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Preliminary Results 30 September 2008. VISIT OUR WEBSITE www.enterpriseinns.com. Financial highlights 12 months to 30 September 2008. EBITDA reduced by 3% to £512m Profit before tax and exceptional items fell by 13% to £263m Adjusted earnings per share down just 1% to 39.2 pence

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slide1

Preliminary Results

30 September 2008

VISIT OUR WEBSITEwww.enterpriseinns.com

financial highlights 12 months to 30 september 2008
Financial highlights12 months to 30 September 2008
  • EBITDA reduced by 3% to £512m
  • Profit before tax and exceptional items fell by 13% to £263m
  • Adjusted earnings per share down just 1% to 39.2 pence
  • Full year dividend up 4% to 16.2 pence
  • Flexible financing structure in place
three pronged financing flexible debt structure
Three pronged financingFlexible debt structure

£m

Bank debt

Corporate bonds

Securitised bonds

three pronged financing loan to value at 64
Three pronged financingLoan to value at 64%

£m

Gross debt

Pub value

Gross debt

Pub value

Gross debt

Pub value

Bank debt

Securitised bonds

Corporate bonds

eti pub value headroom pub value headroom of 17
ETI pub value headroom Pub value headroom of 17%

£m

Pub value secured against debt

Headroom

Gross debt

Gross debt

Gross debt

Bank debt

Corporate bonds

Total ETI

  • No pub value covenant in the securitised bonds
bank debt headroom of 94m
Bank debtHeadroom of £94m
  • * Additional borrowing of a further £100m allowed under the bank facility
bank debt comfortable covenant headroom
Bank debtComfortable covenant headroom

* EBITDA includes dividends from Unique of circa £70m per annumCovenants tested semi annually on a MAT basis

corporate bonds flexibility to match actual leverage to covenant
Corporate bondsFlexibility to match actual leverage to covenant
  • Post substitution of pubs
  • Pubs withdrawn or introduced as necessary to ensure covenant compliance
  • Covenants tested annually on a MAT basis
securitised bonds 115m of debt prepaid
Securitised bonds£115m of debt prepaid
  • Next mandatory repayments: June 2010 £2m, Sept 2010 £7m.

£m

A4

£535m

A2N

201m

A3

£435m

securitised bonds significant liquidity and headroom on covenants
Securitised bondsSignificant liquidity and headroom on covenants
  • Covenants
  • Liquidity
    • Liquidity facility - £190m
    • Cash balance of £89m at 30 September 2008
  • No pub value covenant
  • DSCR cash trap test at 1.5x
  • Covenants tested quarterly on a MAT basis
group financing flexible financing structure
Group financingFlexible financing structure
  • 3 prongs provide flexibility
  • 89% of debt is fixed at 6.5% for an average of 10 years
  • Net debt at 64% of freehold estate value
  • Fixed charge cover at 2.1 times is comfortable
  • Significant headroom to financial covenants
  • Debt reduction programme in place
operating highlights 12 months to 30 september 2008
Operating highlights12 months to 30 September 2008
  • Group EBITDA of £512m, operating cash inflow £536m
  • Solid performance in a tough market
  • Increased support for licensees through discounts and concessions
  • Average EBITDA per pub up 2% in 82% of estate let on substantive agreements
  • £68m capital expenditure invested into the estate
  • 58 high quality acquisitions for £48m
  • Surplus land, underperforming & HAUV pubs sold for £30m
top quality pub estate enterprise secured the best available pub assets
Top quality pub estateEnterprise secured the best available pub assets
  • Historic cost includes post acquisition capital expenditure
capital investment consistent investment targeting 12 return
Capital investmentConsistent investment targeting 12% return

* Value of projects completed £75m, cash paid out £68m.

acquisitions disposals effective estate churn
Acquisitions & disposalsEffective estate churn
  • FY06 excludes sale of 769 pubs to Admiral Taverns for £318m
  • FY07 excludes sale of 137 pubs to Retail & Licensed Properties Ltd for £115m
estimate of potential licensee profitability
Estimate of potential licensee profitability

Source: Estates Review – completed September 2008

estimate of potential licensee profitability28
Estimate of potential licensee profitability
  • * Excludes 66 pubs, the majority of which are closed pending disposal

Source: Estates Review – completed September 2008

estimate of actual licensee profitability
Estimate of actual licensee profitability

Source: Estates Review – completed September 2008

licensee profitability what s it really like out there
Licensee profitabilityWhat’s it really like out there?
  • 7,161 enquiries converted to 1,566 formal applications
  • 577 fully screened applicants on the database
  • 80% of estate let on long term assignable leases
  • 483 lease assignments, average premium £63k (£79k including tenants fixtures and fittings)
  • Rent concessions increased to 2.1% of rent roll at the year end
  • 915 rent reviews were completed at an average annual increase of 2.2%
  • Overdue balances at less than 1% of turnover, bad debts low at 0.1% of turnover
plan for 2008 09
Plan for 2008-09
  • Maximise pub estate potential
  • Support licensees as appropriate
  • Minimal acquisitions
  • Return to normal levels of capital investment
  • Accelerate the disposal programme
  • Manage cash flows and debt profile
summary
Summary
  • 1% decline in adjusted earnings per share
  • Best quality pub estate
  • Tenanted model remains robust and fair
  • Strong cash generation
  • Debt reduction programme in place
  • Well placed to benefit from recovery
slide33

QUESTIONS

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