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Share Name Share Symbol Market Type Share ISIN Share Description
EI Grp LSE:EIG London Ordinary Share GB00B1L8B624 ORD 2.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +4.00p +1.98% 206.50p 207.00p 207.50p 207.50p 202.50p 203.50p 1,930,417 16:35:08
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Travel & Leisure 695.0 87.0 15.2 13.6 945.36

EI Grp Share Discussion Threads

Showing 26 to 47 of 50 messages
Chat Pages: 2  1
DateSubjectAuthorDiscuss
18/1/2019
17:28
Jeffian, agreed; it is all about that sweet spot. It’s good to see the company starting to make some progress anyway. Perhaps the strategy wasn’t so daft after all. The share price has had a good run. I wonder if it will hold on when the buyback ends (I think it is about 90% complete).
leading
18/1/2019
11:29
Returning to leaving's comments about debt, and particularly #30 above, I drew attention to the securitised bonds. Of the total £2bn current net debt, around £900m is in the form of securitised debt which is being amortised (payments of income plus capital like a repayment mortgage) over a period up to 2032. There are around £1,275bn corporate bonds for fixed terms expiring 2021-2031 which will need to be repaid or refinanced as they mature. (The difference between those figures and net debt is made up of £158m net cash). leading applies the full £348m disposal proceeds to debt repayment (although I doubt they will use it all this way) to produce a net debt of £1.69bn which he says is still too high. I think EIG management would point out that £900m of that will be amortised away by 2032 anyway. The thing about disposals is that the asset being disposed of is likely to produce more than the cost of capital, so whilst you may be reducing your net debt, you are reducing your income even more. The corporate bonds are at rates from 6-7.5% with an average of 6.52%. The package of commercial properties being sold produced 7.7% roc. The pubs are likely to produce considerably more. The '5-year plan' introduced 3 years ago always envisaged that earnings would be flat (higher earnings-per-pub but from less pubs) and this disposal exacerbates that. They are shrinking the company and one can see why they love share buybacks as the only way to increase earnings per share from flat overall earnings. The trick is to find the 'sweet spot' at which the market accepts the debt is sustainable and the company can start to grow earnings again, or carry on down the shrinkage route and maybe carry out an effective liquidation of the assets over time, returning surplus capital to shareholders as they go.
jeffian
11/1/2019
13:14
Was it (7.5%)? I think the average rate across all their borrowings is +/-6.25%? The point about the bonds is that they are secure and fixed. ETI/EIG's darkest hour came when the banks got their teeth into them and it was a conscious decision to pay off all cheap bank debt rather than the more expensive bonds because of the onerous terms imposed by the banks. I can't see them putting themselves back into that position, however cheap the rates. I've got to go out now but I'll have a look at the amortisation profile later and remind myself (and post) where they are headed on debt long term.
jeffian
11/1/2019
12:00
Yes, but earnings would be favourably impacted if they could borrow at lower rates. My hypothesis is that they could borrow at lower rates if they were not so highly geared. I think the recent corporate bond carried a coupon of 7.5%. Segro's weighted average cost of debt for example was 2.3% at 31/12/17 on a LTV of 30%.
leading
11/1/2019
10:28
Good to see this disposal today. The proceeds already seem to be burning a hole in the management's pocket. Just pay down debt. Net debt at 30/9/18 was £2,038m less £348m proceeds gives £1,690m or about 52.5% LTV against 56% at 30/9/18 I think. This also meets their "medium term" target of net debt = 6 times EBITDA. (287m X 6 = £1,722m). Debt is still too high and leaves little room for error IMV. Share price is re-rating and will continue to do so as the Balance Sheet is knocked into shape. So, use any excess to buy back the bond due in 2021 and save us from another exceptional charge for rolling it over.
leading
03/1/2019
09:54
Appears to be flying below the radar at the moment. Strong share price performance in a difficult market.
jeffian
20/12/2018
11:34
Surprisingly strong in such a dire market. The share buyback scheme must help but it can't be that alone. I suspect it is to do with the potential sale of the commercial property portfolio, mentioned again in last weekend's financial press saying there were 'competing' bidders and talking about £350m. I'm more interested in what they will do with the proceeds if it ever happens! Their judgement in this area hasn't been great - spending a fortune buying bonds well above par just to reissue a similar bond with a slightly longer redemption date; "reinvesting" in the estate whilst writing off huge sums on annual revaluation etc - so we'll have to see what happens.
jeffian
08/12/2018
23:37
I still have a load of the 2031 Bonds in my SIPP having traded through the 2018, 2021, and 2025 Bonds (all bought below par). I also still hold a shedload of the Ordinary shares which may sound great over the past few years........but they're the same ones I held when they were £8!
jeffian
08/12/2018
23:19
Have just said rather a painful good bye to the 2018 bonds having had them since April 2009. I have not held the shares for 2/3 years and not really followed the price recently and was surprised to see them so strong; very well done to those who had more patience than me and held on to the shares.
