Capco halts share buybacks due to Covid-19


Capco halts share buybacks due to Covid-19

Published Date: 2020-03-27 | Source: Stephen Gunnion | Author: Stephen Gunnion

Capco halts share buybacks due to Covid-19

The London property owner says it is conserving cash as it negotiates payment plans with tenants who are affected by trading restrictions.

Capital & Counties (Capco) says it has decided to temporarily suspend its share buyback programme due to highly uncertain market conditions brought on by the Covid-19 pandemic. With the majority of shops and restaurants in its Covent Garden property in London's West End closed due to trading restrictions in the UK, the landlord says its income is likely to be disrupted this year.

Capco had been using spare cash to repurchase its own shares, which companies often do when their stock is perceived as undervalued. However, it said it was focused on conserving cash given the uncertainty. It said its balance sheet remained strong, with access to substantial liquidity and significant headroom against its debt covenants. It has cash of about £250 million with a further £120 million to be received from the recent sale of its Earls Court development property. On top of that, it has access to over £700 million of committed undrawn facilities.

Although government support measures would help its tenants, it said it was working with them on a case-by-case basis to work out payment schedules, including moving from advance quarterly rental payments to alternative arrangements and the deferral of rental payments to ease short-term cash flow issues for smaller and independent operators.

Its shares closed 6.8% higher at R33.80 yesterday.

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