Wrap Text
Interim Report for the Six Months Ended 30 June 2015
INTU PROPERTIES PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: ITU
Press Release
30 JULY 2015
INTU PROPERTIES PLC
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2015
David Fischel, Chief Executive, commented:
"Intu has recorded a strong first half of 2015 with 6 per cent growth in underlying earnings per share and a GBP162
million (1.9 per cent) revaluation surplus, taking our total property value to GBP9.5 billion.
We were particularly encouraged by the continued improvement in retailer demand for quality space in pre-
eminent destinations, with leases signed in the period in aggregate a healthy 12 per cent above previous
passing rent and we have a promising number of further lettings in the pipeline.
Retailers are responding positively to taking space in centres where change and investment are underway.
We attract over 400 million customer visits a year and aim to provide them with a great experience which
encourages them to come more often, stay for longer and spend more with our retailers. Intu has the UK's
most digitally connected centres with an active online marketing database of over two million subscribers.
Our ten year UK investment programme has risen to GBP1.5 billion. We are on site with leisure and restaurant
projects at five separate centres and expect to start the major retail and leisure extension at intu Watford in the
final quarter of 2015, turning the centre into a major north of London regional destination.
We continue to seize the significant opportunity we see in Spain to create a quality business of scale in an
attractive market. We acquired our second top 10 centre earlier this year – Puerto Venecia in Zaragoza – and
exercised our option on land near Malaga where we expect to begin construction next year on a major shopping
resort to be called intu Costa del Sol.
On the broader retail landscape, we were pleased with the news from the recent UK Budget that Sunday
Trading laws are to be reviewed. Sunday Trading legislation is vastly out of date in today's multi-channel world
and creates unfairness amongst retailers. As such, we believe the case for deregulation is overwhelming; it
would generate substantial economic growth, create thousands of extra jobs and would benefit our customers,
the vast majority of whom are telling us that they want the flexibility to shop where and when they want.
In summary, we are now clearly seeing the benefits of our strategy of the last few years, combining selective
quality acquisitions, a focus on tenant mix, improved customer experience, both on and offline, and continuing
investment in our existing centres. As previously guided, we remain on track to return to a positive like-for-like
rental performance for the full year and are well positioned to deliver a more meaningful uplift in 2016."
Investor conference call
A presentation to analysts and investors will take place at UBS, 1 Finsbury Avenue, London EC2 at 09.30BST on
30 July 2015. The presentation will also be available to international analysts and investors through a live audio
call and webcast. The presentation and a copy of this announcement will be available on the Group's 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: Justin Griffiths, Powerscourt +44 (0)20 7250 1446
SA: Frédéric Cornet, Instinctif Partners +27 (0)11 447 3030
First half highlights
Six months ended Six months ended
30 June 2015 30 June 2014
Net rental income(1) GBP207.6m GBP189.2m
Underlying earnings GBP88.7m GBP72.0m
Property revaluation surplus(1) GBP162.2m GBP573.3m
Profit for the period GBP262.3m GBP602.3m
Earnings per share (underlying) 6.8p 6.4p
Dividend per share 4.6p 4.6p
As at As at
30 June 2015 31 December 2014
Market value of investment properties(1) GBP9,511m GBP8,963m
Net external debt(1) GBP4,276m GBP3,963m
Net asset value per share (diluted, adjusted) 385p 379p
Debt to asset ratio(1) 45.0% 44.2%
(1) Including Group share of joint ventures
Please refer to glossary for definition of terms
- Significant increase in net rental income and underlying earnings from recent acquisitions. Encouraging
improvement in like-for-like net rental income trend (H1 2015: -1.0 per cent due to units held for
redevelopment; 2014: -3.2 per cent)
- Profit for the period of GBP262 million, including GBP162 million property revaluation surplus (2014 – GBP602 million
profit, including GBP573 million of property revaluation surplus)
- Property revaluation surplus of 1.9 per cent like-for-like, partially attributable to rental value growth of 0.6 per
cent. Out-performed the IPD monthly retail property index growth of 1.2 per cent which included rental value
growth of 0.1 per cent
- Underlying earnings per share increased by 6 per cent to 6.8 pence reflecting not only the positive impact of
acquisitions but also lower average finance costs
- Continuing improvement in retailer demand for quality space, both in the UK and Spain, with 107 long term
leases signed for GBP18 million new annual rent, 12 per cent above previous passing rent and in line with
valuation assumptions. Strong pipeline of potential lettings
- Robust operating metrics for occupancy and footfall with estimated retailer sales up 3.4 per cent
- Net asset value per share increased to 385 pence, a total financial return for the period of 4 per cent
- Market value of properties increased to GBP9.5 billion from GBP9.0 billion with the acquisition of Puerto Venecia in
Zaragoza, Spain and revaluation surplus
- Five projects with a total cost of over GBP100 million are on site including leisure and restaurants at intu Potteries
and intu Victoria Centre and major restaurant projects at intu Eldon Square, intu Metrocentre and intu Bromley
- Four major developments at intu Watford, intu Broadmarsh, intu Lakeside and intu Costa del Sol, with a total
cost of around GBP650 million (anticipated Intu cost of GBP400 million) are on target to commence in the next 18 months
Presentation of information
Amounts are presented including the Group's share of joint ventures. See Financial Review for details.
Contents
Chief Executive's Review
UK Market Review
Operating Review
Top Properties
Financial Review
Key Risks and Uncertainties
Directors' Responsibility Statement
Independent Review Report
Unaudited Financial Information
Other Information
Dividends
Glossary
About Intu
Intu is the leading owner and manager of prime regional shopping centres in the UK.
A FTSE 100 company, Intu owns and operates many of the UK's biggest and most popular retail and leisure destinations,
including nine of the top 20, incorporating super-regional centres such as intu Trafford Centre, intu Lakeside and intu
Metrocentre, together with a number of city centre locations from Watford to Newcastle.
With 23 million sq. ft. of space hosting top UK and international retailers from Apple to Zara, Intu centres attract some 400
million customer visits from over half of the UK's population every year.
Intu has a UK investment pipeline of GBP1.5 billion over the next ten years to add 2.6 million sq. ft. of new retail and leisure space,
of which 1.7 million sq. ft. is already consented. Major projects due to be underway soon include the extension and
refurbishment at intu Watford and the leisure expansion at intu Lakeside.
Intu also has a growing presence in the Spanish market, owning two of Spain's top 10 centres, intu Asturias in Oviedo, and
Puerto Venecia in Zaragoza, a development site near Málaga and development options on a further three sites in Valencia,
Palma and Vigo.
Intu creates a compelling experience for its customers, both on and offline, delivering on its brand promise to provide the most
digitally connected shopping centres, world class service and events with a difference. National initiatives include the annual
'Everyone's Invited' event which in 2014 increased footfall that weekend by an average of 13%. Our objective is for customers
to come more often and stay for longer, in turn helping intu's retailers to flourish.
With some 115,000 people employed at Intu's centres in the UK, representing some 4% of the UK's total retail workforce, Intu is
fully committed to supporting its local communities and the wider environment and is proud to have received widespread
recognition for its Corporate Responsibility achievements, including the coveted BitC CommunityMark. 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.
CHIEF EXECUTIVE'S REVIEW
We have had a strong first half of 2015, making progress on all four of our main objectives. Our long-standing focus is on
developing, investing in and creatively managing the very best shopping centres. We have recorded further revaluation
gains with retailers continuing to look for extra physical space, especially flagship stores in prime centres such as those
owned by Intu. With improving conditions, the Group's net asset value per share and underlying earnings per share have
increased in the period.
Overview of first half 2015 activity
We are clearly seeing the benefits of our strategy of very selective quality acquisitions in the last few years combined with
enhancing existing assets focusing on the retail and leisure tenant mix and improved customer experience.
Specifically, in the period we have progressed each of our key priorities:
- Optimising asset performance
- valuation gains from improved rental values and some yield compression, with particularly strong
performance from assets where we have recently been investing
- an encouraging level of lettings completed and a strong pipeline of potential lettings, demonstrating
strengthening retailer demand and driving improving trends in net rental income
- continued high level of occupancy at 95 per cent and a 3.4 per cent increase in retailer sales in the period
- Seizing the growth opportunity in Spain
- completed the acquisition of Puerto Venecia, valued at EUR450.8 million, and, subject to final regulatory
approvals, entered into a joint venture agreement with CPPIB to take a 50 per cent stake in the centre
- introduced the intu brand to Spain with intu Asturias, formerly Parque Principado, Oviedo
- delivered positive operating metrics from these two top 10 centres
- exercised option to take ownership of development site and furthered tenant demand for the planned
shopping resort development, intu Costa del Sol, near Málaga. We anticipate being on site in 2016
- Making the brand count
- registrants to in-centre Wi-Fi now over two million, with our online active marketing database also over two
million subscribers delivering above average industry metrics on email marketing campaigns
- net promoter score continues to improve through world class customer service and the quality of our
national events programmes as we benefit from intu's national profile
- ongoing improvements to our transactional website, with visits up 40 per cent in the period
- UK development momentum
- development programme increased from GBP1.3 billion to GBP1.5 billion and on track, moving forward with our
timetable
- mall refreshment and restaurant quarter at intu Victoria Centre and leisure extension at intu Potteries due
to be completed in the latter part of 2015
- commenced three restaurant projects at intu Eldon Square (20 units), intu Metrocentre (11 units) and intu
Bromley (five units) due to be completed in 2016
- on target for commencing the extension of intu Watford in late 2015 and starting in 2016 the
redevelopment of intu Broadmarsh and introducing significant leisure attractions to intu Lakeside
Our financial position is robust with interest cover at 1.85x, the debt to asset ratio at 45.0 per cent and GBP500 million cash and
available facilities at 30 June 2015.
Outlook and priorities
We are encouraged by the continuing improvement in consumer sentiment and growth in national retail sales. Our pipeline
of lettings for both existing space and ongoing projects is indicative of increased retailer appetite for a physical presence in
intu 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 per cent of Group ERV.
We highlighted in our 2014 annual results that this factor would continue to impact like-for-like rents in the first half of 2015,
but would be more than offset by improvements in the second half of 2015 to deliver a return to like-for-like net rental
income growth for the full year assuming no material tenant failures. These results are in line with our expectations set out
at the start of the year and we re-iterate this message, positioning ourselves for more meaningful uplifts in 2016.
UK MARKET REVIEW
Investment market
Investment demand remains strong for prime regional shopping centres, an asset class where global institutions are
prepared to invest outside of London and the South East.
Shopping centre development remains at low levels with the majority of activity focused on extensions and reconfigurations.
The combination of strong investor demand, limited supply and the improving underlying economy should see continued
strengthening in valuations.
Occupier market
The majority of economic indicators show improving markets, in particular those that impact on retail. We continue to see
wage growth rising faster than inflation providing the customer with more disposable income. The Asda benchmark index
shows their measure of household income 11 per cent higher than the previous year.
Consumer confidence continues to rise and is at the highest level for nine years. The proportion of consumers feeling
positive about their job prospects and willing to spend money are both at their highest levels for over seven years.
Retail spending, as shown by the British Retail Consortium like-for-like non-food retail sales, continues to show an average
growth rate of above 2 per cent against 2014.
Retailer administrations remain at relatively low levels with USC and Bank, amounting to just over 1 per cent of Intu's rent
roll, being the only two material failures in the period.
Changing face of UK retail
Retailers, as ever, focus on their most productive growth strategies. As their multi-channel approach becomes more mature
with a greater understanding of the requirements and position of the physical store in this strategy, retailers are particularly
targeting larger stores in the best locations.
With minimal new space in the pipeline, this involves targeting the best retail and leisure locations which deliver high footfall,
extended dwell time, digital integration and an attractive mix of retail, entertainment and experience.
Existing UK retailers are managing the shape and structure of their existing store portfolios through their lease expiry cycle.
Next commented in their 2014/2015 annual results that over the last seven years they have increased their net trading
space by 42 per cent whilst only increasing their number of stores by 7 per cent. Over this period they have increased the
average size of their stores at intu centres by 33 per cent as they have repositioned to larger format flagship stores in the
best retail locations.
International entrants to the UK are able to optimise their store portfolio from inception to get maximum coverage. For
example, once Apple entered the UK market, they rapidly expanded across the country and their portfolio stands at 38
stand-alone stores. Around three quarters of these stores are in the top 35 shopping centres and Intu are their largest
landlord with one-third of their stores in our centres.
Online retailers are also seeing the benefit and need for a physical presence. One such retailer is Simply Be, originally an
online only operator which has built up a portfolio of 16 stores since 2011. They have opened half of their stores in the top
35 shopping centres, a quarter in intu centres.
In the recent UK Budget, the government announced it would consult on devolving powers on extending Sunday trading
within set parameters to city mayors and local authorities. We agree that the case for deregulation is overwhelming. It would
generate positive economic activity and create thousands of jobs, but first and foremost it's what our customers tell us they
want - not necessarily to shop longer but to have the flexibility to shop when they want and where they want.
OPERATING REVIEW
Optimising asset performance
Valuation
The aggregate valuation gains on our investment property including the Group's share of joint ventures was GBP162.2 million,
1.9 per cent like-for-like in the period, significantly ahead of the IPD monthly index, retail, which reported a 1.2 per cent
increase.
The weighted average nominal equivalent yield at 30 June 2015 was 5.25 per cent, a reduction of seven basis points in the
period, reflecting our ongoing asset management initiatives and strong investment market conditions. Based on the gross
portfolio value, the net initial yield "topped-up" for the expiry of rent free periods was 4.55 per cent.
