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Trading has improved across all regions amid progress with a potential £300m disposal
Thursday 22 Nov 2018 Author: Lisa-Marie Janes

EI Group (EIG) 173.8p

Gain to date: 1.6%

Original entry point: Buy at 171p, 8 November 2018

We remain confident UK pub company EI Group (EIG) has more to offer following an encouraging set of full year results (20 Nov).

In a bullish announcement, EI says its strategic plan to revive its prospects after struggling with huge amounts of debt during the financial crisis is complete, citing ‘business as usual’.

EI is benefiting from its wet-led focus with like-for-like sales jumping 7.1% in its managed pubs division, marking an impressive acceleration from 2.4% growth last year.

The company is also faring well elsewhere with annual rental income increasing from £23m to £29m in the Commercial Properties division, which may be sold. Analysts think it could be worth £300m or more.

The majority of EI’s pubs fall under the Publican Partnerships division, which generated a 1.2% rise in like-for-like net income, down from 2.3% a year earlier despite growth across all regions.

Liberum analyst Anna Barnfather is encouraged by EI’s trading, flagging strong cash flow and another share buyback programme, while rapid deleveraging remains a realistic near term prospect.

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