Intu Properties, INTU, Still Bust, Still Valueless

Trade Intu Shares Your Capital Is At Risk
Tim Worstall
Updated: 25 Apr 2022

Key points:

Intu Properties (LON: INTU) shares are valueless and have been for some time now, Since 2020, in fact, when the company plunged into administration. There’s not going to be – even at the end of the long administration process – full recovery for creditors, meaning that there’s certainly no value for equity.

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There is a little bit of possible confusion here, though. There are two companies that do, or at least did, share the ticker INTU. There’s this one, Intu Properties, in London. But the same ticker is also used in the US for Intuit (NASDAQ: INTU), and that’s a very different company continuing to do well.

The confusion comes from the fact that the AI and algos used to drive search engines don’t, in fact, know the difference between INYU and INTU – it requires that addition of human intelligence to make the differentiation.

This means that sometimes we do get headlines about the INTU price moving and it’s possible to think that there’s some revival of Intu Properties – which isn’t what is happening.

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As to what did happen, let’s leave the US software company aside and concentrate upon London. It’s possible to tell a variety of stories but the underlying economic basics are that we all started shopping on the internet. This makes commercial retail space worth less, clearly and obviously. There’s long been a close connection between the percentage of retail sales happening online and vacancy rates. Rents follow these downwards as vacancies rise – normal supply and demand.

The thing is, the British commercial retail companies had a capital structure that largely ignored this possibility. There was some equity in there, but this was underpinned by substantial debt loads. So, as building values fell, they did not become worth nothing of course. But they could – and at Intu did – fall enough that the corporate equity was wiped out, and the buildings were worth less than the debt load.

This wasn’t driven by lockdown, this was a structural change across the economy. Intu’s problem was that the full realisation coincided with lockdown, and no one was willing to refinance. Lockdown retailers not paying their rents just wasn’t a helpful situation in which to try and refinance a commercial retail property owner after all.

So, Intu Properties is in administration and barring something truly remarkable there’s going to be no return to shareholders. That’s why the quotation is suspended and has been this past couple of years.

Anyone who actually has any Intu Properties shares their value now is really as proof of a capital gains tax loss and it’s worth speaking to an accountant about that. In terms of what can be traded, or sold for, really, just no.

As up at the top the occasional revival of talk about values and price changes in INTU is about the entirely different and completely unconnected Intuit, not Intu Properties. That latter is now long gone.

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