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Trafford Centre-owner loses £2bn and warns on future

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Debenhams store at the Trafford Centre in Manchester, England. (Anthony Devlin/Getty Images)

Intu (INTU.L), the shopping centre group behind Manchester’s Trafford Centre, fell to a £2bn ($2.5bn) loss last year as the value of its properties plummeted.

Under pressure Intu said on Thursday annual losses near doubled to £2bn in 2019, due to a big write down in the value of its shopping centres. Revenue fell by 6% to £542.3m as tenant shops negotiated lower rents or fell into administration.

“Our results are evidence of the challenges in our market, in particular structural changes ongoing in the retail sector,” Intu chief executive Matthew Roberts wrote in the report.

The numbers come just a week after Intu was forced to abandoned an emergency fundraising due to “extreme market conditions.” The company had been looking to raise £1.5bn from shareholders to pay down its £4.4bn debt pile, which represents 67% of its asset value.

The failure to raise cash has left Intu’s future hanging in the balance. The company said in Thursday’s accounts there is a risk of going bust if it can’t refinance its debt and asset values and rents continue to decline.

“In the short term, fixing the balance sheet is our top priority,” Roberts wrote. “We have options including alternative capital structures and further disposals to provide liquidity, and will seek to negotiate covenant waivers where appropriate.”

However, Roberts warned that rents and asset values were likely to continue to fall this year.

Intu said it was too early to predict the impact of COVID-19 on its business, but said the number of visitors to its centres has been broadly stable so far this year.

“We are focusing all our energies on moving the business forward,” Roberts wrote.

Intu’s share price has halved over the last week since the fundraising was pulled. Trading in the stock was volatile on Thursday morning — it rose 8.7% in early trade but was down 11.6% almost an hour into the session.

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