EI Group’s (EIG) chief executive Simon Townsend admits the pub group has “more to do” in terms of its numbers reflecting its strategic momentum. Underlying cash profit was down from £292m in the previous financial year to £287m, but that was in line with expectations and largely due to disposals. More importantly, like-for-like income was up and net debt down. The increase in net assets from £1.45bn to £1.50bn allowed for a further £20m share buyback.
This was the first full financial year of the market rent only (MRO) option, which allows tied pub tenants to break that tie. From its implementation in July 2016 to the end of September 2017, there were 790 rent or agreement review ‘events’. Of those, 26 per cent of publicans made an MRO request, with just under half of those requests resulting in a new mutually agreed tied deal. A good chunk of the remaining will lead to free-of-tie deals. Despite the disruption, like-for-like net income growth at the 650 pubs still operated by the same publican was positive at 0.7 per cent; for the total estate, it was 2.3 per cent.
Analysts at Numis expect pre-tax profit of £121m for the year to September 2018, giving EPS of 21.8p (from £121m and 20.5p in FY2017).
EI GROUP (EIG) | ||||
ORD PRICE: | 134p | MARKET VALUE: | £646m | |
TOUCH: | 133.8-134.3p | 12-MONTH HIGH: | 150p | LOW: 103p |
DIVIDEND YIELD: | nil | PE RATIO: | 12 | |
NET ASSET VALUE: | 312p* | NET DEBT: | 140% |
Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2013 | 639 | -42 | -0.8 | nil |
2014 | 632 | 36 | 5.9 | nil |
2015 | 625 | -71 | -13.0 | nil |
2016 | 632 | 75 | 14.2 | nil |
2017 | 648 | 58 | 11.2 | nil |
% change | +3 | -23 | -21 | - |
Ex-div: | na | |||
Payment: | na | |||
*Includes intangible assets of £321m, or 67p a share |