Ei Group's revenue bubbles higher as drinks sales rise

Ei Group on Tuesday reported a jump in interim revenue despite 'unprecedented political uncertainty' as drinks sales drove progress, while the company also announced its third share buyback programme of the year to date.

The pub company said that revenue for the six-month period ended 31 March came in at £353m, an increase of 7% compared to the same period the year before, as drink revenue climbed by 9% to £241m, sending operating profit up by 2% to £129m.

The company now has 419 managed pubs, up from 319 at the same point last year, a number which is expected to grow to around 460-470 managed pubs by the end of the company's financial year on 30 September 2019.

Simon Townsend, chief executive of Ei, said:"Despite an environment of unprecedented political uncertainty and inflationary pressure from increases in the national minimum and living wage, consumers continue to support their local pub. This consumer resilience, combined with excellent operational execution and effective capital investment, provides us with the confidence that we can maintain our growth momentum for the year as a whole, despite some challenging comparative trading periods ahead of us in June and July."

A sunny Easter weekend ensured that the second half of Ei Group's financial year "started well", leaving current trading in line with management's expectations.

The AIM traded company also said it is focused on debt reduction as its total property portfolio fell to 83 sites following the sale of 348 sites for £332.7m.

Further efforts stem from a £30m share buyback programme, which is in addition to the £55m-worth of programmes previously announced in this financial year.

"We have demonstrated our ability to grow value through the transfer of assets to their optimum use and then to unlock that value through monetisation providing evidence of our strategy in action. We are using the significant cash proceeds received from the transaction to accelerate our debt reduction plans and to deliver value to our shareholders," said Townsend.

While 22 more leasehold sites are earmarked for disposal the company plans to add a further 20-30 sites during the second half of the year and would expect to add 40-50 commercial properties to the portfolio each year for the foreseeable future as part of a strategy to rebuild its commercial property portfolio.

Ei Group's shares were up 4.57% at 219.60p at 0806 BST.