On a like-for-like basis, ERV increased by 0.6 per cent in the period, outperforming the IPD index which indicated a 0.1 per
cent increase.
First half Second half First half
2015 2014 2014
Group(1) revaluation surplus (like-for-like) +1.9% +1.0% +7.6%
IPD(2) capital growth +1.2% +3.7% +3.5%
Group(1) weighted average nominal equivalent yield 5.25% 5.32% 5.35%
Like-for-like change in Group nominal equivalent yield -7bp -3bp -44bp
IPD(2) equivalent yield shift -13bp -26bp -30bp
Group(1) "topped-up" initial yield (EPRA) 4.55% 4.60% 4.66%
Group(1) change in like-for-like ERV +0.6% +0.1% +0.2%
IPD(2) change in rental value index +0.1% +0.4% -0.1%
(1) Including Group share of joint ventures
(2) IPD monthly index, retail
The majority of our shopping centres have increased in value in the period, with the remainder holding their value. There
were three main drivers for these increases:
- our major in-town and city centre locations have seen, on average, a ten basis point yield compression as investor
demand for these centres increases
- rental values are increasing across most of our centres as new lettings demonstrate improvements in the occupier
market
- at centres where we have carried out improvements and reconfigurations we have seen above average increases in
rental values as evidence of lettings at new levels comes through. In particular this can be seen at intu Eldon Square
and intu Victoria Centre where our investment programme has delivered considerable benefits
The table below shows the main components of the GBP162.2 million overall surplus:
Market value Like-for-
30 June 31 December like
2015 2014 Surplus surplus
GBPm GBPm GBPm %
St David's, Cardiff 355.0 308.0 47.8 16.1
intu Lakeside 1,294.0 1,255.0 35.2 2.8
intu Victoria Centre 336.0 314.0 13.9 4.4
intu Derby 435.0 420.0 13.5 3.5
intu Eldon Square 285.6 272.6 12.0 4.5
intu Merry Hill 445.6 434.8 10.8 2.5
intu Trafford Centre 2,210.0 2,200.0 8.9 0.4
intu Chapelfield 270.0 261.0 8.8 3.4
Other including non like-for-like 3,879.3 3,498.0 11.3
Investment and development property
including Group share of joint ventures 9,510.5 8,963.4 162.2 1.9
- St David's, Cardiff has benefitted from increased rental values as the centre becomes ever more established in its
market and progresses on its first series of rent reviews. This has also been reflected in a 56 basis point nominal
equivalent yield reduction to reflect a centre which has now achieved super prime status
- intu Lakeside has benefitted from yield tightening reflecting the strengthening of tenant mix and upgraded dining offer
- intu Victoria Centre is now starting to see the benefit of the mall refreshment work delivering higher rents from new
lettings and some yield compression reflecting the transformed quality of the centre
- intu Derby has benefitted from higher rental values as demand for space increases and yield compression reflects these
improvements. In our first year of ownership the value of this centre has increased by 11 per cent
- intu Eldon Square is seeing the benefit of the substantial programme of investment we have undertaken providing an
enhanced environment with key new lettings improving rental tone. Yield compression follows from the enhancement
and heightened demand at the centre
- intu Merry Hill has benefitted from yield tightening as the tenant mix evolves and prime zone A rents improve from GBP150
ITZA to GBP180 ITZA. In our first year of ownership the value of this centre has increased by 9 per cent
- intu Trafford Centre has benefitted from a small uplift in rental values
- intu Chapelfield, a regionally prime centre, has benefitted from yield improvement and continued to show high occupancy
UK operating metrics
First half Full year First half
2015 2014 2014
Occupancy 95% 95% 96%
- of which, occupied by tenants trading in administration 1% 1% 1%
Like-for-like net rental income -1.0% -3.2% -3.6%
Leasing activity
- number, new rent 96, GBP17m 210, GBP34m 98, GBP15m
- new rent relative to previous passing 12% above 5% above 4% above
Footfall +1%* +0% +1%
Retailer sales (like-for-like centres) +3.4% +2.5% +1.5%
Rent to estimated sales (exc. anchors and major space users) 12.3% 12.5% 13.1%
* excluding centres with significant development projects; including all centres +0%
Occupancy is 95 per cent and in line with December 2014. The 5 per cent vacancy rate compares favourably to PMA's unit
vacancy measure for 'big shopping centres' of 11 per cent.
Like-for-like net rental income was 1.0 per cent lower than the same period in 2014 due to units held for development at intu
Metrocentre, intu Victoria Centre and intu Eldon Square where major restaurant developments are under way. This was in
line with our expectation.
Please refer to the graph contained in the pdf version
We agreed 96 new long-term leases in the period, amounting to GBP17 million new annual rent, at an average of 12 per cent
above previous passing rent (like-for-like units) and in line with valuers' assumptions. Significant activity in the period
includes:
- 39 restaurant lettings across the portfolio, including Five Guys at intu Braehead, Yo Sushi and Byron at both intu Derby
and intu Bromley, Joe's Kitchen at intu Derby and intu Victoria Centre, and Coast to Coast at intu Trafford Centre and
intu Potteries
- Retail lettings include Kurt Geiger at intu Lakeside where the tenant mix continues to strengthen, Kiko, Swatch and Tiger
at intu Victoria Centre and Thomas Sabo, Skechers, Kiko and Smiggle at intu Eldon Square where retailers continue to
respond to the refreshed mall environments at both centres
- 75 new shops opened or refitted in our UK centres in the first half of 2015, around 3 per cent of our 2,800 units. Tenants
have invested around GBP30 million in these stores, a significant demonstration of their commitment to our centres
We settled 78 rent reviews in the period for new rents totalling GBP19 million, an average uplift of 7 per cent on the previous
rents.
Footfall has increased by 1 per cent in the period, excluding centres where our development projects are having an impact.
For all centres, the number of visitors is unchanged to the same period in 2014 with our customer focused events
programmes and world class customer service delivering an outperformance of Experian's measure of UK national retail
footfall which declined 1 per cent.
Estimated retailer sales in our centres were up 3.4 per cent in the first half of 2015 against the same period in 2014,
continuing the trend we saw in 2014 and ahead of the British Retail Consortium trends. The ratio of rents to estimated sales
for standard units reduced marginally in the period to 12.3 per cent.
The difference between annual property income (see Glossary) of GBP458 million and ERV of GBP535 million represents GBP42
million from vacant units and reversion of GBP35 million, 8 per cent, from rent reviews and lease expiry. Of the GBP35 million, GBP5
million relates to reversions only realisable on expiry of leases with over 10 years remaining (for example anchor units),
leaving GBP30 million, 7 per cent, from other lease expiries and rent reviews.
The weighted average unexpired lease term is 7.7 years (31 December 2014 – 7.4 years).
Seizing the growth opportunity in Spain
Our strategy is to create a business of scale through acquisition and development. We will concentrate on the top 10 key
catchments, aiming to establish a market leading position in the country through ownership and management of prime
shopping resorts, such as Puerto Venecia.
We have consolidated this position in the first six months of 2015. We now own two of the top 10 shopping centres in Spain,
a development site near Málaga and development options on sites in Valencia, Palma and Vigo. In addition, we have
introduced the intu brand to Spain at intu Asturias, formerly Parque Principado, which has already refreshed the mall
environment and will deliver the significant benefits of the brand as seen at our centres in the UK.
Acquisitions
In January 2015 we completed the EUR451 million acquisition of the 200,000 sq. m. Puerto Venecia shopping resort in
Zaragoza. The initial EUR225 million bridging loan has been successfully syndicated and converted to a five year term loan
secured on the asset.
We commented at the time of acquisition that we would look to introduce a joint venture partner and in June 2015 we
announced the planned formation of a joint venture at Puerto Venecia with CPPIB, our partner at intu Asturias. The joint
venture agreement is based on the EUR451 million acquisition price and subject to certain completion conditions including
regulatory approvals.
We exercised in the period the option we acquired in 2012 for the prime development site for a shopping resort near
Málaga, now referred to as intu Costa del Sol. This 30 hectare site is ideally positioned on the main Costa del Sol highway
with access to a catchment of three million residents and ten million annual tourists. The total cost to date of the land and
pre-development expenditure is EUR55 million.
The proposed development is progressing well with strong interest from retailers and leisure operators, including a signed
framework agreement with Hamleys for a children's world mini theme park and toy centre. We await the final planning
approval, which is expected in 2016 to enable the development to start on site.
Development pipeline
Cost to Cost to
Indicative completion completion
Description timing EURm(1) GBPm(1)
intu Costa del Sol(2) Shopping resort 2016-2018 163 116
intu Valencia Shopping resort 2018-2020 350 248
intu Vigo/intu Palma Shopping resort 2020-2022 140 99
653 463
(1) Represents Intu's share of costs at 50% of total (assumes partner).
(2) Intu project costs of EUR218 million of which EUR55 million has already been spent
Operational performance
The Spanish economy continues to recover with customer confidence at the highest level since 2000, increasing retailer
sales and GDP growth. Our two centres, intu Asturias and Puerto Venecia, are benefitting from these improvements with
footfall and retailer sales up by 4 per cent and 10 per cent respectively.
Occupancy at intu Asturias is 100 per cent and Puerto Venecia is 94 per cent.
We agreed 11 new long-term lettings in the period, amounting to EUR1 million new annual rent, at an average of 8 per cent
above previous passing rent (like-for-like units) and in line with valuers' assumptions. New names to our centres included
Pandora, Levi's, Napapijri and Ilusiona.
Puerto Venecia was valued at EUR451 million at 30 June 2015, in line with the acquisition price and intu Asturias increased by
EUR12 million, 6 per cent, to EUR224 million (Intu share 50 per cent).
Making the brand count
At intu we create compelling experiences that surprise and delight our customers. We aim to attract people for longer, more
often, which helps our retailers flourish. This powers our business, creating value for our retailers, our communities and our
investors and drives our long term success.
With this in mind we aim to continuously improve these compelling experiences. Our efforts have been recognised by the
shopping centre industry, winning significant awards including the following:
- BSCS Opal Awards 2015 for commercialisation – three awards including the highest honour, an Aurora Award, for our
partnership with Ratchet Clothing to provide a multichannel environment suited to the young retailer's brand ethos
including a pop-up at intu Lakeside and online boutique on intu.co.uk
- BSCS Purple Apple Marketing Awards 2015 – eight awards including the Golden Apple Award for intu Metrocentre's
launch of 'The Heart of a Thousand Crystals' chandelier
- Sceptre Awards 2015, recognising best practice and best people – six awards including the highest honour, the Grand
Prix awarded for best overall owner/managing agent
Digital connectivity
Wi-Fi registrations at our centres are now over two million. We continue to see approximately 60 per cent of these
subscribe for marketing, which along with signups through other channels has increased our active marketing database to
over 2.2 million individuals.
The power of this database is now allowing us to target our marketing, with well above the industry standards for email
performance, including open rates and click through rates. We now have over 250 affiliate retailers trading on our
transactional website, giving customers access to the majority of our retailers online and in centre.
These factors are in turn producing increased sales through intu.co.uk and demand from retailers for email marketing
campaigns by intu on their behalf.
Website traffic continues to grow with 19 million website visits in the last 12 months, an increase of over 40 per cent over the
prior year period.
Events with a difference
Our nationwide events programme aims to attract people for longer and more often.
All centres participated in our third annual 'Everyone's Invited' weekend. The event focuses heavily on our family audience
and delivered a programme of party themed activities. Customer feedback through our tell intu programme showed net
promoter scores increasing by around 25 per cent for the weekend.
Following on from the hugely successful Elephant Parade in 2014, we have teamed up with the RSPB for our 2015/2016
UK-wide touring event, The Big Birdhouse Tour. The tour will visit 15 intu shopping centres exhibiting larger than life
birdhouses individually designed by well-known personalities raising awareness of and money for the RSPB.
With over half of the UK's population visiting an intu centre at some point through the year on or offline we are now able to
work on a national basis with global brands providing high quality promotional events, both physically and digitally, to our
customers. In February 2015 we worked with 20th Century Fox to launch their film Home. Following on from the success of
this we will be promoting the new Snoopy film for 20th Century Fox in the autumn and we have a summer tie up with a
leading children's comic across all our centres providing family orientated activities throughout the school summer holidays.
World Class Service
Our net promoter scores continue to improve as we constantly aim to improve the customer experience in our centres. Net
promoter scores for the four months to June 2015, where we have like-for-like research, are running at higher levels than
the same period in 2014. We are taking our world class customer service training to the next stage with all intu staff
undergoing additional training in 2015.
Commitment to the community
Our corporate responsibility approach is based on three pillars of communities and economic contribution, environmental
efficiency and relationships with our stakeholders.
Our shopping centres are embedded in the communities they serve and we provide support for charities and community
organisations that address issues important to the long term success of our centres in their communities. We work with
charities and community organisations on a local and national level, including The Outward Bound Trust, Retail Gold and
Green Gyms. Environmentally we strive to continue to reduce carbon emissions and divert waste from landfills.
We remain the only shopping centre operator, and one of only 36 companies nationally, to achieve the Business in the
Community CommunityMark award which recognises our integrated and strategic approach to community investment and
that we are making a measurable difference to communities through our commitments.
