A somewhat drab performance by EI Group (EIG) - formerly Enterprise Inns - at the half-year mark, with operating profits down 5 per cent to £127m. Net income growth in the commercial property business slowed appreciably due to changes in estate composition. Needless to say, the group's financing commitments continue to weigh heavily on statutory earnings.
However, EI is now in transition mode. Following on from February's strategic re-focus, the group doesn't just want to manage pubs, it also wants to transform about 400 units of its estate into mixed-use commercial properties by the end of its financial year and it's well on the way to achieving this, with 304 pubs converted by midway through May. In addition, since the re-jigged Pubs Code, which allows pubs to break their beer ties with owners, came into effect last July, 499 of the group's 2,184 pubs have reviewed their agreements, with 171 asking for a 'market rent only' agreement quote.
Analysts at Stifel expect adjusted pre-tax profits of £123m for the year to September 2017, giving EPS of 18.9p, up from £122m and £18.3p in FY2016.
| EI GROUP (EIG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 148p | MARKET VALUE: | £713m | |
| TOUCH: | 147.75-148.25p | 12-MONTH HIGH: | 149.75p | LOW: 71.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | 15 | |
| NET ASSET VALUE: | 301p* | NET DEBT: | 150% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 305 | 40.0 | 6.6 | nil |
| 2017 | 310 | 13.0 | 2.1 | nil |
| % change | +2 | -68 | -68 | - |
Ex-div: na Payment: na *Includes intangible assets of £324m, or 67p a share | ||||
