Enterprise Inns plc (ETI or Enterprise), the largest pub owner in the UK, today announces its interim results for the six months ended 31 March 2016.
Financial highlights
- EBITDA* before exceptional items of £142 million (H1 2015: £144 million), in line with expectations and reflecting the impact of planned disposals
- Profit before tax and exceptional items of £57 million (H1 2015: £57 million) as interest savings from reduced debt offsets reduction in EBITDA
- Profit after tax increased to £33 million (H1 2015: £4 million), primarily due to lower exceptional refinancing costs and property valuation movements
- Adjusted earnings per share# up 2.2% at 9.2p (H1 2015: 9.0p)
Earnings before interest, tax, depreciation and amortisation
Excludes exceptional items
Operational and strategic progress
- Business performing well with continued growth momentum and strategic evolution on track, providing a clear path to maximising shareholder value through the optimisation of returns from every asset
- Enterprise Publican Partnerships – our reinvigorated tied leased and tenanted business
- Leased and tenanted like-for-like net income up 1.8% (H1 2015: 0.6% growth) across the whole estate
- New Partnership Tenancy Plus agreement to be launched in second half of financial year
- Improved publican profitability and enhanced operational support have helped to further reduce unplanned business failures, down 9% compared to the prior year
Enterprise Commercial Properties – our high quality commercial property portfolio
- Commercial property like-for-like net income up 5.2% (H1 2015: 5.0% growth)
- Rapidly expanding portfolio with 264 commercial properties at 17 May 2016 at an average annualised rental income of £59,000
- We have signed an unconditional contract, which will complete on 7 June 2016, for the sale of a portfolio of 22 sites for £20 million, at a yield of 6.7% and premium to book value of 9%, demonstrating the inherent value of our commercial property portfolio
Managed operations
- The total number of managed pubs trading at 17 May 2016 stands at 75 with 21 trading under our Bermondsey operation, 50 under our Craft Union operation and four within Enterprise Managed Investments
- We have now partnered with three managed experts and have a strong pipeline of interest from other exceptional operators
Strategic capital allocation framework in place to optimise returns from cash generated by the business.
- Net cash flows from operating activities increased to £129 million (H1 2015: £120 million)
- Additional net proceeds from the disposal of primarily under-performing assets of £27 million (H1 2015: £34 million)
- Total capital investment of £30 million (H1 2015: £33 million) with 50% focused on growth driving investment initiatives (H1 2015: 42%) yielding an average return on investment (ROI) of 19%
- Repaid £37 million (H1 2015: £35 million) of Unique securitised notes
- Initiated a new share buyback programme of up to £25 million of the issued share capital of ETI, with 3 million shares purchased to date.
Commenting on the results, Simon Townsend, Chief Executive Officer said:
“We are continuing to make good progress. Our leased and tenanted business is maintaining its growth momentum while the rapid expansion of our managed operations and commercial property portfolio is on track and delivering results in line with our expectations.
We are confident that the execution of our strategy is demonstrating a clear path to maximising long term shareholder value and our returns driven approach to allocating excess cash will deliver near term benefits to all our stakeholders.”