Advice don't short20 May 2009 19:19
Including all the recent property write downs ETI still has a very good balance sheet and not only is it on course to have it's debt refinanced in 2011, it looks to reduce that debt further by then with no dividends to pay out. Credit suisse has an outperform rating with a price target of 224p (I think achieveable in the next couple of months). From a business point of view the pub tie keeps the most of the profits with the landlord itself even if it is a bit harsh on the licensees. They will all be much happier this summer when sales start to increase due to the weather and all the licensees will quickly forget about the pub tie. ETI will be back in the FTSE100 before you know it.