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

ETI ENTERPRISE INNS

THIS LOOKS LIKE A SIGNIFICANT
POLICY CHANGE................

FOCUSING THE BUSINESS ON GROWTH



In order to secure the path to earnings growth, our operational teams are focusing on four key differentiating activities: enhancing the quality of the estate; attracting and retaining the right publicans; providing exceptional local support and selling in smarter ways to optimise income.



Enhancing the quality of the estate



Sometimes changes in the local market conditions for a particular pub can be so severe that even the best publicans cannot generate a sustainable level of return. In such circumstances the appropriate outcome is to work with the publican to identify alternative opportunities for them whilst our Property team work to optimise the alternate use value of the asset. This churn removes the unsustainable element of the estate and generates cash proceeds from disposal that can be used to repay debt or invested in the core retained assets to optimise their income potential.



Over the next three years we expect the estate to reduce to approximately 5,200 pubs. Over the same period we plan to maintain our level of investment and spend approximately £180 million to improve the quality of our estate. In the recent past, a significant proportion of our capital expenditure has of necessity been defensive in nature ensuring basic functionality is in place to enable a continuation of trade. Looking forward we plan to direct an increasing proportion of our capital expenditure on growth driving activities, where appropriate repositioning pub businesses to meet the changing needs of their local customer base.



Attracting and retaining the right publicans to the Enterprise offer



Identifying, recruiting and supporting well-funded, quality publicans are critical success criteria for our organisation and we plan to reinvigorate the current suite of agreements that we offer. Quality pubs, together with attractive and flexible agreements, will attract the best talent and allow entrepreneurialism to flourish within the pub industry. We have many highly successful pubs and publicans, frequently acknowledged for their quality and contribution to their communities. For example, in 2012, the Royal Oak Inn in Appleby-in-Westmoreland was recognised as the UK's Best Leased and Tenanted pub in the annual Great British Pub Awards.



A change of publican can be the catalyst for revitalising and securing the prospects of a pub. A seamless transition from one publican to another is always the preferred outcome for publicans, their customers and ourselves. However, in recent market conditions this outcome has sometimes been difficult to achieve. Even the best publicans may need our support to tackle the multiple challenges of declining consumer confidence, increased overhead costs, the burden of punitive increases in taxation and the high cost of regulation. In an attempt to prevent outright failure we have therefore continued to provide temporary concessions to publicans where appropriate, and have seen this cost reduce from £15 million last year to £6 million in 2012. Some of this reduction has been embedded in amended terms for good publicans because we acknowledge the permanent nature of changes in the market within which they operate. However we have also removed concessions where it is clear that a change of publican is the best outcome for the trading prospects of the pub.



Another cost associated with business failure is the bad debt that may arise on the departure of the publican. It is reassuring that the underlying cost of bad debt in the year has reduced to £1.3 million (2011: £1.5 million), with the level of overdue balances also down to £4.0 million (2011: £5.0 million), representing only 0.6% of turnover.



Our approach to the tie has continued to evolve, and free-of-tie options for bottled beers, ciders and flavoured alcoholic beverages ("FABs"), wines, spirits and minerals, gaming machines and guest ales are available in every new agreement. Where circumstances have been compelling to both parties, we have been able to agree completely free-of-tie terms. This suite of available options ensures that all publicans' needs can be met, whether at the time of a new agreement, or in order to sustain and evolve an existing relationship.



Our evolution of the traditional pub tenancy agreement, developed and trialled successfully as part of Project Beacon, has been further extended during the year. A greater level of direction and support from us provides both experienced and inexperienced self-employed publicans with the opportunity to work with us in a new and innovative way. Our comprehensive support packages include flexible start-up arrangements, industry-leading training, upweighted marketing support and strong financial discipline. Our regional managers provide commercial insight and work in partnership with the publican to develop the most appropriate retail proposition to compete sustainably in the local market place.



We have increased the number of outlets operating under the Beacon format to 254 (2011: 90) and are encouraged by their results. They are typically smaller, wet-led pubs with an average net income of around £35,000 but which have delivered significantly improved net income when compared to the three months prior to conversion. Aligned with our successful disposal programme, we believe there is a natural limit to the number of our pubs that would benefit from this particular product offer and method of operation and now anticipate a total population of around 300 pubs to operate to this format. We are extending the lessons learnt from Beacon to develop other concepts where food, sport or family are the more central elements of the pub offer, and we already have one trial site successfully operating a carvery concept.



Selling smarter



Our Commercial team, under the guidance of our new commercial director, has developed our thinking to optimise income by selling in smarter ways through our product offer, our pub offer and our service offer.



