding trading property related items divided by the net finance cost plus interest on convertible bonds
recognised in equity excluding the change in fair value of financial instruments, exceptional finance costs and amortisation of
compound financial instruments.
Interest rate swap
A derivative financial instrument enabling parties to exchange interest rate obligations for a predetermined period. These are used by
the Group to convert floating rate debt to fixed rates.
IPD
Investment Property Databank Ltd, producer of an independent benchmark of property returns.
Like-for-like property
Investment property which has been owned throughout both periods without significant capital expenditure in either period, so that
income can be compared on a like-for-like basis. For the purposes of comparison of capital values, this will also include assets owned
at the previous reporting period end but not throughout the prior period.
Long-term lease
A lease with a term certain of at least five years.
Loan-to-value (LTV)
The ratio of attributable debt to the market value of an investment property.
NAV per share (diluted, adjusted)
NAV per share calculated on a diluted basis and adjusted to reflect any unrecognised surplus on trading properties (net of tax), to
remove the fair value of derivatives (net of tax), to remove goodwill resulting from the recognition of deferred tax liabilities, and to
remove deferred tax on investment and development property and other investments.
Net asset value (NAV) per share
Net assets attributable to owners of Intu Properties plc divided by the number of ordinary shares in issue at the period end.
Net external debt
Net debt for the Group including its share of joint ventures after removing the Metrocentre compound financial instrument and, for 31
December 2013, short-term investments representing CMBS notes issued in respect of intu Metrocentre and received as cash in
February 2014.
Net initial yield (EPRA)
Annualised net rent on investment property (after deduction of revenue costs such as head rent, running void, service charge after
shortfalls, empty rates and merchant association contribution) expressed as a percentage of the gross market value before deduction of
theoretical acquisition costs, consistent with EPRA's net initial yield and as provided by the Group's independent external valuers.
Net rental income
The Group's share of net rents receivable as shown in the income statement, having taken due account of non-recoverable costs, bad
debt provisions and adjustments to comply with IFRS including those regarding tenant lease incentives.
NNNAV per share (diluted, adjusted)
NAV per share (diluted, adjusted) adjusted to include the fair values of derivatives, debt, and deferred taxes.
Nominal equivalent yield
Effective annual yield to a purchaser from the assets individually at market value after taking account of notional acquisition costs
assuming rent is receivable annually in arrears, reflecting ERV but disregarding potential changes in market rents, as determined by the
Group's independent external valuers.
Occupancy
The passing rent of let and under offer units expressed as a percentage of the passing rent of let and under offer units plus ERV of un-let
units, excluding development and recently completed properties. Units let to tenants in administration and still trading are treated as let
and those no longer trading are treated as un-let.
Passing rent
The Group's share of contracted annual rents receivable at the balance sheet date. This takes no account of accounting adjustments
made in respect of rent free periods or tenant incentives, the reclassification of certain lease payments as finance charges or any
irrecoverable costs and expenses, and does not include excess turnover rent, additional rent in respect of unsettled rent reviews or sundry
income such as from car parks etc. Contracted annual rents in respect of tenants in administration are excluded.
PMA
Property Market Analysis LLP, a producer of property market research and forecasting.
Property Income Distribution (PID)
A dividend, generally subject to UK withholding tax at the basic rate of income tax, that a UK REIT is required to pay to its shareholders
from its qualifying rental profits. Certain classes of shareholder may qualify to receive a PID gross, shareholders should refer to
intugroup.co.uk for further information. The Group can also pay non-PID dividends which are not subject to UK withholding tax.
Real Estate Investment Trust (REIT)
A tax regime which exempts from corporation tax the rental profits and capital gains of the REIT's qualifying investment property activities.
In the UK, the regime must be elected into and the REIT must meet certain ongoing qualifications, including the requirement to distribute
at least 90 per cent of qualifying rental profits to shareholders. The Group elected for REIT status with effect from 1 January 2007.
Scrip Dividend Scheme
The Group offers shareholders the opportunity to participate in the Scrip Dividend Scheme. This enables participating shareholders to
receive shares instead of cash when a Scrip Alternative is offered for a particular dividend.
Tenant (or lease) incentives
Any incentives offered to occupiers to enter into a lease. Typically incentives are in the form of an initial rent free period and/or a cash
contribution to fit–out the premises. Under IFRS the value of incentives granted to tenants is amortised through the income statement on
a straight-line basis over the lease term.
Topped-up NIY (EPRA)
Net initial yield adjusted for the expiration of rent free periods and other unexpired lease incentives.
Total financial return
The change in NAV per share (diluted, adjusted) plus dividends per share paid in the period expressed as a percentage of opening NAV
per share (diluted, adjusted).
Trading property
Property held for trading purposes rather than to earn rentals or for capital appreciation and shown as a current asset in the balance sheet.
Underlying earnings per share (EPS)
Earnings per share adjusted to exclude valuation movements, exceptional items and related tax.
Underlying figures
Amounts described as underlying exclude valuation movements, exceptional items and related tax.
Vacancy rate (EPRA)
The ERV of vacant space divided by total ERV.
Yield shift
A movement (usually expressed in basis points) in the yield of a property asset.
Sponsor: Merrill Lynch South Africa Proprietary Limited
Date: 31/07/2014 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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