Enterprise Inns Share Discussion Threads

[cerrito] 03/2/2012 18:23

Jeffian, I can understand your feeling, especially as Fullers will be very discriminating at what they buy.
It is sad but true as the_doctor says that this is the fact of life.
Jeffian:Are you going to AGM this year? If so interested in what you may learn..and indeed anyone else who may be going
An interesting article on the industry in today's FT

[the_doctor] 03/2/2012 10:45

jeffian, they're not going to be able to reinstate a dividend because any cash they have will be needed for the debt repayment schedule

they have no choice but to sell assets - core or otherwise
yes, that'll go against earnings stabilisation, but unless they sell assets off, they wont have enough cash for the debt repayments from 2013 onwards

imo, they'll have to aim to do both - sell off some assets to cover cash requirements, but hopefully still manage to stabilise earnings with the pubs they keep - that in a way is a compromise to selling off the whole lot - which is something they'd not really be able to do anyway would they? (regardless of book values)

agreed that it could be better to sell lower quality pubs, but some of those
a) may only be able to be sold at a discount to book value, which would worry the market re total assets value
b) perhaps hold opportunity to improve

[jeffian] 03/2/2012 10:36

I must admit to finding myself slightly confused by the sale announced today of 15 pubs to Fullers for £22.9m (£1.53m/pub). The rationale for selling bottom-end pubs has always been obvious; the rationale for the sale-and-leaseback of the 'super-pubs' for +/-£3m has been that they are achieving way over 'existing use' value; but the latest deal seems to be a case of just selling quality core assets (albeit at a premium to Book Value). What signal does that send out?

At the last AGM, I did point out that, with a claimed NAV of 282p/share vs. a market value of pennies, if they could not stabilise profits and reinstate a dividend for shareholders to bring the share price more in line with NAV, then they might as well sell the lot and distribute the surplus cash. You don't suppose they were listening, do you?!

[the_doctor] 02/2/2012 13:04

perhaps up through 40p this time then?...

[inv] 22/1/2012 11:53

This looks good. Bid coming in the next week or so

[the_doctor] 20/1/2012 14:52

Looking a bit better...

Wouldnt take too much to get this over 40...

The next trading update will make/break it
positive/on track and it'll be up
disappointing and it's down!......

[cerrito] 17/1/2012 19:37

Greene King threw down the gauntlet today with their very positive Christmas trading experience and will be interesting to see how ETI has done

[the_doctor] 06/1/2012 13:00

'ETI will be reliant on further pub sales to meet debt amortization requirements and successfully refinance bank facilities in 2013'

oh look, there's those debt amortization requirements from 2013 again that I highlighted but most seemed to ignore!?

Sadly I only bought in here because I hadnt seen the debt amortization schedule :o(




'Limited headroom under the Unique dividend lock-up threshold could have implications for ETI's future covenant compliance under its bank facilities.'

anyone able to explain this?

[the_doctor] 28/12/2011 10:52

'possible use of cash proceeds'!??

they wont have any money
any money they have will be needed for the mandatory bond repayment schedule (you know - the one I referred to but nobody on here seemed able to understand until the company highlighted it in the last presentation)

[tiltonboy] 23/12/2011 22:20

Covenants will probably mean they will only be able to apply a portion of the proceed to buying back their bonds, but I would like to see them do more. To buy back debt at 10%+ yields while increasing operating costs at a considerably lower level makes a lot of sense.

[cerrito] 23/12/2011 21:12

Been going through the annual report to see if any hidden nuggets.
Have to say it is the first annual report I have read at least of a major company where there is no Chairman's statement-may be a perfectly innocent explanation and perhaps they do this every year but my first reaction was to remind me that perhaps Tuppen dominates the board too much
Certainly he gets paid very well although was pleased to see from page 44 that total remuneration has gone down from £1.2m to £0.9m in the last year but that does not take into account the £160k pension contribution..As someone who has more exposure in the bonds rather than the shares can take cold comfort that he gets more of his bonus in shares than in cash than the contracts stipulate.
I did spend some time looking at the cash flow: in the last FY net operating cash flow was £326m and one has to take from that net interest paid of £19m. This leaves £135m and they spent probably a necessary £72m on capex, leaving £63m for debt reduction. The company will have done well if in this current FY net operating cash flow does not fall; capex may well go up rather than down though I guess interest charges will be lower. Let's say £60/£65m available for debt reduction with £126m of Tranche B to be paid off in the 15 months from October 1 2011.
One hopes therefore they will be able to hit their £150 disposal figure (they have not specified if this is before or after costs-see comment in my 659..
As a bond holder I like the sale and leasebacks with its long term finance and I think as a shareholder I do as well; I note for todays' deal that the initial rent roll pa is 6.85% of the total cash consideration though we have no idea what the true financial cost is after whatever front end fees there may have been.
Interesting that in today's RNS they mentioned that buying back bonds/notes was one possible use of the cash proceeds given that in the results conference call Tuppen ruled this out and said the priority was on repaying Tranche B and that the amount of bonds they could pick up was probably quite low. Bond prices have of course fallen since then.
Not practical for me to go to the AGM and given the very good info we get in the results presentations/conference calls no need to.