UK development momentum
We have made significant progress in the period with our pipeline of development opportunities:
- on track in the second half of 2015 for the completion of projects at intu Victoria Centre (mall refurbishment and creation
of 11 new restaurants) and intu Potteries (cinema and catering extension)
- on site at intu Eldon Square, intu Metrocentre and intu Bromley with major restaurant projects, all due to open in early
2016
- received planning approval for the redevelopment of intu Broadmarsh
- identified additional active management projects at intu Merry Hill and Manchester Arndale and we will work with our
partners to take these opportunities forward
UK New Cost to
planning space Indicative completion
Description approved (sq. ft.000)(1) timing(2) GBPm(3)
Committed
intu Victoria Centre Refurbishment and restaurants(4) Y – 2015 7
intu Potteries Leisure extension(5) Y 60 2015 6
intu Watford Charter Place pre-development Y – 2015 3
intu Metrocentre Restaurant development(6) Y 15 2015-2016 7
intu Bromley Queens Gardens(7) Y 14 2015-2016 4
intu Eldon Square Restaurant development(8) Y – 2015-2016 12
intu Lakeside Hotel Y 40 2015-2016 7
Other committed projects Various initiatives(9) Y 2015-2017 19
65
Active management pipeline
intu Bromley Boutique cinema and restaurants Y 20 2016-2017 9
intu Trafford Centre Barton Square courtyard Y 112 2016-2018 45
intu Merry Hill Various initiatives – 2016-2020 65
Manchester Arndale Various initiatives – 2016-2020 65
Other projects Various initiatives(9) 2015-2019 135
Other projects Various initiatives(9) 2020-2024 125
444
Major extensions
intu Watford Charter Place extension Y 380 2015-2017 145
intu Broadmarsh Redevelopment Y 50 2016-2018 70
intu Lakeside Leisure extension Y 225 2016-2019 95
intu Lakeside Retail extension Y 440 2017-2019 180
Cribbs Causeway Retail and leisure extension 380 2019-2021 105
intu Braehead Retail and leisure extension 475 2020-2022 200
intu Victoria Centre Retail and leisure extension Y 500 2020-2022 225
1,020
Total UK 1,529
(1) Represents net additional floor space of retail, catering and leisure
(2) Timing subject to change due to a number of internal and external factors
(3) Represents Intu's share of costs
(4) Total project costs of GBP43 million of which GBP36 million has already been spent
(5) Total project costs of GBP19 million of which GBP13 million has already been spent
(6) Total project costs of GBP10 million of which GBP3 million has already been spent
(7) Total project costs of GBP5 million of which GBP1 million has already been spent
(8) Total project costs of GBP14 million of which GBP2 million has already been spent
(9) Smaller committed and pipeline projects do not necessarily involve the creation of additional floor space
Principal projects include:
- intu Victoria Centre: Clock tower restaurants, mall refurbishment and external enhancements are due to be completed
in the final quarter of 2015. Adding to the new retailers in 2014 we have also introduced Kiko, Swatch and Tiger to the
centre in 2015. Demand for the 11 restaurants remains high with five now pre-let and four under offer. The GBP43 million
development will deliver GBP2.4 million of rent from the redeveloped areas along with increasing the tone across the whole
centre as evidenced by headline ITZA rents increasing from GBP230 to GBP250
- intu Potteries: The Hive, a 60,000 sq ft leisure extension on the site of a previous car park is on target to open in late
2015. It consists of a nine screen Cineworld cinema, and a pedestrian boulevard with seven restaurants all pre-let. The
GBP19 million development is expected to deliver a 7 per cent stabilised initial yield on cost
- intu Metrocentre: The extension to the highly successful Qube dining area adjacent to the IMAX Odeon cinema
commenced in February 2015. This GBP17 million development will reconfigure a previous themed side mall and build out
over a service yard adding 15,000 sq ft of additional space. The 11 new restaurants are all under offer with all but the
final two exchanged. The enhanced dining area is due to open in January 2016 and deliver an 8 per cent return on cost
- intu Eldon Square: Grey's Quarter is a GBP24 million redevelopment converting 80,000 sq. ft. of out dated retail space into
the new dining destination for Newcastle. The quarter will include over 20 new restaurants facing Grey's Monument in
the heart of the city centre. Works commenced in May 2015 and are due to be completed in late 2016. Over 50 per cent
is now pre-let with a further 35 per cent under offer. The project is expected to deliver a return of over 7 per cent
- intu Lakeside: GBP7 million hotel development, pre-let to Travelodge, is due to start construction in late 2015 for an
opening in late 2016 delivering an expected 7 per cent stabilised initial yield on cost
- intu Watford: GBP148 million extension and mall refurbishment is due to commence in Q4 2015. Project costs have
increased as we have re-defined the scope to include existing mall refurbishments and improved ancillary services,
such as upgraded car parks. In addition, cost inflation from the construction demand in the London area has increased
the expected build costs. With quality restaurant and retailer demand, this project is expected to deliver a stabilised
initial yield on cost of at least 7 per cent
- intu Broadmarsh: We received planning approval for this project in June 2015 and we are now in detailed discussions
with potential retail and leisure tenants for this development. Our current expectation is to start this project in 2016
We can finance our UK and Spanish pipeline through three main routes:
- available facilities within the business. At the end of June 2015 we had cash and available facilities of GBP0.5 billion
- the major developments are likely to be spread over a number of years. We intend to raise development finance where
appropriate and additional finance from the value created by completed developments to reinvest in the next project
- recycling capital from other assets to reinvest into these growth opportunities at the point where they will deliver
superior returns. This may include introducing partners as we did at intu Uxbridge in 2014
In the case of major extensions and creation of significant new or reconfigured space, we aim to have agreed terms with a
sufficient level of tenants including strategic pre-lets before proceeding with construction.
For 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 6 to 10 per cent and a minimum of 7 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 anticipated overall impact of the expenditure on centre performance through enhancing the
ambience, the tenant mix and the rental tone.
TOP PROPERTIES
Annual Headline
Market Size % Number Property rent ABC1
value (sq. ft. 000) ownership of stores Income ITZA customers Key stores
Super-regional centres
1 intu Trafford GBP2,210m 1,973 100% 234 GBP89.9m GBP415 65% Selfridges, John Lewis, Next,
Centre Superdry, Apple, Ted Baker,
Nespresso, Russell & Bromley,
Victoria's Secret, Odeon, Legoland,
SeaLife, H&M, Hamleys, Marks &
Spencer
2 intu GBP1,294m 1,435 100% 249 GBP59.1m GBP350 67% House of Fraser, Debenhams,
Lakeside Marks & Spencer, Hugo Boss,
Hamleys, Topshop, Zara, Primark,
Forever 21, Vue Cinema
3 intu GBP930m 2,085 90% 344 GBP47.7m GBP300 58% House of Fraser, Marks & Spencer,
Metrocentre Debenhams, Apple, H&M, Topshop,
Zara, Primark, River Island, Odeon
Cinema
4 intu GBP600m 1,136 100% 122 GBP26.0m GBP250* 60% Marks & Spencer, Primark, Apple,
Braehead Next, H&M, Topshop, Hollister,
Superdry, Sainsbury's
5 intu Merry GBP446m 1,671 50% 214 GBP22.6m GBP180 47% Marks & Spencer, Debenhams,
Hill BHS, Primark, Sainsbury's, Next,
Asda, Boots, H&M
6 Cribbs GBP245m 1,075 33% 153 GBP11.6m GBP305 76% John Lewis, Marks & Spencer,
Causeway Apple, Next, Topshop, Timberland,
Jigsaw, Hobbs, Hugo Boss, H&M
In-town centres
7 Manchester GBP438m 1,600 48% 249 GBP26.0m GBP265 57% Harvey Nichols, Apple, Burberry, LK
Arndale Bennett, Topshop, Next, UGG,
Hugo Boss, Superdry, Zara,
Hollister
8 intu Derby GBP435m 1,300 100% 181 GBP30.6m GBP125 52% Marks & Spencer, Debenhams,
Sainsbury's, Next, Boots, Topshop,
Cinema de Lux
9 St David's, GBP355m 1,391 50% 204 GBP17.6m GBP185 66% John Lewis, Debenhams, Marks &
Cardiff Spencer, Apple, Hollister, Hugo
Boss, H&M, River Island, Hamleys,
Armani Exchange, Vivienne
Westwood
10 intu Eldon GBP286m 1,350 60% 137 GBP14.4m GBP300 57% John Lewis, Fenwick, Debenhams,
Square Waitrose, Apple, Hollister, Topshop,
Boots, River Island, Next
11 intu GBP336m 726 93% 137 GBP17.4m GBP250 86% John Lewis, Marks & Spencer,
Watford Apple, Zara, Primark, Next,
Lakeland, Phase Eight, Lego, H&M,
Topshop/Topman, New Look
12 intu GBP336m 981 100% 104 GBP17.2m GBP250 53% House of Fraser, John Lewis, Next,
Victoria Topshop, River Island, Boots,
Urban Outfitters, Superdry, Office,
Centre Kiko, Swatch
Annual
Market Size % Number Property
value (sq. m. 000) ownership of stores Income Key stores
Spanish centres
13 Puerto EUR451m 119 100% 203 EUR22.4m El Corte Ingles, Primark, IKEA,
Venecia, Apple, Decathlon, Zara, Hollister,
Toys R Us, H&M, MediaMarkt,
Zaragoza Nike, Conforama
14 intu EUR112m 75 50% 137 EUR6.5m Primark, Zara, H&M, MediaMarkt,
Asturias Cinesa, Eroski, Mango, Tommy
Hilfiger, Pull&Bear, Springfield, New
Yorker, Lefties, Desigual, FNAC
*The amount presented is on the Scottish ITZA basis, the English equivalent is GBP335.
FINANCIAL REVIEW
Presentation of information
The Group accounts for its interests in joint ventures using the equity method as required by IFRS 11 Joint Arrangements.
This means that the income statement and the balance sheet include single lines for the Group's total share of post-tax
profit and the net investment in joint ventures respectively.
Management review and monitor the business, including the Group's share of joint ventures, on an individual line basis not a
post-tax profit or net investment basis and therefore the figures and commentary in this report are presented on that basis,
consistent with this management approach. The Other information section includes reconciliations between the two bases.
OVERVIEW
Recent acquisitions and continued positive movements in asset values have resulted in increases to both underlying
earnings and NAV per share:
- underlying earnings of GBP88.7 million, up 23 per cent on 2014 reflecting the acquisition of Puerto Venecia, Zaragoza in
January and a full impact from the acquisitions and disposals in the first half of 2014. Earnings per share of 6.8 pence,
up 6 per cent on 2014
- NAV per share of 385 pence; total financial return for the period of 4 per cent
Financing metrics remain strong due to property valuation increases and recent refinancing activity:
- debt to assets ratio at 45.0 per cent (31 December 2014 – 44.2 per cent), below the Group's target maximum level of 50
per cent
- interest cover ratio of 1.85x (31 December 2014 – 1.82x), above the Group's target minimum level of 1.60x
- cash and available facilities of GBP499.5 million (31 December 2014 – GBP670.8 million) remains high but has reduced due to
acquisitions and capital expenditure in the period
Major transactions:
- in January the Group completed the acquisition of Puerto Venecia, Zaragoza for EUR450.8 million. Total consideration net
of debt and other net assets acquired was EUR273.5 million. The acquired debt was refinanced on acquisition with EUR225
million of debt raised. In June the Group announced that CPPIB will acquire 50 per cent of this interest with the
transaction expected to complete in September
- in June the Group renegotiated the GBP351.8 million term loan within the Secured Group Structure (SGS), extending this by
two years to March 2020 and reducing the interest rate margin by 1.5 per cent
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2015
Income statement
Six months ended Six months ended
30 June 2015 30 June 2014
Profit for the period GBP262.3m GBP602.3m
Underlying earnings GBP88.7m GBP72.0m
Underlying earnings per share 6.8p 6.4p
Net rental income(1) GBP207.6m GBP189.2m
(1) Including Group share of joint ventures.
The Group recorded a profit for the period of GBP262.3 million, a reduction on the GBP602.3 million reported for the six months
ended 30 June 2014. This was primarily due to a lower gain on property valuations of GBP162.2 million including the Group's
share of joint ventures (2014 – GBP573.3 million), partially offset by:
- a positive movement in the change in fair value of the Group's financial instruments. 2015 includes a credit of GBP32.2
million including the Group's share of joint ventures (2014 – charge of GBP15.6 million)
- lower exceptional administration costs of GBP0.6 million (2014 - GBP11.9 million). 2014 included costs in relation to the
acquisition of intu Merry Hill, intu Derby and Sprucefield
Underlying earnings increased by GBP16.7 million to GBP88.7 million with underlying earnings per share increasing by 6 per cent
to 6.8 pence. Underlying earnings exclude valuation movements, exceptional items and related tax and are presented as
they are considered to be a key measure of the Group's performance and an indication of the extent to which dividend
payments are supported by underlying earnings. The underlying profit statement is presented in full in the Other information
section.
Please refer to the graph contained in the pdf version
The principal components of the change in underlying earnings are as follows:
- net rental income increase of GBP20.1 million due to the acquisition of Puerto Venecia, Zaragoza in 2015 and a full impact
from 2014 acquisitions and disposals
- like-for-like net rental income reduced by GBP1.7 million, 1.0 per cent (see Operating Review)
- underlying net finance costs increased by GBP7.2 million reflecting the full impact of funding 2014 acquisitions and the
acquisition of Puerto Venecia, Zaragoza in 2015 which are partially offset by the favourable impact of lower interest rates
following debt refinancings
- ongoing administration expenses increased by GBP1.4 million, largely due to the management of recent acquisitions
- other includes a saving of GBP2.9m following the conversion of convertible bonds in July 2014 and an increase due to
minority interests including the change in ownership structure of intu Asturias in the first half of 2014
Six months ended Six months ended
30 June 2015 30 June 2014
GBPm GBPm
Gross rental income 253.2 232.1
Head rent payable (11.5) (11.5)
241.7 220.6
Net service charge expense and void rates (11.2) (10.6)
Bad debt and lease incentive write-offs (4.8) (3.3)
Property operating expense (18.1) (17.5)
Net rental income 207.6 189.2
Net rental income margin 86% 86%
EPRA cost ratio (including direct vacancy costs) 20.2% 20.5%
As detailed in the table above, the Group's net rental income margin including share of joint ventures is in line with 2014 at
86 per cent. Property operating expense largely comprises car park operating costs and the Group's contribution to
shopping centre marketing programmes. The Group's ratio of total costs to income, as calculated in accordance with EPRA
guidelines, remains low at 20.2 per cent.
