Pub group Enterprise Inns has produced another torrid set of results with underlying pre-tax profits slumping 21 per cent to £208m and adjusted EPS down 22 per cent to 30.7p.
However, there were signs that trading, while still tough, has stabilised. The group reported that cash profit per pub fell 8 per cent in the 12 month period, which was no worse than what was reported at the half-year stage. What’s more, the group is beginning to reduce the number of pubs it operates on temporary management arrangements following the failure of tenants. The requirement for tenant support, which stood at £18m for the year, is beginning to recede and the rate of business failures, which cost £25m during the year, is abating.
The key concern at the moment is a £1bn refinancing of bank debt due in early 2011 although management says ongoing discussions with its banks and anticipated additional pub sales make it confident of its financial position. The annual revaluation of the pub estate showed a £400m fall in value last year, of which £122m was charged to profits as an exceptional item, reflecting pubs that had fallen below historic cost.
Broker KBC Peel Hunt forecasts adjusted pre-tax profits of £192m and EPS of 28p (2009: £208m/30.7p), but could downgrade these estimates.
| Enterprise Inns (ETI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 122p | MARKET VALUE: | £617m | |
| TOUCH: | 121-122p | 12-MONTH HIGH: | 193p | LOW: 31p |
| DIVIDEND YIELD: | nil | PE RATIO: | 102 | |
| NET ASSET VALUE: | 272p* | NET DEBT: | 268% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 952 | 275 | 30.5 | 9.0 |
| 2006 | 970 | 415 | 50.5 | 13.5 |
| 2007 | 921 | 337 | 54.3 | 15.6 |
| 2008 | 880 | 209 | 36.8 | 16.2 |
| 2009 | 818 | 11 | 1.2 | nil |
| % change | -7 | -95 | -97 | -100 |
*Includes intangibles of £424m, or 84p per share | ||||
