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Real-Time news about Enterprise Inns (London Stock Exchange): 0 recent articles
|scburbs: "We are upgrading our recommendation for Enterprise Inns to BUY from Hold and increasing our target price to 150p from 115p. The contested bid for Punch Taverns resulting in an agreed offer 40% above the undisturbed share price is a reminder of the latent value of the asset-intense pubcos in general and Enterprise Inns in particular."
Theoretically, maybe, but name me the 'pro' in this case please? ETI have been splashing the cash daily in the market since 1 April when the share price was over 96p. I don't know how much of their "spare" £25m they've spent, but how do you feel you've had 'value' from that? You could have had a 5p divi in your pocket, or ETI's net debt could have been reduced by that amount but you've had neither and you can now sell your shares for 86p. Result! (not). But so long as they can report a modest (and artificial) rise in eps and NAV, that's enough is it? Not for me.|
|jeffian: Huge Pants,
So they keep saying, but what good is that to you or I if we can only get 88p for our shares? If you think that's OK, you send me £1 tomorrow and I'll send you back 33p and call it all square, OK? If they can't get the share price somewhere near NAV or pay a dividend in the meantime, what's the point of their existence?|
|hugepants: The company claim 92% of the properties are "valued on an annual basis by external, independent valuers"
Our balance sheet remains strong with a total net asset value of £1.35 billion (2014: £1.40 billion). Gross property assets are the most significant assets in the balance sheet and are recorded at £3.7 billion (2014: £3.9 billion) of which 92% (2014: 47%) is valued on an annual basis by external, independent valuers. Group net debt includes the most significant liabilities in the balance sheet and has reduced to £2.3 billion (2014: £2.4 billion) during the year. The share price at 30 September 2015 of £1.08 (2014: £1.24), which equates to an equity value of £541 million, compares to a net asset value per share of £2.70 (2014: £2.80). The differential between net asset value and market value reflects current market sentiment but does not, we believe, reflect the underlying value of the Group.
Also loan to value is 63% which isn't too onerous.|
|jeffian: Well certainly something needs to be done. The present strategy is not delivering value for shareholders and even on completion of the re-structuring into a 3-strand business (Managed, Tenanted, Property Company) over the next 3 years, it is hard to see how it will. The share price tells you that the market isn't buying the 'story'. In the meantime, cash and shareholder value are being destroyed by the ill-conceived policies of using free cash to buy back shares and 're-investing' the proceeds of disposals in the estate. (On the latter point, last year they realised £75m from disposals and 're-invested' £69m into the estate........before writing off £163m on re-valuation. They plan to 'reinvest' all the proceeds of sales this year too. I wonder what the write-off will be? Pouf! There goes the cash in a puff of smoke.)|
|jeffian: If they're no mugs, they're certainly taking their shareholders for one. Where is this getting us? £25m up the swannee and nothing to show for it. Share price lower than when we started and no dividend. "...a clear path to maximising shareholder value......a returns-based approach to the allocation of available capital"? My @rse!|
|jeffian: You sound like management, HP! The NAV has been over 280p for years and where has that got us?! Shareholders can't access "NAV", they can only receive a divi or sell their shares (currently 94p vs 96p when this ill-fated buyback started). If management are relying on "NAV", but can't deliver it in terms of the share price then, as I pointed out at the last AGM, the obvious solution is to liquidate the company and return cash to shareholders.|
You miss my point entirely. I quite understand the principle that reducing the shares in issue raised both NAV and eps but if this is not reflected in the share price it is a completely ineffectual way of "returning surplus cash" to shareholders. Even before the current buybacks, the company have been bleating for years that their NAV is nearly £3 and what good has that done the share price for the past few years? Precisely nothing. Remember, they have form, having spent nearly £1bn buying shares up to nearly £8. Where's that cash now? Up the Swanee. I repeat my question - they're spending £25m of our "surplus" cash this year. Does any shareholder feel they have received that value? As for Brexit, see my comments above. You,re joking. The shares have been languishing for years and, other than the very short term volatility that affected the whole market for a day or two, they're back in they're normal range.|
|jeffian: Well this is going well isn't it?! Since the announcement of the share buyback scheme on 22 March -
£25m (enough for a 5p dividend) "returned to shareholders" eh? Any shareholders here received any "value"? Feel the benefit of the rise in underlying NAV? No, nor do I. It will be no good moaning about Brexit or whatever (and the share price was going nowhere before that outcome), this is a lesson for the Board that they do not control the share price, the market does. They should focus on the things which are under their direct control - revenues, profits, cashflow and dividends - and let the share price take care of itself.|
|jeffian: I'm hopping mad. I've had several meetings with Simon Townsend and he knows my views on this matter. If they had £25m free cashflow, that would have paid for a 5p dividend which would have supported the share price and genuinely "returned value to shareholders". As it is, they're going to blow it on repurchasing their shares which, of course, artificially enhances eps and NAV per share (a metric for their bonuses?) but does not in any way give value to shareholders who have had 8 years without a dividend and negative Total Shareholder Return.
They say they are restructuring the company. What they need to give shareholders is a vision of how they will be rewarded down the line. They keep saying that NAV is 280p/share but we can only sell our shares today for under £1. What's the vision? How are they going to get that value to us? At the last AGM I pointed out that if it took 5 years to get back to NAV or close to it, they might as well liquidate now and give us our money back. As you can imagine, that went down like a lead balloon.
I have no doubt that the company has good management and they are doing their best in difficult circumstances, but I'm not sure they are focussed on shareholder value. I think they are looking at firefighting, keeping their bondholders happy and keeping their own jobs.|
Enterprise Inns share price data is direct from the London Stock Exchange