Simon Townsend's arrival as chief executive doesn't seem to have rocked the recovery ship at pub company Enterprise Inns (ETI). Concerns mounted at the time of the annual results last November, when stalwart Ted Tuppen stepped down after more than 20 years at the helm. But the like-for-like growth record that restarted last summer after a half-decade hiatus continues under Mr Townsend - albeit helped by weak comparatives following the collapse of a wines and spirits distributor last year.
The company has continued to monitor its £2.5bn debt pile, selecting more sites to offload and keeping others to spruce up. But the strategy has shifted: most of the £42m disposal proceeds generated in the first half were reinvested into properties in need of a revamp rather than used to repay debt.
For some years the business has been shrinking as debt repayments have eaten up surplus cash, but now growing the estate is firmly back on the agenda. Mr Townsend told us "changing demographics" in Britain meant there couldn't be a "one size fits all" approach to reinvestment; refurbished pubs will cater to locally specific customer groups - a counter-intuitive example being teetotal Muslims in Bradford.
Broker Numis Securities expects flat pre-tax profits of £121m for 2014, giving EPS of 18.8p, down from 19p in 2013.
ENTERPRISE INNS (ETI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 148p | MARKET VALUE: | £749m | |
| TOUCH: | 148-148p | 12-MONTH HIGH: | 171p | LOW: 97p |
| DIVIDEND YIELD: | na | PE RATIO: | 93 | |
| NET ASSET VALUE: | 285p* | NET DEBT: | 174% | |
| Half-year to 31 March | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 312 | 29 | 5.0 | nil |
| 2014 | 308 | 47 | 7.4 | nil |
| % change | -1 | +62 | +48 | - |
Ex-div: na Payment: na *Includes intangible assets of £351m, or 69p a share | ||||
