Enterprise Inns reveals intention to develop new food, sport or family pub concepts as profits fall
Reporting its preliminary financial results for the year ending 30 September, the Solihull-based company revealed earnings using the EBITDA measure had fallen to £340m, down from £366m in 2011.
The fall in earnings has resulted in a drop in pre-tax profits of £20m leaving the group with profit before tax and exceptional items of £137m.
However chief executive Ted Tuppen said the headline masked the full story which showed Enterprise Inns was continuing to improve trading performance despite the difficult economic climate.
“We are pleased to report significant progress in moving towards growth in net income despite a tough trading environment for our publicans and ourselves," he said.
"We continue to stabilise operating performance with total like-for-like net income across the entire estate reducing by only 1.2 per cent, or £5m, in the year to September 2012, compared with a fall of 4.3 per cent in the prior year."
Food, family, sport
As Tuppen revealed record-breaking rainfall had served to dampen any operational gain from the busy 2012 summer calendar, he once again repeated his belief that the Olympics had not resulted in any material trading boost for pubs and said it had actually led to a decline in beer volume sales.
The tenanted and leased operator also announced it expected to reach a natural limit for its 'Project Beacon' pubs within the next year. There are currently 254 pubs operating under a 'managed tenancy' agreement which allows for greater contact between the publican and the company.
While Enterprise Inns expects there to be a peak of around 300 'Project Beacon' venues, it said it would be turning its focus in 2013 to new concepts.
"We are extending the lessons learnt from Beacon to develop other concepts where food, sport or family are the more central elements of the pub offer, and we already have one trial site successfully operating a carvery concept," Tuppen explained.
Disposal
In the last year the company, founded in 1991, has continued to dispose of a number of its pubs with sales to St Austell, Brakspear and Fuller's among others.
301 properties were disposed of in the period netting proceeds of £208m which, alongside operating improvements, are helping to reduce the level of the company's debt, something Tuppen said he expected to continue.
"Over the next three years we expect the estate to reduce to approximately 5,200 pubs. Over the same period we plan to maintain our level of investment and spend approximately £180m to improve the quality of our estate," he concluded.
