Intu warns of potential collapse after £2billion loss
Today, Intu announced its annual losses nearly doubled to £2billion in 2019, due to a big decrease in the value of its shopping centres.
Revenue fell by 6% to £542.3m as tenant shops negotiated lower rents or simply fell into administration. Intu said the results are reflective of the "challenges in the market", but warn about the potential of collapse if there is no improvement.
The numbers come just a week after Intu was given no choice but to abandon fundraising due to “extreme market conditions.” The company had been looking to raise £1.5billion from shareholders to pay down its £4.4billon debt pile, representing 67% of its asset value.
Intu Chief Executive Matthew Roberts wrote in the report: “In the short term, fixing the balance sheet is our top priority. We have options including alternative capital structures and further disposals to provide liquidity, and will seek to negotiate covenant waivers where appropriate.”
Roberts was appointed to take the helm of the company in April 2019, and has since introduced a long-term five-year strategy.
Roberts added: "Looking in to 2020, we would expect like-for-like net rental income to be down, but by a lower amount than 2019. The Covid-19 situation is rapidly evolving and we are closely monitoring the impact on our centres. Our footfall is broadly unchanged for the first 10 weeks of 2020."
According to GlobalData, Intu owns 9 of the UK's most top-20 shopping centres, with an average 1 million people a day visit one of the company's centres. Intu Lakeside shopping centre announced last week that it is due to launch the first UK store dedicated entirely to fast-growing online fashion labels in June 2020.