Balance sheet
The Group's net assets attributable to shareholders have increased by GBP197.9 million to GBP4,721.9 million at 30 June 2015
reflecting the retained profit for the period.
30 June 31 December
2015 2014
Group Group
Group balance Share of including including
sheet as joint share of joint share of joint
presented ventures ventures ventures
GBPm GBPm GBPm GBPm
Investment and development property 8,509.5 925.4 9,434.9 8,888.8
Investments 1,113.8 (906.4) 207.4 227.7
Net external debt (4,266.8) (9.0) (4,275.8) (3,963.4)
Derivative financial instruments (317.8) (0.2) (318.0) (347.2)
Other assets and liabilities (245.9) (9.8) (255.7) (209.1)
Net assets 4,792.8 – 4,792.8 4,596.8
Non-controlling interest (70.9) – (70.9) (72.8)
Attributable to shareholders 4,721.9 – 4,721.9 4,524.0
Fair value of derivatives (net of tax) 307.9 – 307.9 333.6
Other adjustments 91.0 – 91.0 89.1
Effect of dilution 16.4 – 16.4 22.2
Net assets (diluted, adjusted) 5,137.2 – 5,137.2 4,968.9
As detailed in the table, net assets (diluted, adjusted) have increased by GBP168.3 million from 31 December 2014 to GBP5,137.2
million as at 30 June 2015.
Investment and development property has increased by GBP546.1 million primarily due to the acquisition of Puerto Venecia,
Zaragoza, valued at GBP344.2 million on acquisition, and the GBP162.2 million valuation gain in the period.
Investments of GBP207.4 million principally comprise the Group's interests in the US and India. The US investment of 11.4
million shares in a joint venture with Equity One, a listed US REIT, is valued at GBP168.5 million based on the 30 June 2015
Equity One share price. The India investment largely comprises a 32 per cent interest in Prozone, a shopping centre
developer listed on the Indian stock market, included at GBP38.3 million on the Group's balance sheet at 30 June 2015. See
notes 16 and 17 for further details.
Net external debt is discussed in the cash flow and net external debt section.
Derivative financial instruments comprise the fair value of the Group's interest rate swaps. The net liability at 30 June 2015 is
GBP318.0 million, a reduction of GBP29.2 million in the period. Cash payments in the period totalled GBP21.3 million, GBP11.7 million of
which has been classified as an exceptional finance cost as it relates to payments in respect of unallocated swaps. The
balance of the payments has been included as underlying finance costs as it relates to ongoing interest rate swaps used to
hedge debt.
As previously detailed, the Group has a number of interest rate swaps, entered into some years ago, which are unallocated as,
due to a change in lenders' practice we are now required to take out new swaps. At 30 June 2015 these swaps have a market
value liability of GBP228.6 million (31 December 2014 – GBP242.5 million). It is estimated the Group will be required to make cash
payments on these swaps of GBP14 million in the second half of 2015.
The non-controlling interest at 30 June 2015 relates to our partner's 40 per cent stake in intu Metrocentre.
The Group is exposed to foreign exchange movements on its overseas investments in Spain, the US and India. The Group's
policy is to ensure that the net exposure to foreign currency is less than 10 per cent of the Group's net assets attributable to
shareholders. At 30 June 2015 the exposure was 9.1 per cent, higher than at 31 December 2014 due to the Group's
acquisition of Puerto Venecia, Zaragoza in January and the exercise of the Málaga option. This exposure would reduce to
less than 8 per cent were the sale of a 50 per cent interest in Puerto Venecia, Zaragoza to CPPIB to complete as expected.
Adjusted net assets per share
As illustrated in the chart below, diluted, adjusted net assets per share have increased from 379 pence per share at 31
December 2014 to 385 pence per share at 30 June 2015. The increase was driven by the property valuation gain of 12
pence per share.
Please refer to the graph contained in the pdf version
Cash flow and net external debt
Six months ended Six months ended
30 June 2015 30 June 2014
GBPm GBPm
Group cash flow as reported
Cash flow from operating activities 94.0 25.6
Cash flow from investing activities (243.3) (615.3)
Cash flow from financing activities 171.0 609.9
Foreign currency movements (0.6) (0.1)
Net increase in Group cash and cash equivalents 21.1 20.1
30 June 2015 31 December 2014
GBPm GBPm
Net external debt (including Group share of joint ventures)
Cash (including Group share of joint ventures) 259.6 260.1
Debt (including Group share of joint ventures) (4,535.4) (4,223.5)
Net external debt (including Group share of joint ventures) (4,275.8) (3,963.4)
During the six months ended 30 June 2015 the Group recorded an increase in cash of GBP21.1 million.
Cash flow from operating activities of GBP94.0 million is GBP68.4 million above 2014, reflecting the higher underlying profit, a
lower level of interest cash flows and positive working capital movements.
Cash flow from investing activities reflects the cash outflow for the acquisition of Puerto Venecia, Zaragoza of GBP203.1 million
and capital expenditure during the period of GBP60.2 million which includes the exercise of the option over land in Málaga.
Cash flow from financing activities includes net debt drawdowns of GBP194.8 million primarily to fund the acquisition of Puerto
Venecia, Zaragoza. Dividends paid in cash during the period were GBP63.4 million.
Net external debt (including Group share of joint ventures) has increased by GBP312.4 million. Cash including the Group's
share of joint ventures has reduced by GBP0.5 million. Gross debt has increased by GBP311.9 million reflecting the key cash flows
above.
FINANCING
Debt structure
As a result of the significant refinancing activity in recent years, the Group has significantly diversified its sources of funding.
We now have a range of debt instruments including CMBS and other secured bonds plus syndicated bank debt secured on
individual or pools of assets, with limited or non-recourse from the borrowing entities to other Group companies outside of
these arrangements. Corporate-level debt remains limited to the revolving credit facility and the GBP300 million convertible bond.
During 2015 the main financing activities undertaken include:
- in January, EUR225 million of new debt was secured against Puerto Venecia, Zaragoza refinancing the acquired debt
- in June the Group renegotiated its GBP351.8 million Secured Group Structure term loan, extending the maturity by two
- years to March 2020 and reducing the margin being paid by 150 basis points
Please refer to the graph contained in the pdf version
* 2017 includes GBP191 million relating to intu Merry Hill which has an initial maturity of September 2016 extendable at the borrower's option to
September 2017. It is anticipated that this option will be exercised at the earliest opportunity.
The above chart illustrates that there is no major refinancing requirement due until 2017. The majority of debt payments due
in 2016 relate to the GBP113.1 million loan secured on intu Bromley and discussions are currently underway to refinance this.
The table below summarises the Group's main debt measures, all including the Group's share of joint ventures.
30 June 2015 31 December 2014
Debt to assets ratio 45.0% 44.2%
Interest cover ratio 1.85x 1.82x
Weighted average debt maturity 8.1 years 8.4 years
Weighted average cost of gross debt 4.5% 4.7%
Proportion of gross debt with interest rate protection 85% 88%
Cash and available facilities GBP499.5m GBP670.8m
The debt to assets ratio has increased slightly since 31 December 2014 with the increase in property valuations offset by the
increases in net external debt resulting from the acquisition of Puerto Venecia, Zaragoza and capital expenditure in the period.
The debt to assets ratio remains below the Group's target maximum level of 50 per cent. Proforma for the completion of the
expected sale of 50 per cent of our interest in Puerto Venecia, Zaragoza to CPPIB the debt to asset ratio would reduce by
around 1 per cent.
Interest cover ratio of 1.85x has increased slightly during the period reflecting the impact of recent acquisitions and lower
interest rates following recent debt refinancing and remains above the Group's targeted minimum level of 1.60x.
The weighted average debt maturity has reduced to 8.1 years and includes the benefit from the extension of the SGS term loan.
The weighted average cost of gross debt has reduced to 4.5 per cent (excluding the revolving credit facility) reflecting the
lower rates achieved on refinancing activity in the period.
The Group uses interest rate swaps to fix interest obligations, reducing cash flow volatility caused by changes in interest rates.
The proportion of debt with interest rate protection has reduced slightly in the period to 85 per cent within the Group's policy
range of between 75 per cent and 100 per cent. The reduction is due to the higher level of borrowing against the Group's
revolving credit facility.
Cash and available facilities have reduced to GBP499.5 million at 30 June 2015. This comprises cash of GBP259.6 million in addition
to undrawn facilities of GBP239.9 million. The reduction from 31 December 2014 primarily reflects the acquisition of Puerto
Venecia, Zaragoza and capital expenditure in the period.
Covenants
Full details of the debt financial covenants are included in the Financial covenants section of this report. The Group is in
compliance with all of its covenants.
Capital commitments
The Group has an aggregate cash commitment to capital projects of GBP65.2 million at 30 June 2015.
In addition to the committed expenditure, the Group has an identified uncommitted pipeline of active management projects,
major extensions and developments that may become committed over the next five years (see Operating Review).
OTHER INFORMATION
Tax
As a Real Estate Investment Trust (REIT), tax on property operating profits is paid at shareholder level to the UK
government rather than by Intu itself. REIT status brings with it the requirement to operate within the rules of the REIT
regime (for further information see Glossary).
The Group pays tax directly on overseas earnings, any UK non-property income under the REIT rules, business rates, and
transaction taxes such as stamp duty land tax. In the six months ended 30 June 2015 the total of such payments to tax
authorities was GBP12.5 million, of which GBP9.3 million was in the UK, GBP0.3 million in the US and GBP2.9 million in Spain.
Dividends
The Directors are recommending an interim dividend of 4.6 pence per share in line with the 2014 interim dividend. A scrip
dividend alternative will continue to be offered. Details of the apportionment between the PID and non-PID elements per
share will be confirmed in due course.
KEY RISKS AND UNCERTAINTIES
Successful risk management underpins Intu's ability to achieve its strategic objectives
Intu's Board has responsibility for establishing the Group's appetite for risk based on the balance of potential risks and
returns, and has overall responsibility for managing risks. Risk management is embedded in Intu's culture so that all
employees play a part. This may be cleaners making sure that the centres are free of hazards or the construction team
ensuring the right contractors are selected for developments.
Risks are considered in the day-to-day decisions made by the business and this assessment of risk is underpinned by a
formal risk review process conducted by each centre, each department and the Executive team. These reviews identify
risks and assess them for controllability and stability.
Risks are measured for impact and likelihood; gross risk being the worst case scenario if there were no controls in place; net
risk being the risk as it stands today; and target risk being after any further planned risk reducing measures are
implemented. An assessment is also made of how quickly the risks would impact the business. Impact and likelihood
change as businesses and external factors evolve. Intu's ongoing risk management ensures that changes in impact and
likelihood are identified and managed appropriately.
