Simon French at Panmure Gordon looks ahead to Enterprise Inns’ full-year results next Tuesday (19 November), saying that he believes it will have struggled to reach its Q4 like-for-like target for profitability.
French, of Panmure Gordon, reiterated his Hold recommendation for Enterprise and 123p Target Price.
He said: “We think the group will have struggled to reach its Q4 like-for-like profitability target given most companies saw weaker demand following a strong July-August. As such we have reduced our earnings forecasts by c2% per annum over FY 2013-15E. For FY 2013E consensus forecasts are for c£120m PBT and we are now in-line with consensus. This leaves the stock trading on a CY 2014E adjusted EV/EBITDAR of 10.1x.”
French added: “Q1 performance last year was impacted by inclement weather and the collapse of Waverley, the drinks supplier. We therefore see scope for a strong start to the year.
“In addition Christmas Day falling on a Wednesday is about as good as it gets for the licensed retail trade. We also expect the increase in Category C gaming machine prizes to £100 in January to drive machine revenue growth over the next 18 months. We expect the group to be a modest beneficiary of the FIFA World Cup in Q3/Q4.”