· Product offer



Development of our product offer will include initiatives to extract greater value from the increasing importance of food, entertainment and technology to the appeal of our pubs in their local markets. We are progressing our e-commerce plans to enable online order capture which will enhance our capability in product up-selling and tele-marketing. Key to the development of the product offer is our relationship with suppliers which continues to be strong. We will work with our suppliers to identify margin growth opportunities and target product mix and innovations that bring benefits to our publicans and to our income.



· Pub offer



Alongside our product offer we already provide an extensive range of marketing support activity to our publicans to allow them to service the demands of their customers and to compete effectively in their chosen market. For example, in cask ale, which now represents 19% of all beer sales volumes, we source 1,520 brands from 457 brewers, including 437 members of SIBA, who deliver their products directly to participating pubs, maintaining important relationships between local producer and publican and enabling our pubs to differentiate their drinks range from their competitors. We are implementing quarterly marketing campaigns that are events-led and category focussed which are supported by comprehensive marketing materials, the resources of our partner suppliers and of course our own regional teams.



· Service offer



Our training solutions have recently been enhanced to include a "Building your Business" programme which is designed to enable existing and new publicans to improve footfall and spend per head. Further training was provided in such areas as social networking and media marketing skills as well as more traditional business management activities.



We provide a wide variety of support packages to ETI publicans enabling them to secure essential services which are both cost-effective and legally compliant. Our Health & Safety Management Solution, heating, cellar cooling and boiler maintenance packages have now been taken up by thousands of publicans at a cost materially less than would be available in the open market. We continue to utilise our purchasing leverage and organisational capabilities to access beneficial purchasing terms for dry goods, consumables, utilities and other merchant services, securing significant savings for our publicans.



During the year we concluded a trial of Vianet iDraught bar management systems in our pubs, providing real benefits to publicans in controlling pouring yields, beer quality and cost management. We have subsequently made around 450 installations of the iDraught system into our estate in the year, alongside which we are also increasing the provision of EPOS Smart Till systems, where appropriate.



Exceptional local support



Our regional managers are at the core of the commercial relationship between us and our publicans and during 2012 we have invested in additional resource to enable these teams to spend more time directly engaging with our publicans in order to understand their needs and to help provide business building solutions.



At a time when the role of great publicans at the heart of their community has never been so important, we also set out to recognise the many publicans who add so much more to their communities than simply serving quality food and drink. We are investing £1 million over the next ten years to fund our Community Hero Awards which have been established to celebrate the contribution of publicans who have such an impact on the fabric and cohesion of their communities. From the many deserving nominations throughout our estate, 18 regional awards were made, and the national award for 2012 was presented to our publicans at The Hare Inn in Leighton Buzzard, who proved to be community heroes in so many different ways, organising local events to benefit veterans and the homeless, and inviting local teams, clubs, committees and other groups to use the pub as a regular meeting place.

edit.

UPDATE 1-Pubs firm Enterprise Inns targets stable 2012/13 20 Nov 2012 - 08:10

* FY profit before tax and exceptional items 137 mln stg vs 157 mln * LfL net income down 1.2 pct (2011: 4.3 pct decline * Reduced net debt by 266 mln stg to 2.7 bln stg * Targeting flat LfL growth in 2012/13 (Adds details) LONDON, Nov 20 (Reuters) - British pub group Enterprise Inns posted an expected drop in annual profit and said it was targeting flat underlying sales growth next year after a strong improvement in 2012. The group, which has around 6,000 pubs across Britain but is saddled with 2.7 billion pounds ($4.30 billion) of debt, has been focused on reducing its borrowings, raising 208 million pounds this year from pub sales and signing a refinancing agreement with lenders. "The market continues to be challenging but we are in great shape as a business... We have got flat like-for-likes or even growth very much in our sights for the (2012/13) full year," Chief Executive Ted Tuppen told reporters on Tuesday. Total like-for-like income declined 1.2 percent in the year to September 30, easing down from a 4.3 percent fall a year earlier, with an improved performance across the UK including a swing to 1.2 percent growth in the south of the country. Underlying growth where publicans have been in occupation for over one year - representing 81 percent of Enterprise's total net income - grew by 2.2 percent. Tuppen said that its first quarter would be tough, however, due to comparatives with an unseasonably warm October in the UK last year and an issue with its wine and spirits supplier. Against the backdrop of a British pub industry hit hard by a smoking ban, rising alcohol duties and a recession that has emptied customer's pockets, Enterprise has sold over 1,000 pubs in recent years and said it expected its estate to reduce to 5,200 over the next three years. The group said it had cut bank borrowings to 310 million pounds, down from 446 million a year earlier. Net debt now stands at 2.7 billion pounds, versus 3 billion pounds a year ago. Profit before tax and exceptional items in the year to Sept. 30 was 137 million pounds, down from 157 million a year ago but in line with a consensus of 9 analysts polled by Reuters. Shares in the group closed at 66.75 pence on Monday, more than double that of a year ago, valuing the firm at around 340 million pounds. ($1 = 0.6284 British pounds) (Reporting by Neil Maidment; editing by Rhys Jones) ((neil.maidment@thomsonreuters.com)(+44)(0)(207 542 2292)(Reuters Messaging: neil.maidment.thomsonreuters.com@reuters.net)) Keywords: ENTERPRISEINNS/