Change in
Risk and impact Mitigation level of risk 2015 commentary
Property market - Focus on prime assets, Likelihood and severity of potential impact are
- Macro environment upgrading assets and aligning the - unchanged during 2015 with continued strong
weakness could offering with demand, for demand for assets and stable rental levels
undermine rental example by increasing leisure - Valuation increases continue to support
income levels and offering LTV headroom
property values, - Covenant headroom monitored - Tenant administrations at relatively low
reducing return on and stress-tested levels
investment and - Active management of tenant mix - Significant progress on planning and pre-
covenant - Regular monitoring of tenant letting of pipeline, more than half of which
headroom strength and diversity is leisure and catering. Leisure and
- Lobbying on key policies, catering space to increase by almost
for example business rates 50 per cent by 2018
- Digital investment to improve relevance as
shopping habits change
Financing - Funding strategy regularly Likelihood and severity of potential impact are
- Reduced reported to Board with current - unchanged during 2015 with regular
availability of funds and projected funding position refinancing activity undertaken continuing to
could limit liquidity, - Effective treasury management evidence the availability of funding
leading to aimed at balancing long debt - Extension of GBP351.8 million SGS term loan
restriction of maturity profile and diversification at significantly reduced margin
investing and of sources of finance - Refinancing of EUR225 million of debt on
operating activities - Consideration of financing plans acquisition of Puerto Venecia, Zaragoza
and/or increase in including potential for recycling of
funding cost capital before commitment to
transactions and developments
- Strong relationships with
lenders/shareholders
Operations - Strong business process and - Likelihood and severity of potential impact
- Accidents, system procedures, supported by regular have not changed significantly during 2015
failure or external training and exercises, designed - Ongoing group-wide cyber security project
factors could to adapt and respond to changes with focus on proactive monitoring of
threaten the safe in risk levels technical infrastructure to mitigate cyber
and secure - Annual audits of operational threats
environment standards carried out internally - Work continuing towards achieving ISO
provided for and by external consultants 9001, 14001, 18001 and 55001
shoppers and - Culture of visitor and staff safety accreditation
retailers, leading to - Crisis management and business - intu Retail Services has continued to
financial and/or continuity plans in place and deliver improvements in systems and
reputational loss tested, including cyber security processes, including investment in new
threats facilities management and contractor
- Retailer liaison and briefings tracking systems
- Appropriate levels of insurance - All individual intu centres and intu Retail
- Staff succession planning and Services awarded Investors in People
development in place to ensure accreditation
continued delivery of World Class - Continuing reductions in exposure to
Service future energy costs. 30 per cent reduction
- Strong relationships and frequent in carbon emissions from 2011 achieved
liaison with Police, NaCTSO and in 2014. New target of 50 per cent
other agencies reduction against 2011 levels set
Strategy and - Annual strategic review by Board Likelihood and severity of potential impact
execution informed by external research - have remained unchanged in 2015 with no
- Misjudged or poorly and advice significant new strategies implemented in the
executed strategy - Board and management team period
fails to create experienced in shopping centre - New Spanish Management structure
shareholder value and broader retail industry implemented to enhance delivery of
- Engagement with national and strategic goals
international retailers - Spanish capital structure strengthened
- Specialist advice and extensive through agreement of Puerto Venecia,
research supporting major Zaragoza joint venture with CPPIB in line
initiatives with plans on acquisition
- Careful assessment of potential
partners to complement Intu's
skills, experience and resources
- Rigorous control and review
procedures in place to ensure
successful implementation of
strategy
Development and - Capital Projects Committee Likelihood and severity of potential impact
acquisition reviews detailed appraisals - have remained unchanged in 2015
- Misjudged or poorly before and monitors progress - Substantial property and financial due
executed project during significant projects diligence undertaken before acquisition of
results in increased - Research and third party due Puerto Venecia, Zaragoza
cost or income diligence undertaken for - Detailed appraisal work and significant
foregone, hence transactions including local pre-lets continuing ahead of starting major
fails to create specialists in Spain development projects
shareholder value - Fixed price contracts for - Exercise of the option to acquire land in
developments Málaga completed in May
- Local partner in Spain wit
market specialist knowledge
Brand - Intellectual property protection UP Likelihood and severity of potential impact
- The integrity of the - Strong guidelines for use of brand have increased during 2015 as the brand has
brand is damaged - Strong underlying operational continued to gain momentum with a launch in
or the commercial controls and crisis management Spain and a higher UK profile
benefits of the procedures - Introduced intu brand in Spain through intu
brand are not - Ongoing training programme and Asturias with key mitigating controls being
realised rewards and recognition schemes implemented
designed to embed brand values - Increased media interest in intu and our
and culture throughout the opinions
organisation - Increase in nationally promoted campaigns
- Traditional and digital media
monitoring and analysis
- Tell intu customer feedback
programme
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the interim report and condensed consolidated set of interim financial
statements (interim financial statements), in accordance with applicable law and regulations. The Directors confirm that, to
the best of their knowledge:
- the interim financial statements have 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 Reviews refer 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 Reviews.
Related party transactions are set out in note 26 of the interim 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
30 July 2015
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 2015. 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 2015;
- 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 1 to 26 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
30 July 2015
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 2015
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Notes GBPm GBPm GBPm
Revenue 4 281.9 261.5 536.4
Net rental income 4 186.4 177.6 362.6
Net other income 5 3.1 1.8 4.8
Revaluation of investment and development property 14 99.0 547.2 567.8
Gain on acquisition of businesses 25 0.8 1.2 1.6
Gain on disposal of subsidiaries – 0.6 0.6
Gain on sale of other investments 0.9 – –
Administration expenses – ongoing (16.2) (14.9) (30.8)
Administration expenses – exceptional 6 (0.6) (11.9) (13.8)
Operating profit 273.4 701.6 892.8
Finance costs 7 (104.2) (95.4) (197.1)
Finance income 8 8.6 3.6 11.9
Other finance costs 9 (19.3) (25.9) (56.8)
Change in fair value of financial instruments 32.0 (16.1) (157.6)
Net finance costs (82.9) (133.8) (399.6)
Profit before tax, joint ventures and associates 190.5 567.8 493.2
Share of post-tax profit of joint ventures 15 74.1 33.0 99.7
Share of post-tax profit of associates 16 1.0 1.2 0.8
Profit before tax 265.6 602.0 593.7
Current tax 10 (0.3) (0.3) (0.5)
Deferred tax 10 (3.0) 0.6 6.6
Taxation (3.3) 0.3 6.1
Profit for the period 262.3 602.3 599.8
Attributable to:
Owners of Intu Properties plc 266.3 588.3 586.2
Non-controlling interests (4.0) 14.0 13.6
262.3 602.3 599.8
Basic earnings per share 12 20.4p 51.8p 48.0p
Diluted earnings per share 12 19.2p 47.7p 46.3p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
For the six months ended 30 June 2015
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
Profit for the period 262.3 602.3 599.8
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Revaluation of other investments (note 17) (16.0) 8.3 21.1
Exchange differences (13.9) (7.9) 7.0
Tax relating to components of other comprehensive income (note 10) 3.0 (0.6) (6.6)
Total items that may be reclassified subsequently to profit or loss (26.9) (0.2) 21.5
Reclassified to income statement on sale of other investments (0.6) – –
Other comprehensive income for the period (27.5) (0.2) 21.5
Total comprehensive income for the period 234.8 602.1 621.3
Attributable to:
Owners of Intu Properties plc 238.8 588.5 608.1
Non-controlling interests (4.0) 13.6 13.2
234.8 602.1 621.3
CONSOLIDATED BALANCE SHEET (unaudited)
As at 30 June 2015
As at As at As at
30 June 31 December 30 June
2015 2014 2014
Notes GBPm GBPm GBPm
Non-current assets
Investment and development property 14 8,509.5 8,019.6 7,956.6
Plant and equipment 4.9 5.1 6.2
Investments in joint ventures 15 906.4 851.5 715.8
Investments in associates 16 38.3 38.0 36.8
Other investments 17 169.1 189.7 158.1
Goodwill 4.0 4.0 4.0
Derivative financial instruments 1.9 9.0 20.0
Trade and other receivables 86.5 99.7 92.4
9,720.6 9,216.6 8,989.9
Current assets
Trade and other receivables 112.8 114.7 110.6
Derivative financial instruments 6.3 0.7 0.7
Cash and cash equivalents 18 235.9 230.0 172.6
355.0 345.4 283.9
Total assets 10,075.6 9,562.0 9,273.8
Current liabilities
Trade and other payables (282.0) (251.5) (245.9)
Current tax liabilities (0.5) (0.6) (0.6)
Borrowings 19 (131.0) (21.3) (68.3)
Derivative financial instruments (14.7) (80.7) (8.9)
(428.2) (354.1) (323.7)
Non-current liabilities
Borrowings 19 (4,540.7) (4,332.7) (4,103.3)
Derivative financial instruments (311.3) (275.8) (224.3)
Other payables (2.6) (2.6) (3.2)
(4,854.6) (4,611.1) (4,330.8)
Total liabilities (5,282.8) (4,965.2) (4,654.5)
Net assets 4,792.8 4,596.8 4,619.3
Equity
Share capital 21 669.6 658.4 634.5
Share premium 21 1,287.7 1,222.0 1,085.2
Treasury shares (43.5) (45.1) (45.3)
Convertible bonds 22 – – 143.7
Other reserves 330.5 358.0 500.7
Retained earnings 2,477.6 2,330.7 2,227.3
Attributable to owners of Intu Properties plc 4,721.9 4,524.0 4,546.1
Non-controlling interests 70.9 72.8 73.2
Total equity 4,792.8 4,596.8 4,619.3
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)
For the six months ended 30 June 2015
Attributable to owners of Intu Properties plc
Non-
Share Share Treasury Other Retained controlling Total
capital premium shares reserves earnings Total interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2015 658.4 1,222.0 (45.1) 358.0 2,330.7 4,524.0 72.8 4,596.8
Profit for the period – – – – 266.3 266.3 (4.0) 262.3
Other comprehensive income:
Revaluation of other investments
(note 17) – – – (16.0) – (16.0) – (16.0)
Exchange differences – – – (13.9) – (13.9) – (13.9)
Tax relating to components of
other comprehensive income
(note 10) – – – 3.0 – 3.0 – 3.0
Reclassified to income
statement on sale of other
investments – – – (0.6) – (0.6) – (0.6)
Total comprehensive income
for the period – – – (27.5) 266.3 238.8 (4.0) 234.8
Ordinary shares issued (note 21) 11.2 65.7 – – – 76.9 – 76.9
Dividends (note 11) – – – – (118.3) (118.3) – (118.3)
Share-based payments – – – – 1.9 1.9 – 1.9
Acquisition of treasury shares – – (1.4) – – (1.4) – (1.4)
Disposal of treasury shares – – 3.0 – (3.0) – – –
Non-controlling interest additions – – – – – – 2.1 2.1
11.2 65.7 1.6 – (119.4) (40.9) 2.1 (38.8)
At 30 June 2015 669.6 1,287.7 (43.5) 330.5 2,477.6 4,721.9 70.9 4,792.8
Attributable to owners of Intu Properties plc
Non-
Share Share Treasury Convertible Other Retained controlling Total
capital premium shares bonds reserves earnings Total interest 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 year – – – – – 586.2 586.2 13.6 599.8
Other comprehensive income:
Revaluation of other
investments – – – – 21.1 – 21.1 – 21.1
Exchange differences – – – – 7.4 – 7.4 (0.4) 7.0
Tax relating to components
of other comprehensive
income (note 10) – – – – (6.6) – (6.6) – (6.6)
Total comprehensive
income for the year – – – – 21.9 586.2 608.1 13.2 621.3
Conversion of bond 21.2 122.5 – (143.7) – – – – –
Other ordinary shares issued 150.3 403.9 – – – – 554.2 – 554.2
Dividends (note 11) – – – – – (155.9) (155.9) – (155.9)
Interest on convertible
bonds – – – – – (2.9) (2.9) – (2.9)
Share-based payments – – – – – 2.5 2.5 – 2.5
Acquisition of treasury shares – – (1.0) – – – (1.0) – (1.0)
Disposal of treasury shares – – 4.1 – – (3.9) 0.2 – 0.2
Non-controlling interest
additions – – – – – – – 27.2 27.2
Distribution to non-controlling
interest – – – – – – – (1.2) (1.2)
Disposal of subsidiaries – – – – – – – (68.7) (68.7)
Realisation of merger reserve – – – – (164.4) 164.4 – – –
171.5 526.4 3.1 (143.7) (164.4) 4.2 397.1 (42.7) 354.4
At 31 December 2014 658.4 1,222.0 (45.1) – 358.0 2,330.7 4,524.0 72.8 4,596.8
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 – – – – 8.3 – 8.3 – 8.3
Exchange differences – – – – (7.5) – (7.5) (0.4) (7.9)
Tax relating to
components of other
comprehensive income
(note 10) – – – – (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 – – – – – (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)
Disposal of subsidiaries – – – – – – – (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) 143.7 500.7 2,227.3 4,546.1 73.2 4,619.3
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
For the six months ended 30 June 2015
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Notes GBPm GBPm GBPm
Cash flows from continuing operations
Cash generated from operations 20 199.2 146.2 292.7
Interest paid (113.5) (121.0) (244.6)
Interest received 8.6 0.5 8.8
Taxation (0.3) (0.1) (0.4)
Cash flows from operating activities 94.0 25.6 56.5
Cash flows from investing activities
Purchase and development of property, plant and equipment (60.2) (26.3) (69.7)
Sale of property 0.3 – –
Acquisition of businesses net of cash acquired 25 (203.1) (864.2) (851.3)
Acquisition of other investments – – (3.8)
Sale of other investments 4.7 – –
Realisation of short-term investments – 69.3 69.3
Cash received on part disposal of intu Uxbridge net of cash sold
with business – 173.3 174.1
intu Asturias cash received net of cash reclassified – (11.6) (11.6)
Investments in joint ventures 15 – – (0.4)
Loan advances to joint ventures 15 (0.2) (1.8) (97.6)
Repayment of capital by joint venture 15 – – 14.3
Loan repayments by joint ventures 15 10.2 46.0 52.7
Distributions from joint ventures 15 5.0 – 4.9
Cash flows from investing activities (243.3) (615.3) (719.1)
Cash flows from financing activities
Issue of ordinary shares 21.7 491.5 492.0
Acquisition of treasury shares (1.4) (1.0) (1.0)
Sale of treasury shares – – 0.2
Non-controlling interest funding received 2.1 27.2 27.2
Cash transferred from/(to) restricted accounts 17.2 0.2 (15.9)
Borrowings drawn 344.7 522.8 989.4
Borrowings repaid (149.9) (378.8) (675.1)
Interest on convertible bonds – (2.9) (2.9)
Equity dividends paid (63.4) (49.1) (89.8)
Cash flows from financing activities 171.0 609.9 724.1
Effects of exchange rate changes on cash and cash equivalents (0.6) (0.1) (0.1)
Net increase in cash and cash equivalents 21.1 20.1 61.4
Cash and cash equivalents at beginning of period 212.5 151.1 151.1
Cash and cash equivalents at end of period 18 233.6 171.2 212.5
NOTES (unaudited)
1 Basis of preparation
The condensed consolidated set of interim financial statements (interim financial statements) for the six months ended
30 June 2015 are unaudited and do not constitute statutory financial statements within the meaning of s434 of the Companies
Act 2006. The interim financial statements have 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 2014 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 interim financial statements should be read in conjunction with the Group's financial statements for the year ended
31 December 2014 which have been prepared in accordance with International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
Use of estimates and assumptions
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 interim 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 2014.
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.
