Intu flags ‘going concern’ doubt as losses hit £2bn

Trafford Centre

Troubled shopping centre operator Intu Properties plc on Thursday flagged “a material uncertainty” about its ability to “continue as a going concern” as it reported a £2 billion loss for 2019.

The news casts doubt on the future of Intu, which runs Manchester’s Trafford Centre and Arndale Centre, Newcastle’s Eldon Square, Gateshead’s Metrocentre and Glasgow’s Braehead.

The news sent shares of Intu down another 16% to around 4.8p. The firm’s shares have collapsed from around 111p a year ago.

In its outlook, Intu said: “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.

“For UK valuations, we would expect some further downward pressure in 2020, although we believe the decline in values in the second half of 2019 from the impact of yield and ERV movements suggests an acceleration towards the point where we believe valuations should start to stabilise.

“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.

“These would address potential covenant remedies and the upcoming refinancing activities, with the first material debt maturities in early 2021.

“We are focusing all our energies on moving the business forward.

“We own many of the best shopping centre locations in the UK, with dedicated staff looking after our visitors who are coming to our centres in the same numbers and like intu more than ever.

“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.

“But we cannot stand still, and as we have always done, we will focus on placemaking, curating our space to ensure it remains the place visitors love to be.”