All of intu’s centres in the UK and Spain are operating on a semi-closed basis. In line with the latest Government advice in both countries, only essential stores, such as supermarkets, pharmacies and banks, remain open.
Rent for the second quarter of the year in the UK was due on 25 March (the quarter day) and intus has received 29 per cent of this. Intu is in discussions with their customers on the outstanding rents. For the same period last year, they had received 77 per cent on the quarter day.
As at 24 March 2020, intu had immediately available cash and facilities of £184 million at the corporate level. The impact of COVID-19 in Europe is delaying certain regulatory approvals in relation to the disposal of intu Puerto Venecia and intu now expects the £95 million proceeds to be received in the middle of May at the earliest.
Intu has significantly reduced capital expenditure for the foreseeable future and is cutting back on head office costs to maintain additional cash within the business. In addition, to support their customers, they have initiated a programme of reducing non-essential service charge costs and are passing on these savings to them.
The reduced social activity is likely to continue for the foreseeable future impacting intu’s footfall and potential future rents. The impact of the reduced rents received is expected to require them to seek covenant waivers and they are in constructive discussions with the relevant lenders.
In addition to the immediate actions intu has taken to preserve liquidity, they 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.
Given the ongoing uncertainty around COVID-19, intu is no longer able to provide guidance in relation to the 2020 financial year.
In these difficult times intu continues to assess all strategic alternatives and will provide further updates as appropriate.