Going concern
The Group prepares regular forecasts and projections which include sensitivity analysis taking into account a number of
downside risks to the forecast including 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 GBP259.6 million of cash (including the Group's
share of cash held by joint ventures of GBP23.7 million) and GBP239.9 million of undrawn facilities at 30 June 2015. The
refinancing of debt completed in recent years, giving the Group a weighted average debt maturity of 8.1 years with no major
refinancing due until 2017, along with 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 it is appropriate to
continue to adopt the going concern basis of accounting in preparing the Group's interim 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 2014 as set out on pages 102 to 105 of the Annual Report except for amendments arising from the Annual
Improvements Cycle to IFRSs 2011-2013 which are effective for the first time for the Group's 31 December 2015 year end.
These have been applied in preparing these interim financial statements to the extent they are relevant to the preparation of
interim financial information but have not resulted in any material changes to the information presented.
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 shopping centre focussed business and, following recent acquisition activity, has two reportable operating
segments being UK and Spain.
The principal profit indicator used to measure performance is net rental income. An analysis of net rental income by
segment is given below.
Six months ended 30 June 2015
UK Spain Total
GBPm GBPm GBPm
Rent receivable 219.9 8.4 228.3
Service charge income 46.7 1.7 48.4
Facilities management income from joint ventures 5.2 – 5.2
Revenue 271.8 10.1 281.9
Rent payable (10.9) – (10.9)
Service charge costs (53.3) (1.8) (55.1)
Facilities management costs recharged to joint ventures (5.2) – (5.2)
Other non-recoverable costs (23.5) (0.8) (24.3)
Net rental income 178.9 7.5 186.4
Net rental income included in share of post-tax profit of joint ventures 18.6 2.6 21.2
Net rental income including Group share of joint ventures 197.5 10.1 207.6
Six months ended 30 June 2014
UK Spain Total
GBPm GBPm GBPm
Rent receivable 215.1 3.0 218.1
Service charge income 42.3 0.7 43.0
Facilities management income from joint ventures 0.4 – 0.4
Revenue 257.8 3.7 261.5
Rent payable (10.8) – (10.8)
Service charge costs (48.0) (0.8) (48.8)
Facilities management costs recharged to joint ventures (0.4) – (0.4)
Other non-recoverable costs (23.6) (0.3) (23.9)
Net rental income 175.0 2.6 177.6
Net rental income included in share of post-tax profit of joint ventures 16.7 2.4 19.1
Net rental income including Group share of joint ventures 191.7 5.0 196.7
Year ended 31 December 2014
UK Spain Total
GBPm GBPm GBPm
Rent receivable 438.1 3.0 441.1
Service charge income 87.5 0.7 88.2
Facilities management income from joint ventures 7.1 – 7.1
Revenue 532.7 3.7 536.4
Rent payable (22.2) – (22.2)
Service charge costs (97.9) (0.8) (98.7)
Facilities management costs recharged to joint ventures (7.1) – (7.1)
Other non-recoverable costs (45.5) (0.3) (45.8)
Net rental income 360.0 2.6 362.6
Net rental income included in share of post-tax profit of joint ventures 30.6 3.4 34.0
Net rental income including Group share of joint ventures 390.6 6.0 396.6
5 Net other income
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
Dividends received from other investments 3.4 3.0 6.1
Management fees 1.2 0.4 1.6
intu Digital (1.5) (1.6) (2.9)
Net other income 3.1 1.8 4.8
6 Administration expenses – exceptional
Exceptional administration expenses in the period totalled GBP0.6 million and predominantly related to the acquisition of Puerto
Venecia, Zaragoza.
7 Finance costs
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
On bank loans and overdrafts 98.5 89.9 186.0
On convertible bonds 3.7 3.7 7.5
On obligations under finance leases 2.0 1.8 3.6
Finance costs 104.2 95.4 197.1
Finance costs of GBP0.8 million were capitalised in the six months ended 30 June 2015 (six months ended 30 June 2014 GBPnil, year
ended 31 December 2014 GBPnil).
8 Finance income
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
Interest receivable on loans to joint ventures 8.2 3.1 10.7
Other finance income 0.4 0.5 1.2
Finance income 8.6 3.6 11.9
9 Other finance costs
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
Amortisation of Metrocentre compound financial instruments 2.9 3.1 6.1
Costs of termination of derivative financial instruments and other costs(1) 13.4 20.9 48.4
Foreign currency movements(1) 3.0 1.9 2.3
Other finance costs 19.3 25.9 56.8
(1) Amounts totalling GBP16.4 million in the six months ended 30 June 2015 are treated as exceptional and therefore excluded from
underlying earnings (six months ended 30 June 2014 – GBP22.8 million, year ended 31 December 2014 – GBP50.7 million).
10 Taxation
Taxation for the period:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
Current tax 0.3 0.3 0.5
Deferred tax:
On investment and development property (0.8) – –
On other investments (0.2) (0.3) (0.9)
On derivative financial instruments 3.5 (0.3) (5.6)
On other temporary differences 0.5 – (0.1)
Deferred tax 3.0 (0.6) (6.6)
Total tax charge/(credit) 3.3 (0.3) (6.1)
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 2015 – 14.1 (13.6) (0.5) –
Acquisition of Puerto Venecia, Zaragoza 6.1 – – (6.1) –
Recognised in the income statement (0.8) (0.2) 3.5 0.5 3.0
Recognised in other comprehensive income – (3.0) – – (3.0)
Foreign exchange movements (0.5) – – 0.5 –
At 30 June 2015 4.8 10.9 (10.1) (5.6) –
Unrecognised deferred tax asset:
At 1 January 2015 (0.5) – (40.0) (55.7) (96.2)
Acquisition of Puerto Venecia, Zaragoza – – – (5.0) (5.0)
Income statement items (0.1) – (0.2) (2.7) (3.0)
Foreign exchange movements – – – (0.4) (0.4)
At 30 June 2015 (0.6) – (40.2) (63.8) (104.6)
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
2015 2014 2014
GBPm GBPm GBPm
Final dividend declared of 9.1(1) pence per share 118.3 96.2 96.2
2014 interim dividend paid of 4.6 pence per share – – 59.7
Dividends declared 118.3 96.2 155.9
Proposed 2015 interim dividend of 4.6 pence per share 61.6
(1) Net of tax and non-controlling interests.
In the six months to 30 June 2015, the Company offered shareholders the option to receive ordinary shares in lieu of the
cash 2014 final dividend of 9.1 pence per share under the Scrip Dividend Scheme. As a result of elections made by
shareholders 16,071,625 new ordinary shares of 50 pence each were issued on 28 May 2015 in lieu of dividends otherwise
payable, and GBP55.1 million of cash was retained in the business.
In 2014, the Scrip Dividend Scheme resulted in GBP62.2 million of cash being retained in the business of which GBP45.7 million
was retained in the six months ended 30 June 2014.
12 Earnings per share
(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.
Six months ended Six months ended Year ended
30 June 2015 30 June 2014 31 December 2014
Pence Pence Pence
Earnings Shares per Earnings Shares per Earnings Shares per
GBPm million share GBPm million share GBPm million share
Profit for the period attributable to
owners of Intu Properties plc 266.3 588.3 586.2
Interest on convertible bonds
recognised in equity – (2.9) (2.9)
Basic earnings per share(1) 266.3 1,308.3 20.4p 585.4 1,129.5 51.8p 583.3 1,214.6 48.0p
Dilutive convertible bonds,
share options and share awards 1.5 86.6 12.9 124.6 23.2 96.4
Diluted earnings per share 267.8 1,394.9 19.2p 598.3 1,254.1 47.7p 606.5 1,311.0 46.3p
(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.
(b) Headline earnings per share
Headline earnings per share has been calculated and presented as required by the Johannesburg Stock Exchange listing
requirements.
Six months ended Six months ended Year ended
30 June 2015 30 June 2014 31 December 2014
Gross Net(1) Gross Net(1) Gross Net(1)
GBPm GBPm GBPm GBPm GBPm GBPm
Basic earnings 266.3 585.4 583.3
Remove:
Revaluation of investment and development property (99.0) (101.3) (547.2) (534.0) (567.8) (552.9)
Gain on sale of other investments (0.9) (0.9) – – – –
Gain on acquisition of businesses (0.8) (0.8) (1.2) (1.2) (1.6) (1.6)
Gain on disposal of subsidiaries – – (0.6) (0.6) (0.6) (0.6)
Share of joint ventures' adjusting items (63.2) (62.5) (26.1) (26.1) (80.4) (80.4)
Share of associates' adjusting items (0.9) (0.9) (1.2) (1.2) (0.8) (0.8)
Headline earnings/(loss) 99.9 22.3 (53.0)
Dilution(2) 1.5 12.9 23.2
Diluted headline earnings/(loss) 101.4 35.2 (29.8)
Weighted average number of shares (million) 1,308.3 1,129.5 1,214.6
Dilution(2)(million) 86.6 124.6 96.4
Diluted weighted average number of shares (million) 1,394.9 1,254.1 1,311.0
Headline earnings/(loss) per share (pence) 7.6p 2.0p (4.4)p
Diluted headline earnings/(loss) per share (pence) 7.3p 2.8p (2.3)p
(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 underlying earnings.
Six months ended Six months ended Year ended
30 June 2015 30 June 2014 31 December 2014
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 (per note
12a) 266.3 1,308.3 20.4p 585.4 1,129.5 51.8p 583.3 1,214.6 48.0p
Remove:
Revaluation of investment and
development property (99.0) (7.6)p (547.2) (48.4)p (567.8) (46.7)p
Gain on sale of other investments (0.9) (0.1)p – – – –
Gain on acquisition of businesses (0.8) – (1.2) (0.1)p (1.6) (0.1)p
Gain on disposal of subsidiaries – – (0.6) (0.1)p (0.6) –
Exceptional administration expenses 0.6 – 11.9 1.1p 13.8 1.1p
Exceptional finance costs 16.4 1.3p 22.8 2.1p 50.7 4.2p
Change in fair value of
financial instruments (32.0) (2.4)p 16.1 1.4p 157.6 13.0p
Tax on the above 3.0 0.2p (0.6) (0.1)p (6.7) (0.6)p
Share of joint ventures' adjusting
items (62.5) (4.8)p (26.6) (2.4)p (81.1) (6.7)p
Share of associates' adjusting items (0.9) (0.1)p (1.2) (0.1)p (0.8) (0.1)p
Non-controlling interests
in respect of the above (1.5) (0.1)p 13.2 1.2p 14.9 1.2p
Underlying earnings per share 88.7 1,308.3 6.8p 72.0 1,129.5 6.4p 161.7 1,214.6 13.3p
Dilutive convertible bonds,
share options and share awards 3.7 86.6 6.6 124.6 10.4 96.4
Underlying, diluted earnings
per share 92.4 1,394.9 6.6p 78.6 1,254.1 6.3p 172.1 1,311.0 13.1p
13 Net assets per share
(a) NAV per share (diluted, adjusted)
NAV per share (diluted, adjusted) is a non-GAAP measure but has been included as it is considered to be a key measure of the
Group's performance.
As at 30 June 2015 As at 31 December 2014 As at 30 June 2014
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) 4,721.9 1,326.5 356p 4,524.0 1,303.7 347p 4,546.1 1,255.8 362p
Dilutive convertible bonds,
share options and share
awards 16.4 6.6 22.2 8.6 18.1 49.8
Diluted NAV per share 4,738.3 1,333.1 355p 4,546.2 1,312.3 347p 4,564.2 1,305.6 350p
Remove:
Fair value of derivative
financial instruments
(net of tax) 307.7 23p 333.2 26p 204.2 16p
Deferred tax on investment
and development property
and other investments 15.7 2p 14.1 1p 8.7 1p
Share of joint ventures'
adjusting items 4.2 – 4.1 – 4.5 –
Add:
Non-controlling interest
recoverable balance not
recognised 71.3 5p 71.3 5p 71.3 5p
NAV per share (diluted,
adjusted) 5,137.2 1,333.1 385p 4,968.9 1,312.3 379p 4,852.9 1,305.6 372p
(1) The number of shares used has been adjusted for shares held in the ESOP.
(b) NNNAV per share (diluted, adjusted)
NNNAV per share (diluted, adjusted) is a non-GAAP measure but has been included as it is considered to be an industry standard
comparable measure.
As at 30 June 2015 As at 31 December 2014 As at 30 June 2014
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) 5,137.2 1,333.1 385p 4,968.9 1,312.3 379p 4,852.9 1,305.6 372p
Fair value of derivative
financial instruments (net of
tax) (307.7) (23)p (333.2) (26)p (204.2) (16)p
Excess of fair value of debt
over book value (214.2) (16)p (310.2) (24)p (105.7) (8)p
Deferred tax on investment
and development property
and other investments (15.7) (2)p (14.1) (1)p (8.7) (1)p
Share of joint ventures'
adjusting items (6.0) – (6.0) – (6.6) –
Non-controlling interests
on the above 11.8 1p 17.0 1p 6.1 –
NNNAV per share (diluted,
adjusted) 4,605.4 1,333.1 345p 4,322.4 1,312.3 329p 4,533.8 1,305.6 347p
14 Investment and development property
GBPm
At 1 January 2015 8,019.6
Acquisition of Puerto Venecia, Zaragoza (note 25) 344.2
Additions 73.4
Disposals (0.3)
Surplus on revaluation 99.0
Foreign exchange movements (26.4)
At 30 June 2015 8,509.5
As at As at As at
30 June 31 December 30 June
2015 2014 2014
GBPm GBPm GBPm
Balance sheet carrying value of investment and development property 8,509.5 8,019.6 7,956.6
Tenant incentives included within trade and other receivables 98.4 96.9 91.2
Head leases included within finance leases in borrowings (34.6) (34.9) (35.4)
Market value of investment and development property 8,573.3 8,081.6 8,012.4
The fair value of the Group's investment and development property as at 30 June 2015 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 interest in its principal joint ventures is 50 per cent.
