The Investment Column: Rosy prospects for Enterprise
Wednesday 19 November 1997
Enterprise's pre-tax profits, ignoring restructuring charges, rose 71 per cent to pounds 14.5m in the year to September. More importantly earnings per share, which more accurately reflect the underlying performance of the business, rose an impressive 26 per cent.
The acquisition of John Labatt's British pub interests and the west country pub group Discovery Inns were behind the strong growth. Both look great buys. By spending money sprucing up the estates and gradually disposing of the worst performers, average income per pub rose 9 per cent. And margins continue to rise as Enterprise spreads overheads over its larger portfolio.
Enterprise plans to continue the acquisition spree, aiming to double the size of its chain to around 2,500 pubs within five years. It can comfortably afford to spend another pounds 50m on purchases without having to call on shareholders for more cash and there are no shortage of targets. The brewers are still intent on running down their tenanted estates and plenty of smaller pub groups up for grabs. So far Enterprise has shown it has a keen eye for a bargain and as long as it can keep picking up purchases at a decent price its prospects look rosy.
The sort of returns being made from investing in managed pubs still look attractive compared to tenanted estates. However, the managed pub market is looking increasingly overcrowded and Enterprise's profits are less likely to be affected if the economy begins to slow.
ABN Amro Hoare Govett forecasts full year profits of pounds 20.5m, putting the shares on a prospective PE ratio of just 11. Enterprise's share price have risen sharply since the group floated at 145p two years ago, and closed up 0.5p to 261.5p yesterday. They still look good value.
Malaysia Airlines plane crash exposes alarming flaw in airline security: over one billion flights made last year without stolen-passport check
International Women's Day 2014: The shocking statistics that show why it is still so important
Teacher shows sex tape featuring herself to pupils during class by mistake
Swarm of killer bees sting woman 1,000 times
Dead woman's body found sitting in a car after six years after direct debits ran $54,000 bank account dry
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
- 1 International Women's Day 2014: The shocking statistics that show why it is still so important
- 2 Australian man Rod Sommerville reacts to bite from deadly snake by reaching for cold beer
- 3 Teacher shows sex tape featuring herself to pupils during class by mistake
- 4 Singapore sting: Sky-high prices are pushing locals to the edge of affordability
- 5 Swarm of killer bees sting woman 1,000 times
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...