Management totaly focused on
Growth now and reducing the debt pile.

Could be a fantastic recovery stock
for 2013 imo.

20 Nov Enterprise Inns PLC ETI Panmure Gordon Buy 67.00 66.75 87.00 87.00 Reiterates

Numis Securities Ltd Gives Buy Rating to Enterprise Inns (ETI)
November 20th, 2012 - - by Tyrone Williams

Enterprise Inns (LON: ETI)‘s stock had its “buy” rating reaffirmed by research analysts at Numis Securities Ltd in a report released on Tuesday. They currently have a $1.75 (110 GBX) target price on the stock.

Shares of Enterprise Inns opened at 66.75 on Tuesday. Enterprise Inns has a one year low of GBX 26.25 and a one year high of GBX 76.50. The company’s market cap is £333.4 million.

Separately, analysts at Barclays Capital reiterated an “equalweight” rating on shares of Enterprise Inns in a research note to investors on Monday, October 1st. They now have a $1.45 price target on the stock.

Enterprise Inns plc is a United Kingdom-based company. The Company operates on one segment is that of leased and tenanted pub operator in the United Kingdom.

http://www.dailypolitical.com/finance/stock-market/numis-securities-ltd-gives-buy-rating-to-enterprise-inns-eti.htm

Enterprise Inns pleases investors despite profit fallPubs group says it hopes for flat sales or even growth next year despite problems besetting industry

Flat beer is not something for a pub group to aspire to, but flat sales is a different matter, given the current difficult economic environment.

Enterprise Inns, which owns 6000 pubs, said full year like-for-like sales fell 1.2% last year, a better performance than the 4.3% decline during the previous twelve months. Profits fell from £157m to £137m, in line with expectations. But with the industry hit by the UK smoking ban, cut price drink sales from supermarket, rising alcohol duty and the general gloomy consumer environment, the company said the first quarter was likely to remain difficult.

With £2.7bn of debt (down from £3bn last year) the company continues to sell unwanted pubs and expects to cut its estate to around 5,200 over the next three years. Chief executive Ted Tuppen, quoted by Reuters, said:


The market continues to be challenging but we are in great shape as a business. We have got flat like-for-likes or even growth very much in our sights for the (2012.13) full year.


The company's shares have edged up 0.25p to 67p, and Simon French at Panmure Gordon said:


Given the improving trading trends and falling debt we think the stock continues to offer significant upside potential. We reiterate our buy recommendation and 87p target price, implying around 30% upside potential.


Jeffrey Harwood at Oriel Securities was also positive:


While the shares have recovered strongly from depressed levels this year, we consider there is further good recovery potential given the improving trend in trading and the very low PE.

Posted by
Nick Fletcher
Tuesday 20 November 2012 11.20 GMT
guardian.co.uk

On a hummdinger of a move upwards.

Enterprise Inns plc (ETI)06:32 ET Nov 20, 2012Analyst Comment by Numis Securities

Numis Securities reiterates Buy rating on Enterprise Inns plc

Enterprise Inns ( LON: ETI) ‘s stock had its "buy" rating reaffirmed by research analysts at Numis Securities Ltd in a report released on Tuesday.They currently have a $1.75 (110 GBX) target price on the stock

21 Nov Enterprise Inns PLC ETI Oriel Securities Buy 72.50 Reiterates

Morgan Stanley

crosses the 16% ownership threshold, seems a lot of shares to hold in this company any views......surely not stakebuilding?!!

ETI ENTEPRISE INNS

Brokers Views and targets afer
yesterdays results.....

Enterprise Inns Broker Views
Date Broker Recommendation Price Old target price New target price Notes

21 Nov Oriel Securities Buy 73.75 - - Reiterates
21 Nov Deutsche Bank Hold 73.75 105.00 105.00 Reiterates
20 Nov Panmure Gordon Buy 73.75 87.00 87.00 Reiterates
20 Nov Deutsche Bank Hold 73.75 105.00 105.00 Reiterates

NORWICH & PETERBOROUGH BUILDING SOCIETY

ETI ENTERPRISE INNS

Chart breakout since results very bullish
on very high volume.



