Up 130% over the last year.
Anyone else watching this one.

Interim Management Statement

Trading performance

Trading during the period has been in line with our expectations with total estate like-for-like net income for the 44 weeks to 2 August 2014 growing by 1.3%.

Growth in our third quarter was particularly encouraging with like-for-like net income up 2.1%, assisted by our on-going operational initiatives and the FIFA World Cup in June. The first five weeks of our fourth quarter have produced trading in line with last year which is as expected given the more challenging comparative period, resulting in like-for-like net income growth of 1.5% for the first 18 weeks of the second half.

We remain focused on the delivery of our operational initiatives which we are implementing to continue to improve our trading performance. The rate of business failure continues to fall and we are making further progress with the provision of additional services to our publicans which are aimed at supporting publican profitability.

Cash flow and balance sheet

Our cash flow and balance sheet metrics are in line with expectations. We expect to meet our full year guidance of net proceeds from asset disposals of £70 million which will be used to fund our capital investment programme.

Strong cash generation from operating activities will continue to be used to reduce debts and we anticipate total net debt will be reduced to £2.4 billion by the year end.

Simon Townsend, Chief Executive Officer, commented:

"We are pleased to report continued progress for the business with the delivery of our fourth consecutive quarter of like-for-like net income growth. The final quarter of the year will be measured against tougher comparatives but we are encouraged by the start we have made and remain comfortable with our full year expectations.

"We are focused on constantly improving the quality of our pubs, continuing to direct an increased proportion of capital investment toward initiatives which will grow income, while reducing the level of business failures and supporting our publicans to grow their businesses. Through these initiatives we believe that our progress will be maintained."

ETI ENTERPRISE INNS, tech breakout occured. Resistance at 135p 143p and 152p. 02 Oct Deutsche Bank Buy 205.00p TARGT

Moving up nicely. Timed to perfection like BVIC.

Final Results

Financial highlights
Ø Further progress in like-for-like net income with growth of 0.5% in the final quarter resulting in an increase of 1.4% for the full year

Ø EBITDA* before exceptional items of £302 million (2013: £313 million), in line with expectations following the impact of planned asset disposals

Ø Profit before tax and exceptional items maintained at £121 million (2013: £121 million) as interest savings from reduced debt offsets reduction in EBITDA

Ø Profit after tax improved to £30 million (2013: £4 million loss) after net exceptional charges, principally relating to property matters, reduced to £65 million (2013: £99 million)

Ø Adjusted earnings per share# in line with prior year at 19.0p (2013: 19.0p)

Ø Strong cash generation from operations enables continued reduction in net debt, down to £2.4 billion (2013: £2.5 billion)

Ø Partial refinancing of 2018 corporate bonds and a new revolving bank facility completed on 7 October 2014 provides a smoother and extended debt maturity profile with a reduced overall cost of borrowing, improving flexibility and optionality


Operational highlights
Ø Net proceeds from disposals of £73 million (2013: £150 million). The asset disposal programme materially reduced to focus primarily on under-performing assets with proceeds re-invested for higher returns

Ø Capital investment of £66 million (2013: £62 million) across the estate of which 41% was focused on growth driving initiatives, up from 32% achieved last year

Ø Operational focus aimed at improving publican profitability which has helped deliver a 16% reduction in business failures

Trading Update

Canaccord note today:
We are upgrading our recommendation for Enterprise Inns to BUY from Hold and increasing our target price to 150p from 115p. The contested bid for Punch Taverns resulting in an agreed offer 40% above the undisturbed share price is a reminder of the latent value of the asset-intense pubcos in general and Enterprise Inns in particular. The Punch bid may have been the catalyst for our reappraisal but it is not the sole reason. Enterprise Inns is now making good progress versus its strategic plan to transform the company's business model against a known regulatory environment. This, in turn, should deliver an improving quality cashflow which will be channelled into paying down debt and share buy-backs, assuming no change to Enterprise's EV; this should act as a powerful driver for the share price and push it towards 200p by 2020.
Enterprise's market capitalisation of £572m is just 25% of its £2.8bn EV so small changes can result in large moves in the share price. Over the next four years Enterprise is scheduled to pay off c£336m of Unique bond debt. It is also planning to buy back c.£25m of shares pa, or c£100m from the commencement of the programme through 2020, equivalent to 14% of the market capitalisation. This can be financed out of cashflow with the £300m of property outside the securitisations providing the safety cushion should circumstances change. To date, ETI has bought back £18m (17m of shares at an average price of 94p) of the planned £25m. We expect ETI to renew its share buy-back permission at the February AGM. In November, Enterprise repurchased £250m of the £350m corporate bonds due 2018, financed by a new £250m bond, due February 2022, at a coupon of 6.375%. The refinancing was expensive in our view as it paid 111.0% of the principal, representing a cash payment of £27.5m but it reduces a potential 'negative' to future share price performance.
Our concern over the execution risk of adapting the business model to the new regulatory environment (enshrined in the Small Business, Enterprise and Employment Act which came into effect on 21 July 2016) is falling in line with Enterprise's progress. At end FY16, it had delivered 105 managed houses and 291 free-of-tie deals as promised. Encouragingly, the threat to its business model from the Market Rent Option (MRO) is also proving to be less of a worry. Since the new legislation was enacted there have been 285 trigger events, of which 94 have requested a MRO quote, none of which has resulted in a MRO compliant agreement. In 2017 there are c600 events that may trigger a request for a MRO quote.
Our new 150p target price represents a staging post towards 2020. It also reflects the execution risk explicit in delivery of the plan. It is equivalent to a PE of 8.2x, EV/EBITDA of 10x and FCF yield of 5.2% for FY17E falling to 7.7x, 9.6x and 9.8% for FY18E. Our TP is underpinned by a NAV of 290p/share for FY17E.

Went long yesterday spread bet @ 121.98 had a good run. If it can break 130p hoping to catch a ride up to target 150p. Tight stop 118p.

AGM and trading update 9th Feb.

LATEST BROKER VIEWS

Date Broker New target Recomm.
5 Jan Numis 160.00 Buy
8 Dec Deutsche Bank 150.00 Buy
23 Nov Canaccord... 115.00 Hold
17 Nov Barclays... 115.00 Equal weight
16 Nov Barclays... 80.00 Underweight
15 Sep Panmure Gordon 100.00 Hold
29 Jun Deutsche Bank N/A Buy
18 May Deutsche Bank 150.00 Buy
17 May Canaccord... 85.00 Hold
17 May Panmure Gordon 100.00 Hold

130p proving hard to break, stop to entry for risk free trade.

Well maybe not.

Stop to 129p.