The Dutchman
21 Dec 2016
Re: Takeover??????????????????? I'm normally the person on these forums who counsels caution, but wrt EL I'm actually quite hopeful. The Business seems to have stabilised, and a tiny amount of growth is now apparent. With the large discount to NAV the decision has been taken to buy back shares and you see some buyback being announced a couple of times a week. Both of these factors plus the possibility of a bid seem to have boosted the share price - not yet to the figure I paid for mine 4 or 5 years ago but going in the right direction.As for the business itself, obviously there are headwinds in the form of changes in rules regarding beer ties etc, but management seem innovative in trying different models and being honest in admitting that some haven't worked.I rarely visit pubs, but whilst in Devon last month had lunch in an EL pub in Salcombe, remarkably good value and well patronised -- hopefully they double or triple the prices for July and August !
I R Baboon
21 Dec 2016
Re: Takeover??????????????????? on paper I think yes, they are at heavy discount to NAV which is why I got in years ago, potentially the sort of thing private equity types might be interested in either to sell off or as a going concern but the issue theres not really any growth in the business to drive interest from such investors and an asset sell off is very risky as they have to keep writing down assets year after year I preferred them when they were using sale proceeds to pay down debt but now they are investing a lot of proceeds - to what effect is not yet clear as far as I know there has been zero interest ever made public in them but obviously hoping !
livadia22
20 Dec 2016
Re: Takeover??????????????????? Sunday Times speculating that with Punch being bought by Heineken, EI could also be a target. Any thoughts ??
ceili
23 Nov 2016
EI publicanpartnerships EI publicanpartnerships?Anybody know anything about them? Debt management? Sleight of hand economics?
ceili
13 Jul 2016
Takeover??????????????????? Enterprise Inns shares oversold Harriet Mann | Tue, 22nd March 2016 - 17:29 "The share buy-back will be funded from the excess cash flow that management expects to generate in the current financial year. "Hmm!When a company is losing its lines of credit, owes £'000s to suppliers and building/refurbishment partners, is losing 'face' with major brewers, has management staff off ill with stress, and pub tenants are 'doing a runner', the above statement looks somewhat puerile.
Eagerbeaver66
23 Mar 2016
Good results and good plans I wonder when the buybacks can start?With price currently at such a discount to the NAV, then a buyback seems a better way to return cash to share holders than a dividend. - It should push their NAV up to 240p, and if it push the share price up to match its peers, and the Reits, then the share price could well recover over 200p, and then that would be a good time for dividends to restart.
II Editor
22 Mar 2016
NEW ARTICLE: Enterprise Inns shares oversold "After losing half its value last year, pub owner LSE:ETI:Enterprise Inns received a fillip Tuesday when it reported faster-than-expected growth in like-for-like net income. Its year-old growth strategy is on track, too, and a £25 million share ..."[link]
II Editor
16 Mar 2016
NEW ARTICLE: Budget 2016: winners and losers "The UK economy might not grow as fast as expected this year and next, warned chancellor George Osbornen, but his eighth budget was packed with enough tax breaks and tax hits to send share prices crazy. In fact, the value of London's FTSE 100 ..."[link]
ceili
10 Dec 2015
Re: poor results Too right. I've pulled out and taken a hit. A management property company attempting to run pubs profitably is a different ball game, and they are not succeeding.
I R Baboon
17 Nov 2015
poor results rather poor overall - the fact they are still writing down the estate as the economy picks up is suspicious so probably there were a few hundred mil that should have been written off aged ago - the bond refinancing was an especially bad piece of business whatever stories management spi
II Editor
16 Nov 2015
NEW ARTICLE: Trends and Targets for 17/11/2015 "ENTERPRISE INNSÂ (LSE:ETI) presents a pretty dire picture currently and needs some good news in a hurry. Movements since May have not been confusing - 'they want it down' - and point to the share hopefully bottoming somewhere around 85 to 90p. ..."[link]
Misty Creamybib
02 Sep 2015
ETI & PUB Two years ago if you asked me if thought investing in pubs was a good idea I would have said you were off your rocker. Pubs were closing at an alarming rate and I saw no growth in the sector. fast forward to now I have looked at the charts on each of these companies and the respective low forward P/E (as per digitallook). The trend over the last year has been up which is a result of culling unprofitable pubs and write downs finally shining through. It appears that the estates now contain pubs which offer good food and an atmosphere for a wide demographic of people. Growth will pick up in line with the economy but given the valuations both these look attractive. I hold both on a watch list and am ready to buy - (I'm a sucker for trying to market time!) I prefer these stocks to most of the retail / supermarket plays which have gone the other way, there are too many supermarkets! Good luck to all holders.
