6 Sep 2018 15:00
6 September 2018
Ei Group plc
Trading update for the 47 weeks to 25 August 2018
Good trading across the business
Ei Group plc (EIG or Group), the largest owner and operator of pubs in the UK, today publishes a trading update for the 47 weeks to 25 August 2018. This update has been issued in conjunction with the launch of a £150 million unsecured bond offering and the tender in respect of its outstanding £97 million convertible bonds.
Publican Partnerships
We have seen good trading in the second half of the year to date, aided by the good summer weather and England's prolonged success in the FIFA World Cup. Our leased and tenanted estate has increased like-for-like net income growth to 1.3% in the 47 weeks to 25 August 2018, up from the 0.6% delivered in the first half of the year. We continue to invest in our leased and tenanted business in order to enhance estate quality and drive income growth and we are working closely with our publicans to mitigate cost pressures.
Managed Pubs
We have continued to convert selected pubs from our leased and tenanted business to our managed estate, which now comprises 354 pubs. This means we are on track to finish the current financial year with some 365 managed pubs, in line with our previous guidance.
Pubs that have traded as managed pubs throughout both the 47 weeks to 25 August 2018 and the prior comparable period delivered like-for-like sales growth of 6.6%, aided by our particularly strong performance from beer sales.
Commercial Properties
In line with our expectations, we have seen further growth in the number of properties trading on free-of-tie agreements. We now have 376 such sites and so have already achieved our previous guidance of 375 commercial properties by the end of the financial year.
Pubs that traded as commercial properties throughout both the 47 weeks to 25 August 2018 and the prior comparable period delivered strong like-for-like net income growth of 6.7%.
As previously stated, we are open to the opportunity to monetise the value of our commercial property portfolio. To that end, we have appointed Rothschild & Co to assist us explore various possible routes to optimise value. This may include the disposal of all or part of the portfolio.
Capital Structure
On 15 August 2018, in agreement with our bank group, we increased the size of our bank revolving credit facilities from £140 million to £150 million and extended the availability of the facilities from August 2020 to August 2022 on substantially the same commercial terms.
We have today launched an offering of £150 million unsecured bonds and a conditional tender offer in respect of the outstanding £97 million convertible bonds in advance of their maturity in September 2020.
Simon Townsend, Chief Executive Officer, commented:
"Trading performance has steadily improved throughout the year across all areas of our business. Our largely wet-led estate has benefited from the good summer weather and the successful FIFA World Cup underpinned by our continuing investment programme as we further evolve the profile of our portfolio to optimise returns.
We continue to manage our balance sheet obligations proactively to ensure that we are able to drive long-term growth in shareholder value."
Enquiries:
Simon Townsend, Chief Executive Officer: 0121 272 5000
Neil Smith, Chief Financial Officer: 0121 272 5000
Tulchan Communications, Jonathan Sibun/Peter Hewer: 020 7353 4200
The information contained within this announcement is deemed by EIG to constitute inside information as stipulated under the Market Abuse Regulation (EU) No.596/2014. By the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of the Company is Loretta Togher (Legal Counsel & Company Secretary).
Preliminary Results
The trading update is based solely on preliminary internal information used by management and is based on assumptions that are subject to inherent uncertainties. EIG's actual consolidated financial results for the period may differ from these preliminary calculated results and remain subject to our normal review and/or audit process, including any adjustments required to present this information in accordance with IFRS. Those procedures have not yet been completed. Accordingly, these results may change and those changes may be material. We caution that the foregoing information has not been reviewed or audited by our independent auditors and should not be regarded as an indication, forecast or representation by us or any other person regarding our financial performance for the period indicated.
Forward-looking statements
This announcement contains certain statements about the future outlook for EIG. Although we believe that our expectations are based on reasonable assumptions, any statements about future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.
Important Notice
This announcement does not constitute or form part of any offer or invitation to buy or sell, or any solicitation of any offer to purchase or sell any securities.
Any securities referred to herein have not been registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. State security laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act.