St David's, intu intu
Cardiff Merry Hill Asturias Other Total
GBPm GBPm GBPm GBPm GBPm
At 1 January 2015 310.9 433.0 47.3 60.3 851.5
Share of underlying profit 6.3 3.6 0.2 1.5 11.6
Share of other net profit 47.9 10.9 3.3 0.4 62.5
Share of profit 54.2 14.5 3.5 1.9 74.1
Distributions – (3.3) – (1.7) (5.0)
Loan advances – – – 0.2 0.2
Loan repayments (10.2) – – – (10.2)
Foreign exchange movements – – (4.2) – (4.2)
At 30 June 2015 354.9 444.2 46.6 60.7 906.4
Represented by:
Loans to joint venture 118.4 386.2 29.9 2.1 536.6
Equity 236.5 58.0 16.7 58.6 369.8
St David's, intu intu
Cardiff Merry Hill Asturias Other Total
GBPm GBPm GBPm GBPm GBPm
At 1 January 2014 194.6 – – 14.9 209.5
Acquisition of intu Merry Hill – 403.8 – - 403.8
intu Uxbridge – – – 43.0 43.0
intu Asturias – – 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, intu intu
Cardiff Merry Hill Asturias Other Total
GBPm GBPm GBPm GBPm GBPm
At 1 January 2014 194.6 – – 14.9 209.5
Acquisition of intu Merry Hill – 403.8 – – 403.8
intu Uxbridge – – – 43.0 43.0
intu Asturias – – 71.3 – 71.3
Other additions – – – 0.4 0.4
Share of underlying profit 11.3 5.1 0.4 1.8 18.6
Share of other net profit 38.8 26.8 13.9 1.6 81.1
Share of profit 50.1 31.9 14.3 3.4 99.7
Distributions – (2.7) – (2.2) (4.9)
Repayment of capital – – (14.3) – (14.3)
Loan advances 79.7 – 17.1 0.8 97.6
Loan repayments (13.5) – (39.2) – (52.7)
Foreign exchange movements – – (1.9) – (1.9)
At 31 December 2014 310.9 433.0 47.3 60.3 851.5
Represented by:
Loans to joint venture 128.6 386.2 31.6 1.9 548.3
Equity 182.3 46.8 15.7 58.4 303.2
16 Investments in associates
GBPm
At 1 January 2015 38.0
Share of profit 1.0
Foreign exchange movements (0.7)
At 30 June 2015 38.3
Investment in associates comprises a 32.4 per cent holding in the ordinary shares of Prozone Intu Properties Limited
(formerly Prozone Capital Shopping Centres Limited) ('Prozone') (incorporated in India).
As required by IAS 28 Investments in Associates and Joint Ventures, the equity method of accounting is applied in
accounting for the Group's investment in Prozone. The results of Prozone for the year to 31 March have been used as 30
June information is not available in time for these financial statements. Those results are adjusted to be in line with the
Group's accounting policies and include the most recent property valuations, as at 31 March 2015, determined by
independent professionally qualified external valuers in line with the valuation methodology described in note 14. The
market price per share at 30 June 2015 was INR31 (31 December 2014 – INR26, 30 June 2014 – INR21), valuing the
Group's interest at GBP15.3 million. Following a review of the accounting for this investment it was concluded that no
adjustment was required to the carrying value.
17 Other investments
GBPm
At 1 January 2015 189.7
Disposals (4.4)
Revaluation (16.0)
Foreign exchange movements (0.2)
At 30 June 2015 169.1
Other investments predominantly relate to 11.4 million units in a US venture controlled by Equity One, convertible into Equity
One shares. The fair value of the investments in Equity One is measured by reference to the Equity One share price.
18 Cash and cash equivalents
As at As at As at
30 June 31 December 30 June
2015 2014 2014
GBPm GBPm GBPm
Unrestricted cash 233.6 212.5 171.2
Restricted cash 2.3 17.5 1.4
235.9 230.0 172.6
19 Borrowings
As at As at As at
30 June 31 December 30 June
2015 2014 2014
GBPm GBPm GBPm
Current
Bank loans and overdrafts 113.4 1.7 46.9
Commercial mortgage backed securities ("CMBS") notes 14.8 16.5 17.1
Loan notes 2014 – – 1.4
Current borrowings, excluding finance leases 128.2 18.2 65.4
Finance lease obligations 2.8 3.1 2.9
131.0 21.3 68.3
Non-current
Revolving Credit Facility 2019 400.8 230.0 65.0
CMBS notes 2015 – – 1.1
CMBS notes 2019 19.5 19.5 19.6
CMBS notes 2022 51.1 51.2 51.4
CMBS notes 2024 87.4 87.4 87.2
CMBS notes 2029 86.2 88.6 90.9
CMBS notes 2033 345.5 351.8 358.0
CMBS notes 2035 187.3 186.2 185.1
Bank loans 2016 219.0 330.8 733.6
Bank loan 2017 166.9 166.5 166.2
Bank loan 2018 – 347.9 347.2
Bank loan 2019 155.3 – –
Bank loan 2020 346.9 – –
Bank loan 2021 120.5 120.3 –
3.875% bonds 2023 440.8 440.2 439.8
4.125% bonds 2023 476.2 475.8 475.3
4.625% bonds 2028 340.9 340.6 340.4
4.250 bonds 2030 344.3 344.5 –
Debentures 2027 228.0 227.9 227.8
2.5% convertible bonds 2018 (note 22) 323.3 325.6 319.1
Non-current borrowings, excluding finance leases and Metrocentre
compound financial instrument 4,339.9 4,134.8 3,907.7
Metrocentre compound financial instrument 169.0 166.1 163.1
Finance lease obligations 31.8 31.8 32.5
4,540.7 4,332.7 4,103.3
Total borrowings 4,671.7 4,354.0 4,171.6
Cash and cash equivalents (235.9) (230.0) (172.6)
Net debt 4,435.8 4,124.0 3,999.0
The fair value of total borrowings as at 30 June 2015 was GBP4,885.9 million.
Details of the Group's net external debt are provided in the Other information section.
20 Cash generated from operations
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Notes GBPm GBPm GBPm
Profit before tax, joint ventures and associates 190.5 567.8 493.2
Remove:
Revaluation of investment and development property 14 (99.0) (547.2) (567.8)
Gain on acquisition of businesses (0.8) (1.2) (1.6)
Gain on disposal of subsidiaries – (0.6) (0.6)
Gain on sale of other investments (0.9) – –
Depreciation 1.2 1.0 2.1
Share-based payments 1.9 1.6 2.5
Lease incentives and letting costs (1.6) (2.9) (8.3)
Finance costs 7 104.2 95.4 197.1
Finance income 8 (8.6) (3.6) (11.9)
Other finance costs 9 19.3 25.9 56.8
Change in fair value of financial instruments (32.0) 16.1 157.6
Changes in working capital:
Change in trade and other receivables 9.1 (16.9) (29.6)
Change in trade and other payables 15.9 10.8 3.2
Cash generated from operations 199.2 146.2 292.7
21 Share capital and share premium
Share Share
capital premium
GBPm GBPm
Issued and fully paid
At 31 December 2014 – 1,316,838,051 ordinary shares of 50p each 658.4 1,222.0
Shares issued 11.2 65.7
At 30 June 2015 – 1,339,190,202 ordinary shares of 50p each 669.6 1,287.7
During the period the Company issued a total of 24,451 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 20 May 2015, the Company issued 6,256,075 new ordinary shares of 50p each to entities in the Peel Group at GBP3.4635
per share in connection with the purchase of the two parcels of land in the province of Málaga, Spain. As a result share
capital increased by GBP3.1 million and share premium by GBP18.6 million. See note 26.
On 28 May 2015, the Company issued 16,071,625 new ordinary shares of 50p each to shareholders who elected to receive
their 2014 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
24 to 30 March 2015 inclusive less the gross amount of dividend payable. As a result share capital increased by GBP8.0
million and share premium by GBP47.1 million.
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 2015, the exchange price was GBP3.4864 per ordinary share (31 December 2014 – GBP3.5759, 30 June 2014 –
GBP3.6278). 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 2015.
At 30 June 2015, the fair value of the bonds was GBP323.3 million (31 December 2014 – GBP325.6 million 30 June 2014 – GBP319.1
million). During the six months ended 30 June 2015, interest of GBP3.7 million has been recognised on these bonds within
finance costs (six months ended 30 June 2014 – GBP3.7 million, year ended 31 December 2014 – GBP7.5 million).
23 Financial instruments
The table below presents the Group's financial assets and liabilities recognised at fair value.
As at 30 June 2015
Level 1 Level 2 Level 3 Total
GBPm GBPm GBPm GBPm
Assets
Derivative financial instruments:
– Fair value through profit or loss – 8.2 – 8.2
Available-for-sale investments 0.6 168.5 – 169.1
Total assets 0.6 176.7 – 177.3
Liabilities
Convertible bonds:
– Designated as at fair value through profit or loss 323.3 – – 323.3
Derivative financial instruments:
– Fair value through profit or loss – 326.0 – 326.0
Total liabilities 323.3 326.0 – 649.3
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
investments where there is no active market, fair value is assessed using an appropriate methodology.
24 Capital commitments
At 30 June 2015, the Board had approved GBP65.2 million of future expenditure for the purchase, construction, development
and enhancement of investment property. Of this, GBP44.0 million is contractually committed.
25 Acquisition of Puerto Venecia, Zaragoza
On 19 January 2015 the Group acquired 100 per cent of the share capital of Puerto Venecia Investments SOCIMI SA for
total cash consideration of EUR273.5 million (GBP208.8 million). The cash flow statement outflow of GBP203.1 million reflects the
GBP208.8 million less the unrestricted cash acquired of GBP5.7 million. Acquisition related costs of GBP1.1 million were incurred and
recognised in the income statement in exceptional administration expenses during 2014 and 2015.
The company acquired owns Puerto Venecia, a shopping centre in Zaragoza, Spain.
The fair value of assets and liabilities acquired is set out in the table below.
Fair value
GBPm
Assets
Investment and development property 344.2
Cash and cash equivalents (including restricted cash of GBP2.4 million) 8.1
Derivative financial instruments 0.1
Trade and other receivables 2.6
Total assets 355.0
Liabilities
Trade and other payables (7.2)
Borrowings (138.2)
Total liabilities (145.4)
Net assets 209.6
The fair value of the assets and liabilities acquired exceeds the fair value of the consideration and as a result a gain of GBP0.8
million is recognised in the income statement on acquisition.
During the period the acquired business contributed GBP10.1 million to the revenue of the Group and GBP2.1 million to the profit of
the Group.
26 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. In 2012, the Group acquired for EUR2.5 million, alongside a refundable
deposit of EUR7.5 million, an option to purchase two parcels of land in the province of Málaga, Spain from Peel Holdings
Limited.
Following shareholder approval at a General Meeting on 15 April 2015 the Group exercised the option in May 2015 for
consideration of EUR48.7 million which included the EUR7.5m deposit paid in 2012.
Under the term of the agreement, the Peel Group subscribed to EUR30.0 million of ordinary shares in the Group. As a result,
the Company issued 6,256,075 new ordinary shares of 50p each. The shares were issued and paid for in cash at GBP3.4635
per share being the 30-day average of the volume weighted average price of the Company's shares.
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.
OTHER INFORMATION
INVESTMENT AND DEVELOPMENT PROPERTY (unaudited)
Property data – including Group share of joint ventures
Net initial
Market yield "Topped-up" Nominal
value Notes equivalent
GBPm Ownership (EPRA) NIY (EPRA)(F) yield Occupancy
As at 30 June 2015
Subsidiaries
intu Trafford Centre 2,210.0 100% 3.9% 3.9% 4.5% 96%
intu Lakeside 1,294.0 100% 4.3% 4.4% 4.8% 95%
(A)
intu Metrocentre 930.0 90% 4.5% 4.6% 5.4% 94%
intu Braehead 599.8 100% 3.9% 4.2% 5.8% 93%
(B)
Manchester Arndale 437.8 48% 4.5% 4.7% 5.1% 98%
intu Derby 435.0 100% 6.2% 6.4% 6.0% 98%
intu Watford 336.0 93% 4.6% 4.9% 6.3% 92%
intu Victoria Centre 336.0 100% 4.1% 4.5% 6.1% 93%
Puerto Venecia, Zaragoza 319.4 100% 5.0% 5.0% 6.4% 94%
intu Eldon Square 285.6 60% 4.2% 4.8% 6.0% 97%
intu Milton Keynes 280.0 100% 4.2% 4.5% 4.8% 95%
intu Chapelfield 270.0 100% 5.2% 5.5% 5.9% 99%
(C)
Cribbs Causeway 244.7 33% 4.2% 4.4% 5.5% 93%
intu Bromley 173.2 64% 5.5% 5.7% 7.1% 92%
intu Potteries 171.5 100% 5.1% 5.4% 7.5% 95%
(D)
Other 250.3
Investment and development property
before Group share of joint ventures 8,573.3
Joint ventures
intu Merry Hill 445.6 50% 4.7% 4.9% 4.9% 95%
St David's, Cardiff 355.0 50% 4.3% 4.5% 4.6% 93%
intu Asturias 79.2 50% 5.4% 5.9% 5.6% 100%
Other 57.4
Investment and development property
including Group share of joint ventures 9,510.5 4.37% 4.55% 5.25% 95%(E)
As at 31 December 2014
including Group share of joint ventures 8,963.4 4.36% 4.60% 5.32% 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 interests in intu Broadmarsh, Soar at intu Braehead, development land in Spain and Sprucefield, Northern
Ireland.
