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Ei Group reports static LFL profit but steady growth across leased & tenanted estate

Ei Group plc (EIG or Group), the largest owner and operator of pubs in the UK, has today announced its interim results for the six months ended 31 March 2017.

Underlying EBITDA stood at £140m (H1 2016: £142m), in line with expectations and reflecting the impact of planned disposals,

Underlying profit before tax came to £57m (H1 2016: £57 million) as interest savings from reduced debt offset reduction in EBITDA.

Publican Partnerships, the reinvigorated tied leased and tenanted business showed continued momentum with like-for-like net income up 1.6% (H1 2016: up 1.8%) and growth delivered across all geographic regions.

For Commercial Properties, like-for-like net income was up 1.1% (H1 2016: 6.3%) reflecting changes in estate composition, with future like-for-like net income growth expected to normalise in line with inflation.

The portfolio has expanded with 304 commercial properties at 16 May 2017 at an improved average annualised rental income per property of £66k (H1 2016: £59k).

The firm has disposed of 18 commercial properties generating £20m net representing a 15% premium to the prior year-end book value and a gross yield of 6.57%.

There are 161 pubs trading within the 100% owned Managed Operations business, with 39 trading in the Bermondsey Pub Company and 122 in the Craft Union Pub Company.

There are 24 pubs trading within the Managed Investments business unit, operating through trading agreements with seven managed partners.

Simon Townsend, Chief Executive Officer, said, “We are pleased to have maintained the growth momentum in our leased and tenanted estate while making significant progress in building our commercial property portfolio and managed businesses. Our transformation of the Group remains on track.

'Trading in the first six weeks of the second half of the year has been strong, assisted by the timing of the Easter holiday period. We expect our trading performance to reflect more challenging comparatives in June and July as we benefited from the UEFA Euro football championship last year. We are mindful of the potential for continuing economic uncertainty over the coming months, and remain vigilant regarding possible headwinds from the Pubs Code depending upon its interpretation and application.

'Whilst taking into account these factors, we are confident that we will continue to deliver positive like-for-like net income growth in our leased, tenanted and commercial estates for the full year, we are encouraged by the trading performance of our expanding portfolio of managed houses, and we remain committed to the successful implementation of our strategic plan to deliver long-term growth in shareholder value.”