Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We use cookies to personalise your experience; learn more in our Privacy and Cookie Policy. You can opt out of some cookies by adjusting your browser settings; see the cookie policy for details. By using this site, you agree to our use of cookies.

Intu in peril after £2bn loss

Shopping centre owner Intu Properties has warned it is at risk of going under after reporting a £2bn loss for the year to 31 December 2019. 

Losses deepened from £1.2bn in 2018, and the the group wrote down the value of its shopping centre portfolio by £1.98bn.

The owner of Intu Trafford Centre in Manchester and Intu Metrocentre in Gateshead said in its financial statement that the loss “indicates a material uncertainty in relation to Intu’s ability to continue as a going concern”. 

Net rental income was down by 9.1% to £401.6m compared with 2018. 

Intu has been hit hard by the onslaught of company voluntary arrangements in the retail sector. However, it said it has a “range of options” to reverse its fortunes, including asset disposals, debt refinancing, and renegotiating with lenders to seek waivers or amendments to upcoming financial covenants. 

The landlord announced earlier this month that it had been unable to raise between £1bn and £1.5bn of new equity to fix its balance sheet, meaning it had failed to meet the criteria set by banks to receive a four-year revolving credit facility of £440m. Intu is now at risk of breaching certain debt covenants in July 2020.

Property experts told Drapers ahead of today’s results that Intu’s future ”hangs in the balance”. 

Chief executive Matthew Roberts, who took over last April and launched a five-year strategy for the landlord said: “The store is not dying – it is evolving. We own many of the best shopping centre locations in the UK. In a world where it is harder for retailers to increase profits, our centres offer them the best opportunity and many, such as Next, Primark and JD Sports, are thriving.

”In the short term, fixing the balance sheet is our top priority. The notes accompanying these financial statements indicate a material uncertainty in relation to Intu’s ability to continue as a going concern. However, we have options including alternative capital structures and further disposals to provide liquidity, and will seek to negotiate covenant waivers where appropriate.” 

 

 

Tags

Readers' comments (1)

  • Intu have a dying format and are paying the price for lack of foresight.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.