Thursday 21 September 2017 by FIIG Research Company factsheets

Ei Group PLC GBP 6.875% 9-May-25 secured notes Factsheet

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Ei Group PLC GBP 6.875% 9-May-25 secured notes 

Ei Group plc (formerly Enterprise Inns plc) is the largest pub company in the UK, with 4,283 properties as at 31 March 2017 that are predominantly run as leased and tenanted pubs. The company aims to partner with entrepreneurs passionate about pubs, by granting leases and tenancies to the best publicans and recruiting high quality, commercially minded managers for its managed pubs, as well as collaborating with experienced experts in the pub industry.

Ei Group has a team of over 500 people dedicated to supporting and empowering our publicans to run great pub businesses. Ei Group employs all staff in the group and manages all of the operations, supply contracts and trade invoicing to publicans in its name.

The business has historically focused on leased and tenanted pubs. In response to the changing industry landscape and specifically, the new Pubs Code, which introduced a Market Rent Option (MRO) under which tenants of large Pubcos are free to purchase beer and products on the open market rather than through the tie to the Pubco, Ei Group launched a new strategy in 2015 establishing four business units including commercial property, managed operations and managed investments to optimise its positioning to the realities of the modern market.

The following four business units have been created within Ei Group to facilitate asset optimisation. Ei publican partnerships tasked with managing a smaller, higher quality estate of leased and tenanted pubs using new style tenancy agreements that try to mitigate MRO risks. Ei commercial properties which lease assets to third parties on commercial property terms (free-of-tie), mostly independent pubs and often with a development angle. Ei managed operations uses the Bermondsey (mainstream) or Craft Union (community, wet-led with a sports focus) models to optimise the pubs in the estate where direct management can create upside. Ei managed investments work with specialist operators to release value. These include Hippo Inns with Rupert Clevely, Mash Inns with Laine Pub Group, Frontier Pubs with Food & Fuel, Hunky Dory Pubs with Oakman and Marmalade with Marylebone Leisure Group.

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