(E) The EPRA vacancy rate at 30 June 2015 was 3.0 per cent (31 December 2014 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 share of joint ventures
Market value Revaluation
30 June 31 December surplus/(deficit)
2015 2014 30 June 2015
GBPm GBPm GBPm %
Like-for-like property 9,059.6 8,887.8 164.3 1.9
Acquisitions 319.4 – – n/a
Developments 131.5 75.6 (2.1) n/a
Total investment and development property 9,510.5 8,963.4 162.2 n/a
Additional property information – including Group share of joint ventures
As at As at
30 June 31 December
2015 2014
GBPm GBPm
Passing rent 420.0 401.4
Annual property income 457.8 436.2
ERV 534.6 515.3
Weighted average unexpired lease term 7.7 years 7.4 years
Intu (SGS) Finance plc and Intu (SGS) Finco Limited ('Secured Group Structure')
Interest Interest
Loan LTV LTV cover cover
GBPm Maturity covenant* actual covenant* actual
Term loan 351.8 2020
3.875 per cent bonds 450.0 2023
4.625 per cent bonds 350.0 2028
4.250 per cent bonds 350.0 2030
1,501.8 80% 45% 125% 223%
* Tested on the Security Group, the principle assets of which are intu Lakeside, intu Braehead, intu Watford, intu Victoria Centre, intu
Chapelfield and intu Derby. Further details on the operating covenant regime are included in the 2014 Annual Report.
The Trafford Centre Finance Limited
There are no financial covenants on the intu Trafford Centre debt of GBP804.6 million at 30 June 2015. However a debt service charge
ratio is assessed quarterly and where this falls below specified levels certain restrictions come into force. The loan to 30 June 2015
market value ratio is 36 per cent. No restrictions are in place at present.
Intu Metrocentre Finance plc
Interest Interest
Loan LTV LTV cover cover
GBPm Maturity covenant actual covenant actual
4.125 per cent bonds 485.0 2023 100% 52% 125% 206%
Further details in the operating covenant regime are included in the 2014 Annual Report.
Other asset-specific debt
Loan
outstanding at Loan to Interest Interest
30 July 2015(1) LTV 30 June 2015 cover cover
GBPm Maturity covenant market value(2) covenant actual(3)
intu Bromley 113.1 2016 80% 65% 120% 266%
Sprucefield, Northern Ireland 30.0 2016 65% 44% 150% 467%
intu Merry Hill 191.3 2016 65% 43% 150% 289%
intu Milton Keynes 125.3 2017 65% 45% 150% 229%
Barton Square 42.5 2017 65% 49% 175% 223%
St David's, Cardiff 122.5 2021 65% 35% 150% 324%
intu Asturias(4) EUR47.4m 2019 65% 45% 150% 292%
Puerto Venecia, Zaragoza EUR225.0m 2019 65% 50% 150% 294%
Notes
(1) The loan values are the principal balances outstanding at 30 July 2015, which take into account any principal repayments
made up to 30 July 2015. The balance sheet value of the loans includes unamortised fees.
(2) The Loan to 30 June 2015 market value provides an indication of the impact the 30 June 2015 property valuations 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 2015 and 30 July 2015. The calculations are loan specific and include a variety of historic, forecast and in certain
instances a combined historic and forecast basis.
(4) 50 per cent of the debt is shown which is consistent with the Group's economic interest.
Intu Debenture plc
Capital Capital Interest Interest
Loan cover cover cover cover
GBPm Maturity covenant actual covenant actual
231.4 2027 150% 239% 100% 114%
The debenture is currently secured on a number of the Group's properties including intu Potteries, intu Eldon Square, intu
Broadmarsh and Soar at intu Braehead.
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
Borrowings/ Borrowings/ Interest Interest
Net worth Net worth net worth net worth cover cover
covenant actual covenant* actual covenant* actual
GBP600m facility, maturing in 2019* GBP750m GBP2,540.7m 110% 70% 120% 207%
GBP300m due in 2018 - 2.5 per cent n/a n/a 175% 16% n/a n/a
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.
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.
Nominal amount Average rate
GBPm %
In effect on or after:
1 year 1,635.1 3.12
2 years 1,559.8 3.25
5 years 926.8 4.74
10 years 675.0 4.90
15 years 664.4 4.91
20 years 265.9 4.54
This section presents the financial information of the Group including the share of joint ventures on a line by line basis. It
also includes reconciliations between the information presented in the financial statements and that including the Group's
share of joint ventures as used in the Operating and Financial Reviews.
Underlying profit statement
Six months Six months
ended Six months ended Year ended
30 June ended 31 December 31 December
2015 30 June 2014 2014 2014
GBPm GBPm GBPm GBPm
Net rental income 207.6 189.2 207.4 396.6
Net other income 2.6 2.0 2.8 4.8
Administration expenses (16.3) (14.9) (16.2) (31.1)
Underlying operating profit 193.9 176.3 194.0 370.3
Finance costs (105.1) (97.7) (103.5) (201.2)
Finance income 0.5 0.5 0.7 1.2
Other finance costs (2.9) (3.1) (3.0) (6.1)
Underlying net finance costs (107.5) (100.3) (105.8) (206.1)
Underlying profit before tax and associates 86.4 76.0 88.2 164.2
Tax on underlying profit (0.3) (0.3) (0.6) (0.9)
Share of underlying profit of associates 0.1 – – –
Remove amounts attributable to non-controlling interests 2.5 (0.8) 2.1 1.3
Interest on convertible bonds deducted directly in equity – (2.9) – (2.9)
Underlying earnings 88.7 72.0 89.7 161.7
Underlying earnings per share (pence) 6.8p 6.4p 6.9p 13.3p
Weighted average number of shares (million) 1,308.3 1,129.5 1,297.9 1,214.6
Underlying profit for the six months ended 30 June 2015
Group
Group Share of including
income joint share of joint
statement ventures ventures
GBPm GBPm GBPm
Rent receivable 228.3 24.9 253.2
Service charge income 48.4 5.0 53.4
Facilities management income from joint ventures 5.2 3.0 8.2
Revenue 281.9 32.9 314.8
Net rental income 186.4 21.2 207.6
Net other income 3.1 (0.5) 2.6
Administration expenses (16.2) (0.1) (16.3)
Underlying operating profit 173.3 20.6 193.9
Finance costs (104.2) (0.9) (105.1)
Finance income 8.6 (8.1) 0.5
Other finance costs (2.9) – (2.9)
Underlying net finance costs (98.5) (9.0) (107.5)
Underlying profit before tax, joint ventures and associates 74.8 11.6 86.4
Tax on underlying profit (0.3) – (0.3)
Share of underlying profit of joint ventures 11.6 (11.6) –
Share of underlying profit of associates 0.1 – 0.1
Remove amounts attributable to non-controlling interests 2.5 – 2.5
Underlying earnings 88.7 – 88.7
Consolidated income statement for the six months ended 30 June 2015
Group
Group Share of including
income joint share of joint
tatement ventures ventures
GBPm GBPm GBPm
Revenue 281.9 32.9 314.8
Net rental income 186.4 21.2 207.6
Net other income 3.1 (0.5) 2.6
Revaluation of investment and development property 99.0 63.2 162.2
Gain on acquisition of subsidiaries 0.8 – 0.8
Gain on sale of other investments 0.9 – 0.9
Administration expenses – ongoing (16.2) (0.1) (16.3)
Administration expenses – exceptional (0.6) (0.1) (0.7)
Operating profit 273.4 83.7 357.1
Finance costs (104.2) (0.9) (105.1)
Finance income 8.6 (8.1) 0.5
Other finance costs (19.3) – (19.3)
Change in fair value of financial instruments 32.0 0.2 32.2
Net finance costs (82.9) (8.8) (91.7)
Profit before tax, joint ventures and associates 190.5 74.9 265.4
Share of post-tax profit of joint ventures 74.1 (74.1) –
Share of post-tax profit of associates 1.0 – 1.0
Profit before tax 265.6 0.8 266.4
Current tax (0.3) – (0.3)
Deferred tax (3.0) (0.8) (3.8)
Taxation (3.3) (0.8) (4.1)
Profit for the period 262.3 – 262.3
Balance sheet as at 30 June 2015
Group
Group Share of including
balance joint share of joint
sheet ventures ventures
GBPm GBPm GBPm
Assets
Investment and development property 8,509.5 925.4 9,434.9
Investments 1,113.8 (906.4) 207.4
Derivative financial instruments 8.2 – 8.2
Cash and cash equivalents 235.9 23.7 259.6
Other assets 208.2 17.7 225.9
Total assets 10,075.6 60.4 10,136.0
Liabilities
Borrowings (4,671.7) (32.7) (4,704.4)
Derivative financial instruments (326.0) (0.2) (326.2)
Other liabilities (285.1) (27.5) (312.6)
Total liabilities (5,282.8) (60.4) (5,343.2)
Net assets 4,792.8 – 4,792.8
Investment and development property
30 June 31 December 30 June
2015 2014 2014
GBPm GBPm GBPm
Balance sheet carrying value of investment and development property 9,434.9 8,888.8 8,773.9
Tenant incentives included within trade and other payables 110.2 109.5 104.1
Head leases included within finance leases in borrowings (34.6) (34.9) (35.4)
Market value of investment and development property 9,510.5 8,963.4 8,842.6
Net external debt
30 June 31 December 30 June
2015 2014 2014
GBPm GBPm GBPm
Total borrowings 4,671.7 4,354.0 4,171.6
Cash and cash equivalents (235.9) (230.0) (172.6)
Net debt 4,435.8 4,124.0 3,999.0
Metrocentre compound financial instrument (169.0) (166.1) (163.1)
Net external debt before Group share of joint ventures 4,266.8 3,957.9 3,835.9
Add share of borrowing of joint ventures 32.7 35.6 115.4
Less share of cash of joint ventures (23.7) (30.1) (26.9)
Net external debt including Group share of joint ventures 4,275.8 3,963.4 3,924.4
Analysed as:
Debt including Group share of joint ventures 4,535.4 4,223.5 4,123.9
Cash including Group share of joint ventures (259.6) (260.1) (199.5)
Net external debt including Group share of joint ventures 4,275.8 3,963.4 3,924.4
Debt to assets ratio
30 June 31 December 30 June
2015 2014 2014
GBPm GBPm GBPm
Market value of investment and development property 9,510.5 8,963.4 8,842.6
Net external debt (4,275.8) (3,963.4) (3,924.4)
Debt to assets ratio 45.0% 44.2% 44.4%
EPRA Cost Ratios
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBPm GBPm GBPm
EPRA Costs (including direct vacancy costs) 48.5 44.9 88.2
EPRA Costs (excluding direct vacancy costs) 39.1 35.8 70.3
Gross Rental Income 239.8 219.2 453.7
EPRA Cost Ratio (including direct vacancy costs) 20.2% 20.5% 19.4%
EPRA Cost Ratio (excluding direct vacancy costs) 16.3% 16.4% 15.5%
DIVIDENDS
The Directors of Intu Properties plc have announced an interim dividend per ordinary share (ISIN GB0006834344) of 4.6
pence (2014 – 4.6 pence) payable on 24 November 2015 (see salient dates below). A scrip dividend alternative will
continue to be offered.
The dividend may 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. For South African shareholders, any
non-PID cash dividends may be subject to deduction of South African Dividends Tax at 15 per cent.
Shareholders will be advised of the PID/non-PID split no later than Friday 2 October 2015.
Dates
The following are the salient dates for the payment of the interim dividend:
Thursday, 8 October 2015 Sterling/Rand exchange rate struck.
Friday, 9 October 2015 Sterling/Rand exchange rate and dividend amount in SA currency announced.
Monday, 19 October 2015 Ordinary shares listed ex-dividend on the JSE, Johannesburg
Thursday, 22 October 2015 Ordinary shares listed ex-dividend on the London Stock Exchange.
Friday, 23 October 2015 Record date for interim dividend in London and Johannesburg.
Friday, 30 October 2015 UK shareholders only: Last date for receipt of Tax Exemption Declaration forms to
permit dividends to be paid gross.
Tuesday, 24 November 2015 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 23 October 2015 for shareholders on the
South African register and 30 October 2015 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, 16 October 2015 and that no dematerialisation or rematerialisation of shares will be possible from
Monday, 19 October to Friday, 23 October 2015 inclusive. No transfers between the UK and South African registers may
take place from Wednesday, 7 October to Sunday, 25 October 2015 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,
23 October 2015; 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 Limited, 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.
LTV (Loan to value)
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 after removing the Metrocentre compound financial instrument.
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 an asset at market value before 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)
REITs are internationally recognised property investment vehicles which have now been introduced in many countries around the
world. Each country has its own rules, but the broad intention of REITs is to encourage investment in domestic property by
removing tax distortions for investors.
In the UK, REITs must meet certain on-going rules and regulations, including the requirement to distribute at least 90 per cent of
qualifying rental profits to shareholders. Withholding tax of 20 per cent is deducted from these Property Income Distributions (see
glossary). Profits from a REIT's non-property business remain subject to normal corporation tax. The Group elected for REIT
status in the UK 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.
Short-term lease
A lease with a term certain of less than five years.
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: 30/07/2015 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
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