Analysts characterised this set of half-year from pub group Ei (EIG) as “very robust”, which may seem hyperbolic given flat underlying cash profits and a marginal increase in like-for-like net income for the total estate. Management cited "weather-related disruption", an all too familiar refrain from the pubco's, somewhat belied by 6.6 per cent sales growth in its managed premises. The group now expects to have around 365 managed sites by the end of FY2018, down on early estimates, and reflective of a slower-than-anticipated take-up under the market rent only (free-of-tie) option.
The overhaul of the portfolio drags on, but with £101m in corporate bonds due for redemption in December, attention may turn to the balance sheet. The group has sufficient cash resources and/or finance facilities in place to cover the obligation, but we wonder if the group will eventually need to increase its cash buffer given the scale of its long-term commitments. The good news is that there no indications that the £3.62bn in property assets are likely to be negatively revalued this year.
Analysts at Numis expect pre-tax profit of £122m in the year to September 2018, giving EPS of 19.3p, compared with £121m and 19.5p in FY2017.
| EI GROUP (EIG) | ||||
| ORD PRICE: | 128.6p | MARKET VALUE: | £600m | |
| TOUCH: | 128.6-128.8p | 12-MONTH HIGH: | 153p | LOW: 114p |
| DIVIDEND YIELD: | nil | PE RATIO: | 11 | |
| NET ASSET VALUE: | 326p* | NET DEBT: | 137% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 310 | 13.0 | 2.1 | nil |
| 2018 | 330 | 45.0 | 7.9 | nil |
| % change | +6 | +246 | +276 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £317m, or 68p a share | ||||