cerrito
20/11/2018
23:50
I think a lot of "the relaxed approach to reducing debt levels" stems from the fact that a substantial proportion of their securitised debt is self-amortising (i.e. it will be paid off over the term of the loan like a mortgage).
jeffian
02/11/2018
09:58
I suppose this may have something to do with it, though I don't rate Brokers' Notes myself. "WEDNESDAY BROKER ROUND-UP (Sharecast News) - Auto Trader: UBS upgrades to buy with a target price of 445p. EI Group: Berenberg initiates at buy with a target price of 200p."
jeffian
01/11/2018
09:31
Hmmm. Unusually strong opening. I wonder if that signifies some news about the proposed sale of the commercial property portfolio?
jeffian
29/9/2018
14:08
EIG was promoted to the FTSE 250 index yesterday. This accounts for the large uncrossing in Thursday's (27 Sep) closing auction - about 2% of market cap.
typo56
14/9/2018
18:16
Well the continued upward momentum seems to have followed the update on 6/9 so the market must have liked it (helped, not doubt, by reasonable updates from other pub operators) but I can't quite get my mind round their bond management activities. A couple of years ago they spent over £25m buying back part of the 2018 bond at substantially over par then reissuing a new slug at the same rate maturing only a few years later. Today they announce that they're buying back nearly £100m of the convertible Bond due 2020 at 107% whilst issuing another £150m of unsecured Bonds, so that's another £7m cash gone there. I could understand if the new bonds achieved a significant interest saving, but that doesn't seem to be so, we're just blowing cash to kick the redemption a few years down the road. If they do go ahead with the £300m commercial property portfolio sale, the big issue will be, what will they do with the proceeds?
jeffian
06/9/2018
15:17
Up 5%. Just another 22% to go to reach my target of £2
profitaker
06/9/2018
14:41
Well that's interesting. I wonder what inspired them to come out with a Trading Update when they said they weren't going to issue them any more (other than AGM). Hasn't done the share price any harm.
jeffian
22/8/2018
11:17
Tipped on UK Investor: Https://uk-investor.com/2018/08/22/uk-pubs-value-play-or-value-trap/
spmc
22/6/2018
13:52
"if they can buy an asset for £1.50 which has a tangible NAV of £2.48 then what's not to like ?" Other than that it isn't worth £2.48 to you and me if we can't realise it?! They've been living off the "NAV" story for years but until the share price gets anywhere near it, it's just a figment of the accountants' imagination. Over the past few years, EIG have sold £100m's of pubs. Let's say they get NAV for the sales; for every £1 received, they could distribute it to shareholders via a dividend or return of capital (worth £1/£1 in the shareholder's hand) or they could pay down debt (NAV neutral but maybe good for sentiment and thus share price rating) but they choose to "reinvest" it in the estate (look at the annual property write-downs to see how solid that 'value' is!) or buy their own shares which immediately makes that £1 of hard cash worth just 60p in the shareholder's hand (150/248%). If they distributed to shareholders, there would be nothing to stop you piling in and buying more 'discounted' shares, but at least we would have the choice. Their sole strategy is to seek to 'improve the quality' of the estate and hope that the market rates their shares at something close to the underlying NAV but time and again I have repeated the mantra that Directors/Management do not control the share price, only the market does that, and the management should concentrate on the levers they can and do control - revenues, profits, dividends - and if they improve those, the share price will follow in due course. In fact, all those KPI's have been flat for years - and are projected to remain so through to the end of the "5-year plan" in 2020 so with flat earnings and no dividend for 12 years, how exactly is 'shareholder value' being realised?
jeffian
22/6/2018
09:57
Agree all your points jeffian. However, for me the share buybacks make sense - if they can buy an asset for £1.50 which has a tangible NAV of £2.48 then what's not to like ? It's not the best scenario for shareholders but it's better than sitting on a pile of cash doing nothing. I'm sitting tight.
profitaker
22/6/2018
09:25
Well I wish it would (though hopefully not at the same discount to NAV as Punch accepted). The depressing thing about the great "5-year plan" (2015-2020) is that their own projections at the outset indicated revenues and profits at the end of the period very little above what they were at the beginning, albeit higher income-per-pub but from less pubs (and with the proceeds from those sold "reinvested"). Maybe that's why they have an obsession about share buybacks, to make the eps look better even though profits will remain flat? I can't bring myself to sell at such a huge discount to NAV but any offer close and I think most would grab it with both hands. If it's not close (and assuming the stated NAV is a realisable value), then it begs the question (which I have asked at several recent AGM's!) why not sell down the assets, pay off the debt and return capital to shareholders?
jeffian
22/6/2018
08:36
I can see this going the same way as Punch. The possibility is always there (though not from Heineken) which will help the share price Even at £2 it's still a thumping discount to TNAV.
profitaker
20/6/2018
08:43
Well it seems remarkably perky at the moment in a difficult market so perhaps something is stirring. On the verge of new high. However, just to get this in perspective, this is where we've been since the announcement of the infamous 'strategy review' on 12/5/15 so no cause for great celebration yet -
jeffian
Chat Pages: 2  1
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