Enterprise Inns Share Discussion Threads

[jeffian] 30/9/2009 01:14

Not much. On the positive side, they say the Board sees no need for a Rights Issue and has no current intention of having one. Everything else pretty flat - some signs of trade stabilising but too early to call bottom. Said that there was some evidence of pub values stabilising but that the trend in H2 had followed that in H1 (-3.5% / £195m) and that one could assume -7/8% for the full year (that equates to max £475m of which most will be offset against a historic revaluation reserve of around £1.2bn). Positive on bank refinancing next year. Positive on submissions to OFT about the tie but couldn't predict the outcome.

[masurenguy] 29/9/2009 19:33

Is there any feedback from todays conference call ?

[5dally] 29/9/2009 07:47

Enterprise Inns Trading Statement





TIDMETI

RNS Number : 7986Z
Enterprise Inns PLC
29 September 2009

?
29th September 2009
Enterprise Inns plc


Pre close statement


Enterprise Inns plc (ETI), which will be announcing its preliminary results for
the year ending 30th September 2009 on 17th November 2009, provides an update on
trading.


Trading performance


There has been no material change in the trading performance of the ETI business
since the Interim Management Statement published on 16th July 2009. The core
estate continues to demonstrate resilience in challenging trading conditions
although overall profitability remains affected by the ongoing costs of
discretionary financial support given to struggling licensees, business failures
and temporary management agreements.


It is however encouraging that, thanks to our successful programme of disposing
of less viable pubs, together with some stabilisation in beer volumes, reports
of improving food sales and an abatement of cost pressures on licensees, we are
beginning to see the rate of business failures slowing and the requirements for
financial support under our Business Recovery Initiative reducing. The number of
closed pubs (excluding pubs closed pending disposal) currently stands at just
90.


Pub estate


We own the freehold of 98% of our pubs, have just 181 short leaseholds and pay
an annual leasehold rent of just GBP2.6 million.The pub estate is independently
valued annually at 30 September and we expect there to be small reduction in
overall values, continuing the trend of the interim revaluation reported at 31
March 2009. We are encouraged that many valuers are saying that pub values may
now be stabilising and that demand for good quality assets is increasing.


During the year, we have successfully disposed of 365 pubs, all but a handful
being poorer quality outlets which we do not consider to have a viable future in
the ETI estate. In the year to September 2008, net income from these pubs
amounted to GBP9 million and net proceeds of GBP103 million, after taking
account of all costs of closure and disposal, are in line with book value. We
expect to continue this disposal programme throughout the coming year.


Financing


ETI has a flexible financing structure comprising securitised bonds, corporate
bonds and bank syndicated debt. The GBP1.6 billion securitised bonds amortise
over 22 years and attract a fixed rate of interest of approximately 6.5% until
final maturity. ETI is currently GBP64 million ahead of the amortisation
schedule. The GBP1.2 billion corporate bonds are non-amortising and attract a
fixed rate of interest of approximately 6.5%. The next scheduled maturities are
GBP60 million in February 2014 and GBP600 million in March 2018. The bank
syndicated facility of GBP1 billion currently pays interest at 80 basis points
over LIBOR and is due for renewal in May 2011. We have maintained an ongoing
dialogue with our advisers and the members of our banking syndicate and remain
confident that adequate debt facilities will be available at the time of our
refinancing, which we expect to take place before the end of the next financial
year.


Regulatory issues


In May this year, the Business and Enterprise Select Committee (BEC) published a
report on pub companies to which we have responded in detail. Our response to
this report made clear that we considered many of its conclusions ill-informed
and based upon hearsay rather than evidence.


At the same time, we wrote to the Secretary of State setting out a
thirteen-point plan which specified key commitments which we considered would
clarify and improve the relationship between pub companies and their licensees.
We have made good progress implementing this plan and have worked with others in
the industry to ensure that real and effective action has a positive impact at
the earliest possible time.


On 23 July 2009, the Campaign for Real Ale (CAMRA) issued a super-complaint to
the Office of Fair Trading (OFT), referring to the conclusions of the BEC report
and expressing various concerns including, among other things that the existence
of the beer tie operated for many years across the brewing and pubs industry,
was harmful to consumers.


We have cooperated fully with the OFT investigation, providing evidence-based
answers to the various questions that were raised. We understand that the OFT
will be in a position to respond to the CAMRA super-complaint towards the end of
October 2009.


Enquiries:


Tulchan Communications, Andrew Honnor/ Mal Patel 0207 353 4200
Ted Tuppen, Chief Executive 0121 733 7700
David George, Chief Financial Officer 0121 733 7700
Emma Baines, Investor Relations Manager 07990 550210




A conference call for analysts and investors will commence promptly at 9.30am
BST.


Interested parties can dial into the conference facility on the number that
relates to their country.

[jeffian] 23/9/2009 19:40

AB,

Your forecast (#9) is looking uncannily accurate!

You don't work for UBS, do you?!

8-)

[jeffian] 17/9/2009 16:47

AB,

Looks like you could be right!

[5dally] 17/9/2009 15:15

Taking a bit of hit today

[jeffian] 15/9/2009 10:38

AB,

Agree with you about IC plus it's usually history by the time the mag hits the doormat. I also took umbrage at the point they wanted to charge for the website on top of the mag subscription! Anyway, don't feel I'm missing much.

I've been a (very!) long term holder of ETI but took some off the table when all the Directors sold recently. I was going to wait until the Trading Statement on 29/9 before making any further decisions. I don't know if you've picked up on the latest case where the High Court has set a lower rent than usual on an ETI lease renewal. It's unsettled the sector and no doubt the analysts will have a field day if they apply the figures across the whole ETI and PUB estates. ETI rushed out a response but it will be interesting to hear what they say about it in their TS - if anything.