r21442
21 May 2015
IC article But I want to focus on a development in the pub industry: Enterprise Inns ' (ETI) strategic review. This was notable for being the first reaction of substance from a pub company to parliament's unexpected decision last November to unknot the beer tie by giving publicans a "market rent only" (MRO) option on their leases.At present, just under half of Britain's 50,000 pubs are subject to the beer tie - a 400-year-old operating model whereby tenants pay a lower rent in exchange for the obligation to source beer from their landlords. The last government's Small Business, Enterprise and Employment Bill, which was amended by a defiant House of Commons to reinstate the MRO rule excluded in the draft legislation, will probably come into force next summer. It sets out a new statutory code for all owners of tied pubs, but the MRO applies only to those six companies with estates numbering more than 500: Enterprise Inns, Greene King (GNK), Marston's (MARS), Punch Taverns (PUB), Admiral Taverns (unquoted) and Star Pubs and Bars (part of Heineken).Of the listed names, Enterprise and Punch Taverns are the two companies overwhelmingly affected, because only they specialise in tied pubs. Most of Greene King's properties are managed directly as retail outlets, while Marston's - seeing the writing on the wall - has since 2009 been ditching leases in favour of franchise agreements, which are exempt from the legislation.The review launched by Enterprise last week is radical. The company currently has just under 5,200 pubs, of which 5,000 are tied. Over the next five years, it expects to convert about 800 of these into directly managed pubs, and a further 800 or so into free-of-tie leased pubs - in effect retail properties let on normal commercial terms. Roughly 1,000 more pubs will be sold off. Overall, the tied estate is expected to halve.This process is about returns as well as regulation. Managed or franchised pubs routinely outperform tied pubs, perhaps because they can be better controlled. Marston's posted like-for-like sales growth of 1.4 per cent for the six months to 4 April, while managed pub specialist Mitchells and Butlers (MAB) turned out 1.7 per cent growth. The equivalent figure for Enterprise Inns was 0.6 per cent.The opportunity for investors in Enterprise's review is that it could - eventually - crystallise the deep value on offer in the shares. These currently trade at less than half the group's net asset value, and just seven times forward earnings. Shares in Punch Taverns - which has yet to give a detailed response to the MRO question - are even cheaper.One reason for the discounts is that investors don't believe in the pub valuations. This is reasonable enough: both companies have been writing down the holding value of their estates for years. Both also have hugely overstretched balance sheets, with loan-to-value ratios of about 60 per cent (even after Punch's capital restructuring last year), ruling out dividends.Still, if Enterprise's plan to overhaul its portfolio shows signs of success, the discount could start to look unwarranted. Consider the free-of-tie portfolio: Enterprise said this could eventually be spun out into a separate vehicle with the tax-efficient status of a real-estate investment trust (Reit). Shares in regional property Reits currently trade at a premium to book value. Shorn of the beer tie, Enterprise's leased estate could theoretically see its value in the eyes of equity investors more than double.A similar back-of-the-beer-mat calculation can be made for the managed estate. This kind of approach gives brokers at Barclays a sum-of-the-parts valuation of 266p for Enterprise Inns, as it sees itself in 2020, compared with 134p now. Of course, such analysis is hugely simplistic, and subject to plenty of unknowns. We have little idea how many tenants will opt for market rents, or whether these will make up for lower beer profits. Above all, such an extensive restructuring inv
r21442
13 May 2015
Re: Quiet in here Can't believe I may get my money back...[link] new strategy at pub franchise Enterprise Inns (ETI) has been more ‘transformational’ than expected.Numis analyst Douglas Jack retained his ‘add’ recommendation and target price of 150p on the stock following half-year results. The company reported profit before tax increased 5% to £57 million, sparking a 2.7% rise in the shares to 136p in a falling market.‘The direction of the strategic review is as expected, but the scale of the conversion programmes to managed pubs and commercial leases is much greater than expected,’ he said. He said management was now targeting like-for-like net income growth over the full year. Numis is holding its forecasts ‘with the main short-term change being increases in target disposal proceeds to £75 million per annum and capital expenditure rising to £79-£80 million per annum’.
r21442
20 Nov 2014
Quiet in here but here's an IC comentary from today...Some of Britain's largest pub companies were dealt a blow this week after MPs gave the government a bloody nose and voted to add a Market Rent Option (MRO) to the Small Business, Enterprise and Employment bill. The new legislation is on its way to the House of Lords. Companies such as Enterprise Inns (ETI) saw their share price crash 14 per cent on Wednesday morning, with shares in debt-laden Punch Taverns (PUB) falling 10 per cent and recent acquisition-target Spirit Pub Co (SPRT) down 6.5 per cent. The MRO would remove the 'beer tie' which pub companies currently benefit from, which goes some way to explain investors' reaction to the news. At present, tenants purchase supplies exclusively from the parent company which owns the pub, but the removal of such a 'tie' would mean pub landlords could purchase goods from wherever they choose, driving up competition in the market and removing the monopoly held by listed pub companies. The parliamentary decision came just one day after Enterprise Inns reported 2014 annual results. Like-for-like net income rose 1.4 per cent last year, with 0.5 per cent of growth in the final quarter. Enterprise's rampant disposal programme, which is culling under-performing sites from its estate, meant underlying cash profits dropped to £302m (2013: £313m), although pre-tax profits (excluding exceptional one-off charges) stayed flat at £121m. Analysts at Numis believe the new bill will be subject to more scrutiny in the House of Lords and may face other independent legal challenges as well. At the moment, companies like Enterprise Inns derive a substantial amount of their income through tied beer purchasing, also known as 'wet rent'. This means tenants have to sell the beer made by the parent company on site - but this would not apply under the new rules. Numis adds that the new laws and an elimination of the beer tie would inevitably hurt pub companies' profitability.IC VIEW:Given Parliament's frequent rejection of this type of bill and the timing of by-elections in the UK, this could simply be an example of political point-scoring. However, investors' reaction is understandable - the ramifications for this kind of bill are serious for Britain's pub industry. We advise sitting tight until the House of Lords shows its hand.
