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Tue 21st Nov 2017 - Ei Group reports 2.3% like-for-like net income increase, unveils ninth managed JV
Ei Group reports 2.3% like-for-like net income increase: Ei Group, the largest owner and operator of pubs in the UK, has reported like-for-like net income up 2.3% (2016: up 2.1%) for the year ended 30 September 2017. It reported net asset value up 5% to £3.13 per share (2016: £2.96 per share) underpinned by like-for-like net income growth, asset appreciation, cash generation and net debt reduction. Underlying Ebitda was £287m (2016: £292m), in line with expectations and reflecting the impact of planned disposals. Underlying profit before tax was £121m (2016: £122m) as interest savings from reduced debt broadly offsets reduction in Ebitda. Average net income per pub was up 5.0% to £79,600 (2016: £75,800). It reported it now has a high quality portfolio of 331 (2016: 273) properties generating net annualised rental income of £23m on assets valued at £271m, representing a yield of 8.4%. In its managed operations it reported performance on track with 226 (2016: 99) pubs trading within its 100% owned managed operations with 48 (2016: 28) trading within its Bermondsey operation and 178 (2016: 71) within its drinks-led Craft Union operation. Within its managed “joint venture” investments it reported “good progress” with 30 (2016: eight) pubs trading within its managed investments business with nine specialist partners. Simon Townsend, chief executive, said: “We are making good progress against the strategy we set out in May 2015, which represents the most effective means to unlock embedded value within our estate. We are delighted with the continued growth momentum in our leased and tenanted business, achieved within the regulatory framework of the Pubs Code. At the same time we are developing a quality commercial property portfolio and our managed operations and investments businesses are going from strength to strength. We are delivering on our plans for the transformation of the group and are now beginning to accelerate the execution of these plans as our financial metrics and balance sheet continue to strengthen. We are mindful of current economic and political uncertainty and the inflationary cost headwinds faced by our industry, notably the rising minimum wage and above inflation increases in business rates, but our flexible business model and robust financial position leave us well placed to succeed despite these conditions. The current financial year has started well and we are on track with our plans. We aim to deliver positive like-for-like net income growth in our leased and tenanted and commercial estates for the year ahead, and we are encouraged by the trading performance of our expanding portfolio of managed houses. As we enter the third year of our strategic implementation we are increasingly confident in the progress made with our operating divisions making good headway, our balance sheet and finances robust and our route to shareholder returns clear. This continued successful implementation of our strategy gives us the opportunity to announce a further £20m share buyback programme, consistent with our commitment to deliver long-term growth in shareholder value.”

Ei Group unveils ninth managed JV with Hush Heath partnership: Ei Managed Investments, the Ei Group business that invests alongside industry-leading managed house operators, has launched its ninth venture, Hush Heath Inns – a partnership with Hush Heath Estate. Hush Heath Inns’ first site will be The Ship Inn, in Rye, East Sussex. The site currently has ten bedrooms and will remain open until a refurbishment begins early in 2018. The Ship Inn, and future sites, will reflect the individual character of the location with Hush Heath wines and ciders featuring prominently throughout. As a hospitality business born out of its award-winning winery in Staplehurst, Kent, Hush Heath Estate has four pubs that “champion the county’s best food and drink”. Three of the pubs also offer boutique hotel rooms. The Balfour-Lynn family planted the first vines in 2002 and Hush Heath Estate has evolved to produce sparkling wines, still wines and ciders. The Balfour-Lynn family has appointed a new commercial director to support this venture; Ed Gardner was previously managing director of Corney & Barrow Bars. Nathan Wall, operations director for Ei Managed Investments, said: “Hush Heath Inns is an exciting venture for us in being a ‘pubs with rooms’ business and another venture outside of London.” Hush Heath Estate is a unique hospitality proposition with its focus around the winery and we look forward to working with the team.” Gardner added: “We are absolutely delighted to be working with Ei Managed Investments and taking on the Ship Inn, Rye. Ei Managed Investments, together with our leading premium English wine and cider estate is launching a broader ‘Pubs with Rooms’ business, which is a first in UK hospitality. We look forward to welcoming our guests who will be able to enjoy the finest local food and drink in a beautiful Sussex pub.” Ei Managed Investments other partners include Rupert Clevely, with Hippo Inns, Karen Jones, with Frontier Pubs, and Peter Borg-Neal, with Hunky Dory Pubs. Managed Investments has grown rapidly since its launch in May 2015 and there are now 32 pubs operating across the nine different ventures.

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