Market Report: Pub operator Enterprise Inns reassures investors

Enterprise managed to soothe shareholders’ anxiety with a solid trading statement.

Jamie Nimmo
Friday 12 February 2016 09:59 GMT
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Enterprise Inns sees net income grow by 1.6%
Enterprise Inns sees net income grow by 1.6%

Investors topped up on shares in Enterprise Inns on a day when markets trickled south, as the pub operator reassured investors concerned by its stretched balance sheet.

Enterprise, which has lost a third of its value this year amid a pub sell-off, managed to soothe shareholders’ anxiety with a solid trading statement.

The shares floated 1.05p higher to 73.8p as like-for-like net income in its leased and tenanted estate grew 1.6 per cent in the 19 weeks to 6 February.

Last week, analysts at Barclays warned that investors dumping high-yield bonds in the oil and mining sectors might also target Enterprise, which was named as the most vulnerable pub group because of its impending £350m debt refinancing.

Anna Barnfather at Panmure Gordon cut her target price to 100p, but said: “We believe that this solid trading and confirmation that transformation is on track should reassure the market in the short term.”

On another topsy-turvy day for markets, the FTSE 100 dived nearly 3 per cent in the morning before clawing back some of the losses to end the day down 135.33 points at 5,536.97. The usual suspects – miners, oil and bank stocks – littered the bottom of the Footsie.

Broker JP Morgan rubbed salt into Standard Chartered’s wounds by cutting its target price on the bank, one of last year’s worst performers, by 145p to 725p. The downgrade, along with the general sell-off, knocked 20.75p off the stock at 386.65p.

Investors rushed to the safe haven of gold, with Randgold Resources soaring 430p to 6,130p, strengthening its position as the year’s top blue-chip performer.

Sweetener maker Tate & Lyle left a sour taste in investors’ mouths when it warned on annual profits. Shares in the FTSE 250 company plunged 41.5p to 540p as it told shareholders pre-tax profits would be below the £184m it made last year, with currency movements in Latin America to blame.

Elsewhere, Pinewood, the film studio under attack from activist investor Crystal Amber, edged up 1p to 537.5p as it emerged that the fund had increased its stake to 6.35 per cent.

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