[diku] 20/12/2011 16:47

Not just here but have noticed with other mid/small cap shares as well....any rally gets hammered just as quickly as it went up....

[the_doctor] 20/12/2011 13:47

well, that recovery just couldnt last, could it

[jeffian] 19/12/2011 17:31

"jeffian - 23 Nov'11 - 16:52 - 651 of 670 edit

...in relation to...comments about pressure on consumer disposable income, I have worked through every recession since 1972> and every time this argument has been raised against the pub industry - and yet it's still there. Firstly, although obviously 'discretionary' spending, going to the pub seems to be among the last things cut rather than the first(!) and, secondly, the industry has evolved, most notably by moving away from wet-led high-volume 'boozers' to food-led quasi restaurants. In fact, there is some recent evidence that food pubs have actually prospered during this recession as people have traded down from restaurants to pubs rather than stop going out at all.

As Mark Twain nearly said 'The death of the pub has been greatly exaggerated'."

As I was saying -

[jeffian] 12/12/2011 23:43

scburbs,

They didn't need to.

8-(

"These deferred share awards are in respect of the above individuals' total annual bonus award under the 2005 Plan for the financial year ended 30th September 2011 and are not subject to further performance criteria."

[scburbs] 12/12/2011 20:58

Difficult to imagine a performance target that they could possibly have met!

[cerrito] 12/12/2011 19:49

I saw that as well.
I suppose we have to be glad that they are not getting cash bonuses and I suppose that as this has been around since 2005 I knew/could have known about it when I purchased shares first
At least I know that until December 2014 his interests and mine are aligned in terms of the share price
I saw that last year he got 535k so he must have done better this year to get 739K

[jeffian] 12/12/2011 16:32

Ref post #665, I was going to respond that Ted's purchase looked like a bit of 'tokenism' given the number of share options he has, but I couldn't be bothered. And then this -



If you didn't laugh, you'd cry, eh?

[cerrito] 09/12/2011 17:59

2018 bonds have been weakening over the last couple of days and are now 67/69.5 so anyone buying them now gets a 13% odd GRY

[cockneyrebel] 05/12/2011 13:19

Chart looking much more positive here imo.

I see the CEO has just bought 100k here today.

Sector has held up much better than I thought it would.

CR

[jeffian] 05/12/2011 13:11

Ref my post #651 above about the resilience of pubs in a recession, I was interested to note in yesterday's Sunday Times that their 'Fast Track 100' (The 100 fastest growing UK private companies) included 2 pure pub companies and 5 if you included restaurant/hotel operators. Rather supports my view, I feel. The pub sector is not declining, it's 'evolving'!

[jeffian] 01/12/2011 08:38

Or too little for ETI?!

8-)

[cerrito] 01/12/2011 08:24

Just been looking at GKN's interims:I have never held shares in them.
Interesting that both GKN and Mars focused much more on food than ETI did.
GKN seems to be doing well with ebitda per pub in its tenants division Pub Partners up 3.3% and increasing its dividend.
Interesting to do a crude analysis of total assets(including intangibles) to Marcap. GKN with a marcap of £1,075m trades at a 16% premium to its Net assets of £927m. Mars marcap of £570 is at a 30% discount to the net assets of £817m, whereas of course ETI marcap of £175m is at a 88% discount of net assets of £1,397m.
You are paying alot for the good relative performance of GKN.

[cerrito] 30/11/2011 23:28

I was having a look at the annual results of Marstons whose shares I used to own. Interested in their tenanted division Marstons Pub Company and they seem to have performed better than ETI although as I could not find a geographical breakdown of the MARS pubs difficult to make a meaningful comparison.