Embattled retail landlord Intu raised doubts over its ability to continue as a going concern this morning as it reported a sharp increase in losses last year amid store closures and rent reductions.
Shares plunged 16 per cent this morning as the company reported a £2.02bn loss for the year, compared to a loss of £1.7bn the previous year as the landlord’s property revaluation deficit increased.
Revenue plummeted from £581.1m to £542.3m, due to tenants’ company voluntary arrangements and administrations.
The value of Intu’s investment and development profit plunged from £9.16bn to £6.63bn, while its leasing numbers fell from 248 to 205.
Its debt to assets ratio increased to 65 per cent.
Intu will not pay out a dividend for 2019, after issuing a 4.6p dividend in 2018.
Why it is interesting
Intu has been offloading properties in a bid to fix its debt heavy balance sheet. However, today it reported that its debt to assets ratio increased to 65 per cent.
The shopping centre owner, which owns Manchester’s Trafford Centre, was forced to abandon a planned £1bn equity raise earlier this month.
Notes in the company’s financial statements indicate an uncertainty in Intu’s ability to continue as a going concern. However today the company said it has other options including alternative capital structures and asset disposals.
The landlord has suffered as its tenants struggle in the tough retail environment.
Like-for-like rental income fell 9.1 per cent in 2019, with half the change attributable to retailer restructurings and administration processes.
What Intu said
Intu chief executive Matthew Roberts said: “ 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.”