Regards, Ian

[andrewbaker] 15/9/2009 10:20

I stopped reading IC several years ago, and have never regretted it. Roxspur was one classic buy recommendation they made and that sank without trace and I was daft enough at the time to hang in. I could quote others. If the choice is between IC and tossing a coin: the coin wins.

ETI I hold and am thinking of selling if it breaks support at 162p as I feel that it could drop back into the 140s and from there back to the 120p region. Only a long-term holder would want to stay with such a scenario, IMHO.

[diku] 12/9/2009 12:36

There is a belief that when IC recommends a stock...do the opposite!...when they say Buy!...that's a "Kiss of Death"...

No Advice Intended...

[jeffian] 11/9/2009 10:16

I am a holder, but just a couple of comments on the posts above.

Whilst it's obviously helpful for the pub industry generally to have some good reports coming in, it is the Pub Retailers who are prospering whilst the tenanted estates are still struggling. JDW estate are purely Managed Houses, whilst it was only the Managed House side of GNK which did well, saying ".....Profit trends within Pub Partners, our predominantly tenanted business, have continued through the summer in line with those seen at the end of the last financial year......After 16 weeks, average EBITDA per pub is -7.2%." ETI has a purely tenanted estate. Having said that, ETI/PUB were reporting tenanted EBITDA down 12% back in May so perhaps the GNK statement is an improvement!

Secondly, there is an issue around asset values. The JDW figures are up "pre-exceptionals". Those "exceptionals" are mainly property value write-downs (around £20m). Many commentators have said that ETI has not been sufficiently 'realistic' in valuing its pubs and, of course, there are covenant issues behind that point.

Finally, there is also the uncertainty arising from the reference of the 'tied' model to the Competition Commission.

As I say, I'm a holder so my personal view is that there is still value here despite the above, but these issues may need to be overcome before it is realised and the JDW figures today are not of themselves that relevant to ETI.

Regards, Ian

PS. I see Investors Chronicle has a 'sell' on it today. Anyone got the article? Mind you, having followed this over the years, I can tell you that IC were saying 'buy' at £5/£6+ and 'sell' at 39p so you may feel they're a contra-cyclical indicator!

[fegga] 11/9/2009 09:02

cr,

agree chart for eti looks good, 20 day crossed the 50 day ma in early august - have seen a near 30% increase since then - whats going to take it up the next (sizeable) leg? am concerned about the debt



whats your take on it?

[cockneyrebel] 11/9/2009 08:17

Must be due a breakout soon based on JDW and GNK news recently imo.

Look at it having a go at that chart.

CR

[alex_raga] 25/8/2009 09:50

not alot of activity

[alex_raga] 23/8/2009 17:17

what is the target price.
i have just started looking at this company so not up to date with info

[gdasinv2] 21/8/2009 11:35

LTW is breaking news ( 50% rise again to the 100% rise yesterday) - time to make a punt on property and pub mkt.

Despite lot of SALE....the share price is up like a rocket. something fishy...some inside trader is betting a lot ( possible with lot of license and financing on the


BUY is recommend now to make a punt

[kooba] 11/8/2009 07:58

from ft market report.
Share sales squeeze Enterprise
Enterprise Inns slid 1.9 per cent to 172¼p after two senior directors took advantage of its rebound.

Ted Tuppen, group chief executive, raised more than £500,000 with the sale of 300,000 shares at 167p apiece, while chief operating officer Simon Townsend cut his holding by 67,500 at 172¾p each. Enterprise has jumped more than threefold since December, when both directors had added to their stakes.


men to follow??

[purple boots] 31/7/2009 10:12

looking a little better.

[jeffian] 15/7/2009 12:49

shammy,

Personally, I doubt that you'll see any improvement in either revenue or profit-per-pub but even a stabilisation of the downtrend would be a result. Having said that, even at these levels they're on track to eps of around 30p and if they can convince the market the debt is serviceable that, IMHO, is likely to have a far greater impact on the share price than short-term profit trends. All the focus is on the renegotiation of the £1bn facility due May 2011 (the securitised loans are amortised over a long period and should take care of themselves) and if they can give any comfort about that, it would be helpful. I would also like to see some comment on the restoration of a dividend - at an appropriate time and level - both as a gesture of confidence and a real support to the share price, but that may be wishful thinking!

Regards, Ian

[shammytime] 15/7/2009 12:23

Net profit from each pub in the last set of figures was down 8%. Any improvement on that will see us above 150

[shammytime] 15/7/2009 12:14

hi jeff - indeed it is. Expecting an improvement in revenue tomorrow. Should see a substantial rise in sp

[jeffian] 15/7/2009 12:08

Trading update tomorrow.

[shammytime] 15/7/2009 11:06

Blackrock have increased. 150 tomorrow I suggest

[osirisra] 24/6/2009 07:56

Yep I'm with you there Ian about the rights issue worries. I started to get into ETI this time around just as the others started to go to the market foe cash. So if we dial that in then we could see a 25p+ correction in the share price if TT catagorically (duff spelling probably) states there won't be one, for now at least.

[jeffian] 23/6/2009 11:51

osi,

I fear there is currently an unbreakable link between the sp's of ETI and PUB and I don't see it broken until it becomes clear who are the winners and who the losers. That ain't going to happen at least until ETI refinance the short-term banking facility due May 2011 and convince the market they can trade their way out of this plus I think waiving the divi will prove a mistake in hindsight. On top of all that, with Rights Issues by PUB, GNK and MARS, the market must be betting ETI are next in line with the begging bowl. Pray not! It would be nice if Ted Tuppen could give a robust statement on 16 July reassuring us on all these points but I fear he may now be too deeply in the clutches of his bankers and nomads.

Regards, Ian