Longer term chart showing we have resistance at 94p (march) to
overcome and 97p (apr/may) resistance to overcome.

But on inspection of lower indicators their is still
plenty left in this stock. Just look at how low RSI is.

Looks a very bullish technical set up imo.

ETI ENTERPRISE INNS

ETI - from Numis Note 6 Nov:

"Plans to pay off almost all bank debt should generate attractive equity upside, in
addition to a possible further re-rating if investment and improving asset/licensee
quality leads to LFL net income growth in 2013E, as management expects. As a
result, we are increasing our target price to 110p from 100p."

transcript from their earnings call - this is a good bit imo:

"And shareholders, this has been quite a journey back from the dark days of 2008, when dividends ceased and the share
price collapsed by 95%. On the positive side, you'll see that we've kept your net asset value intact for the past four
years. Somewhere just £3 a share although EPS is pretty well halved. Now is the time to deliver like-for-like income
growth and EPS growth and to rebuild confidence in our business model and our asset value. Now in terms of
delivering shareholder value, I just want to deal with a couple of fairly obvious points and bear with me because you all
understand this even better then I do.
Firstly as you can see from the two blocks on the left, our net asset value is £1.4 billion or around to a £2.85 a share.
We traded 65p, a discount of 75% Net Asset Value. If you prefer on a total assets basis, the market believe that our
public estate over valued by about 27%. Clearly there is something for us to address there.
Secondly looking at the cash generation chart at the top of the page excluding disposals and CapEx, which in steady
state would pretty well offset each other, we generated net-cash of around 100 million last year. On an entirely
hypothetical basis let's now look at value creation over the next three years. Let's ignore disposals or at least assume
that they will generate cash proceeds broadly inline with net book value. Let's ignore dividends, if we pay dividends the
money goes to shareholders anyway.
Let's ignore the immaterial cash impact of like-for-like growth or decline or the purchase of debtor to discount, this is
not a forecast, it's not a financial module, it's a theoretical representation of the future. If we use our 100 million of cash
generation to pay down debt.
All things being equal and our enterprise value remaining the same, the mathematics demonstrate that the value of our
equity will double over the next three years and IRR of just under 30%
If confidence in our balance sheet improves, if debt ratios are deemed to be less of a risk, if we can deliver growth in
EBITDA or earnings per share, then the re-rating might help to push the total enterprise value towards"

ETI ENTERPRISE INNS


03 Dec Enterprise Inns PLC ETI Deutsche Bank Buy 91.13 86.00 105.00 135.00 Upgrades

SP TARGET 135p

0737 GMT (Dow Jones] Deutsche Bank upgrades Enterprise Inns (ETI.LN) to buy from hold and target to 135p from 105p. Says stability in trading is now clearly visible. Even though Deutsche Bank forecasts FY 2013 pretax profit to be down a modest amount, looks for +0.5% growth in like-for-like net income, followed by +1% for FY 2014 and FY 2015. Says, "Over the next three years, we see lost profit from disposals being offset by lower net finance charges and the ability to reinvest around two-thirds of capex for growth as opposed to pure defence of the past five years." Shares closed at 86p Friday. (andrea.tryphonides@dowjones.com Twitter: @ATryphonides)

ETI ENTERPRISE INNS


Interesting to find Numis also
have a SP target over 100p.

110p SP Target.

Date Company Name Broker Rec. Price Old target price New target price Notes

03 Dec Enterprise Inns PLC Deutsche Bank Buy 90.13 105.00 135.00 Upgrades
16 Nov Enterprise Inns PLC Numis Buy 90.13 110.00 110.00 Reiterates

NORWICH & PETERBOROUGH BUILDING SOCIETY

It will be interesting to see if more
analysts upgrade or downgrade over the
next few days.

05 Dec Enterprise Inns PLC ETI Numis Buy 90.75 90.50 110.00 110.00 Reiterates

SP TARGET 110p.

ETI ENTERPRISE INNS.....

Elsewhere Enterprise Inns rose 4p to 90p after Deutsche Bank moved from hold to buy and raised its price target from 105p to 135p. The bank said:


During 2012, the group's corporate and securitised bond holders saw the market value of their investment rise by around £340m while the equity investors have managed less than half of that. Even after this year's run, the share price remains 35% below the levels of April 2010, when the group was in poorer shape. We see 2013 as the year when the equity holders reap most of the upside in the market value.


Since the pub group's results on 20 November, its shares have risen around 35%.