Intu retailers fail to pay on quarter day
The struggling Trafford Centre owner said in a statement today that it is taking “immediate actions” to “preserve liquidity” and is considering tapping taxpayers’ funds through the £330bn support programme launched by the Chancellor.
Intu told shareholders it received 29% of quarterly rents due on 25 March. Last year 77% paid on the same day. The group is in discussions with customers on the outstanding rents.
Two weeks ago Intu posted a £2bn loss for 2019, and was forced to abandon a £1bn equity raise due to a lack of interest.
The statement read: “The reduced social activity is likely to continue for the foreseeable future impacting our footfall and potential future rents. The impact of the reduced rents received is expected to require us to seek covenant waivers and we are in constructive discussions with the relevant lenders.”
The company continued: “In addition to the immediate actions we have taken to preserve liquidity, we have an ongoing dialogue with the UK Government and may look to access their £330 billion support package. In their recent announcement for the protection of commercial tenants from the non-payment of rent, they also stated that they are actively monitoring the impact of this on commercial landlords’ cash flow. Other Government measures announced of business rates suspension, employee cost support and tax payment deferrals, are also expected to have a positive impact.”
Intu said it has “significantly reduced capital expenditure for the foreseeable future” and is “cutting back on head office costs to maintain additional cash within the business.” A programme of reducing “non-essential service charge costs” has begun and savings will be passed on to customers.
As of 24 March, Intu had £184m in available cash and facilities at corporate level. The company reported that the impact of coronavirus in Europe has led to the delay of its sale of Intu Puerto Venecia in Zaragoza, Spain and that it expects the £95m from the sale to be received by the middle of May at the earliest.
Intu has semi-closed its centres in the UK and Spain in line with Government advice. Only essential stores such as banks and food retailers remain open.
Due to the coronavirus, the company has said it is now no longer able to provide guidance in relation to the 2020 financial year. Intu said its three priorities are to look after its employees, protect its business, and play its role in society.
Concluding, Intu said: “In these difficult times we continue to assess all strategic alternatives and will provide further updates as appropriate.”
Shares in the business are trading at around 4p, valuing Intu at £55m. Peel founder and chairman John Whittaker is the largest shareholder in Intu.