Enterprise Inns slows pub disposal as profits drop

The Solihull-based operator revealed it had taken £168m in EBITDA earnings in the six months to 31 March, down from £179m in the same period 12 months ago - a drop of 6 per cent.

While like-for-like net income across its whole estate dropped by 1.6 per cent this was a better performance than a year ago when the leased and tenanted pubco reported a drop of 5 per cent in the same period.

Substantive​

The substantive estate, which is behind 94 per cent of the total income, saw its like-for-like net income rise by 1.5 per cent - an indicator Enterprise Inns said showed its progress.

Enterprise Inns also revealed regional disparity in its substantive estate performance with pubs in the South and the Midlands experiencing growth while trading was flat in the North.

Ted Tuppen, the founder of Enterprise Inns and chief executive, said the operational teams remained committed to returning the total estate to like-for-like income growth.

"We have been subjected to extremely challenging conditions during the past four years, with cost pressures, consumer weakness, political interference, pressure on asset valuations and the volatility of capital markets combining to make life difficult for ETI and its publicans."

"Throughout this period, we have remained committed to our strategy, consistently improved the quality of our pub estate and effectively managed our financial commitments whilst working hard to ensure that we attract, support and retain the best possible publicans to meet the challenges of the marketplace," he added.

Disposal slows​

Tuppen explained that the drop in profits was down in part to the fact it was operating a smaller estate and also due to costs incurred as a result of its sale and leaseback programme.

The operator revealed it had spent £39m in the six-month period on investment in its pubs and had raised £89m after costs from its pub disposal programme.

Enterprise Inns now plans to slow this programme having removed assets which it said did not 'fit the future profile of the business'. 1,045 pubs have been removed from the estate in the two years to 30 September 2011 and a further 78 sites have been disposed of since then.

Debt​

The company, formed in 1991, has been working to reduce its levels of bank debt and today reported reduced bank borrowings of £397m while confirming it had begun discussions with its bank to extend its relationship with a new facility and new financing from December 2013.