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intu Lakeside

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Shopping centres operator Intu (INTU) said it had received barely 29% of UK rent due for the second quarter of the year, compared to 77% at this time last year.

The company added it was in discussions with retailers operating within its centres regarding the outstanding rents. 

Intu’s centres in the UK and Spain are currently operating on a semi-closed basis, with just essential stores such as supermarkets, pharmacies and banks remaining open in line with government advice. 

“The reduced social activity is likely to continue for the foreseeable future impacting our footfall and potential future rents,” the company said.

“The impact of the reduced rents received is expected to require us to seek covenant waivers and we are in constructive discussions with the relevant lenders.”

As at this week, Intu had immediately available cash and facilities of £184m. However, the impact of the coronavirus in Europe was causing delays in obtaining regulatory approvals for the disposal of intu Puerto Venecia and the company now expect to receive the £95m proceeds in the middle of May at the earliest.

To maintain additional cash within the business, Intu had “significantly” reduced capital expenditure and was cutting back on head office costs.

Furthermore, the business said it was in conversation with the UK government to potentially access their £330bn support package.

“In their (the government’s) 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,” Intu said.

Intu shares opened down 1.4% at 3.99p.

Morning update

French retail group Casino has reported annual profit growth of 5.5% to €1.3bn. 

For 2019, Casino sales were up 4.2% on an organic basis at €34.6bn, driven by a strong increase in ecommerce and Latin America.

In France, sales were up 0.3% on a same-store basis, while e-commerce gross merchandise volume came to €4bn, a year-on-year increase of 9.1% on an organic basis, led by the expansion of the marketplace.

Sales in Latin America were up sharply by 9.7% on an organic basis, mainly supported by the very good performance in the Cash & Carry segment, which recorded organic growth of 22%.

For 2020 and in light of the coronavirus outbreak, the company said it was “fully committed” to secure the supply of populations, while ensuring the protection of employees and clients.

“The group’s strengths (convenience, E-commerce, automatic payment solutions) are being deployed to meet customers’ needs in the safest possible manner,” it added.

“The group will pursue the accelerated adaptation of its operating processes and the development of new offers responding to the current unprecedented situation.”

Casino’s first priority in dealing with the virus spread was to implement the necessary safety measures to protect employees and shoppers, such as distributing of face masks and hydro-alcoholic gels, installing plexiglass screens at check-outs, respecting social distancing measures between clients and promoting automatic payment solutions.

Like other food retailers, the group said it had been faced with “unprecedented demand” both in store and online. It set up a crisis management unit to be in “continuous contact” with suppliers and public authorities to ensure supply chain continuity and to secure operations in the stores.

New figures released by the Office for National Statistics revealed retail sales have continued to fall in February, impacted by bad weather and intense flooding. 

Sales volumes for the month of February fell 0.3% on January while they were down 0.5% in value. 

Furthermore, in the three months to February 2020, both the amount spent and the quantity bought in the retail industry fell by 0.1% and 0.6% respectively when compared with the previous three months.

ONS head of retail sales Rhian Murphy said: “Retail sales continued to decline in the latest three months due to weak sales across most store types, with February’s bad weather and flooding impacting on footfall.

“A small number of retailers also said that the impact of the coronavirus had affected sales of goods shipped from China.”

DS Smith (SMDS) finance director Adrian Marsh, who was due to leave the packaging company to join William Hill, has informed the board he will not be leaving any more. 

The company agreed to treat his resignation as withdrawn and Marsh will continue in his role. 

CEO Miles Roberts said: “We are pleased that Adrian will be remaining with DS Smith, providing continuity and stability in this very important time.”

DS Smith shares opened down 1.3% at 275.53p.

The Financial Conduct Authority has granted listed companies affected by the coronavirus outbreak an additional two months to publish their accounts.

Currently companies have four months from their financial year end in which to publish audited financial statements. Under the temporary relief, they will now have six to ensure all auditing procedures can take place.

“Companies and their auditors currently face unprecedented challenges in preparing audited financial information as a result of the coronavirus pandemic,” the FCA said.

“The coronavirus pandemic is causing companies of all types to significantly adjust their business and operations. Financial reporting is important, and the practical challenges of completing financial statements during the coronavirus pandemic are significant. Companies and auditors should be granted time.”

The FTSE 100 opened in the red, falling 2.6% to 5,538.78pts.

Fallers included all supermarkets, with Tesco (TSCO) down 1.7% to 217.80p, Ocado (OCDO) down 3.7% to 1,195p, Marks & Spencer (MKS) down 4.6% to 105.50p, Sainsbury’s (SBRY) down 1.7% to 198.20p and Morrisons (MRW) down 1.8% to 170.50p.

Early risers saw Stock Spirits group (STOK) up 3% at 164.80p, Greggs (GRG) up 1.3% at 1,582p and Greencore (GNC) up 1.1% at 163.65p.

Yesterday in the City 

The FTSE 100 closed in the positive territory, up 3.5% at 5,634.67pts.

SSP Group (SSPG) closed 20% higher at 283.50p after publishing a trading update in the morning, Greggs (GRG) ended the day up 8.9% at 1,584p, Cranswick (CWK) rose 9.9% to 3,634p.

Marks & Spencer (MKS) closed 12% higher at 11.65p while Diageo (DGE) was up 4.2% to 2,497.50p and Associated British Foods (ABF) up 13% to 1,821.50p.

Fallers saw Coca Cola HBC (CCH) down 3.2% to 1,743p, Domino’s Pizza Group (DOM) down 2.7% at 270.50p and Applegreen (APGN) down 4% to 215p.