Investment case

Investment Case

Our key strategic objective is to optimise value for every asset in our portfolio through the evolution of our business, recruiting and retaining the best people, optimising returns from each asset and identifying the appropriate capital allocation to enhance returns. The Group will respond to changing markets, consumer needs and regulation and to best serve our publicans, employees and the communities in which they are based. 

The key components of our investment case are:

  • Leading operator of leased and tenants pubs in the UK with growing managed pubs and commercial property division
  • Highly cash generative, largely freehold asset-backed business
  • Clear strategy to deliver value for shareholders by optimising the value of assets in our portfolio
  • Secure capital structure comprising shares and primarily fixed rate debt
  • Experienced leadership team with a track record of delivering like-for-like income growth

The Group’s four Business Units are as follows:

Ei Publican Partnerships

Our leased and tenanted estate continues to be our core business and we strive to maintain our like-for-like net income growth by supporting publicans to continually grow their businesses. We pride ourselves on our ability to attract and retain new and experienced entrepreneurial publicans to run our pubs and continually reassess our offer to ensure that both the nature of our contractual agreements and the range of support we provide is competitive and impactful. Whilst we expect the size of our Publican Partnerships estate to gradually reduce, we will endeavour to continually improve its quality.

Ei Commercial Properties

The Group’s commercial property business manages a developing portfolio of assets which it leases to third parties on commercial property terms. The portfolio incorporates predominantly pub assets, which are let to tenants on a commercial free-of-tie basis and also assets that were previously pubs, now converted to an alternative use (such as a convenience store). Our tenants include household names as well as independent public house and restaurant operators.

We work alongside other business units in evaluating Group assets, identifying opportunities to optimise value by bringing assets into our commercial property portfolio. While this will often be by granting a lease on a free-of-tie basis, we also add value by obtaining planning consents and deploying development capital where there is opportunity to release the embedded value in properties through development.

As we have limited opportunity to influence the operation of these properties we do not see ourselves as long-term owners of such sites​.

A portfolio of 354 properties were sold in the year achieving their book value, demonstrating our strategy of realising value at the appropriate time.

Ei Managed Operations

The Group’s managed operations division takes advantage of the pubs in our estate that we believe have a significant upside potential being directly managed by experienced pub managers and pub operators.

We have two distinctive operating models to achieve the best results from every managed asset in our estate.

Craft Union Pub Company

At the Craft Union Pub Company, our philosophy is about putting brilliant pubs back at the heart of local communities. We believe pubs play a vital role in the lives of their customers and we are committed to nurturing this. Each of our pubs are operated by a local hero who ensures we serve each and every community with a well invested proposition that delivers sport, entertainment and quality brands with great value.

Bermondsey Pub Company

Bermondsey Pub Company is our business unit for operating our fully managed pubs. We are dedicated to giving our customers great service, good food and drink, and above all, fun times in any of our Bermondsey pubs, and are passionate about the great British pub being at the heart of every community. The principal format is our Meeting House offer, which attracts passing trade as well as locals through offering an informal and vibrant atmosphere. In these pubs, we work to ensure we recruit and train the best people to deliver our offer.

Ei Managed Investments

We have pubs in our estate where we believe there is a significant upside potential which has yet to be realised. We recognise that this is often due to the pub needing a specialist offering from an experienced operator in order to access the optimum value. For these sites, we are looking to partner with some of the best operators in the pub industry in order to tap into their expertise. We provide a good pipeline of sites, and the buying power and support of a large business, whilst they bring exceptional retail capability.

We now have eleven partnerships, mostly based in and around London, delivering various different retail offers tailored to their local markets.