Friday, August 05, 2011

Enterprise Inns: continued improvement in trading

This really should read more like:

Enterprise Inns: "clutching at straws" ('Where DID my share value go?')

Take it for granted that the trading statements of pubcos, and to be fair all plc's, are always designed to put as much polish as possible on figures no matter how dire, or rosy, they are at base.

Then bear in mind that Enterprise are mindful of the fact that even with their call for evidence closed the Business Innovation etc Select Committee has yet to pass judgement on the tied pub sector and may yet be influenced by news suggesting that the pubco 'business model' provides stability for pubs.

Looking at it like this Enterprise is squeezing optimism out of a black hole like Steven Hawking postulates radiation leaking out of the event horizon.

David Morgan points out the fundamental reality above: any improvements in income - however promising (and 1 percent is not) - are more than wiped out by increasing, upward spiralling, costs. Just watch those energy costs going sky high. Like all pubco's, Enterprise's retailer income is being squeezed, margins are only going down and this is not going to change in the foreseeable future as the economy depresses even further.

The cuts have not got near the bone yet and this parlous situation is only going to get worse, no matter how the figures are interpreted, no matter what upbeat statements are made, it's down, down, down - just like Enterprise's share price actually.

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