Intu shares up as it reveals positive cash position, but rent intake to fall further

By

Barbara Santamaria

Published
Jun 3, 2020

Shares in shopping centre giant Intu rose by more than half on Tuesday and continued rising Wednesday after the company published figures suggesting its cash position will remain positive in 2021 if it secures an agreement with its lenders.

Intu has suffered a difficult period since the Covid-19 outbreak, with a decline in rental income forcing it to seek covenant waivers from its banks.

In an attempt to persuade creditors to waive its debt obligations, the property firm has forecast that its cash position would fall from £81.1 million at the start of the second half of 2020 to £24.1 million at the end of December.

The figure is then expected to rise to £62.6 million at the end of 2021 as the retail sector recovers from the impact of the coronavirus crisis, it revealed. But the share price rose as investors who had worried the firm wouldn't survive took heart.

In May, the group announced that it was seeking standstill agreements of up to 18 months on interest payments and covenant breaches. Described as “the best course of action” for the company at this time, the standstills would allow Intu to overcome the current market dislocation and offer some breathing space until the pandemic ends. 

Still, Intu is set to see rental income slump to £310 million this year from £491.6 million in 2019. The business is sitting on a £4 billion debt pile and facing a significant change in consumer behaviour post-Covid-19.

But management remains optimistic, outlining plans on how it will begin the gradual reopening of non-essential retail stores at its 14 UK shopping centres.

Individual plans have been drawn up for each centre with new social distancing and hygiene procedures in place.