If you want a company caught in the eye of the storm of falling property prices, sliding cash flow and hefty debt, then this pub group is a good candidate.
Enterprise Inns has total assets of £6.4bn resting on an equity base of £1.48bn. It owes its banks over £3.5bn and we have just heard from rival Punch Taverns how tough trading is for pub groups. The latter reported lower annual sales and scrapped its dividend.
Enterprise is valued roughly in line with net assets with the shares at 290p; that looks too high making the shares a candidate for selling short. At some point this business is going to have to be recapitalised to reassure the banks if economic conditions do not quickly improve.
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