Enterprise Inns reports dip in earnings and sales
Profit before tax and exceptionals was £137m (2011: £157m) and revenue fell £19m to £692m. The company said like-for-like net income was +2.2% where publicans had been in occupation for over one year.
In the year, Enterprise made net proceeds of £208m from disposals and its sale and leaseback programme - it disposed of 301 sites, of which 199 were "unsustainable", generating net proceeds of £67m, while 102 were exceptional properties generating £117m at an average multiple of 14 times income. Strong cash generation reduced net debt by £266m to £2.7bn.
Meanwhile, bank financing has been extended to 15 June 2016 with a new forward start bank facility of £220m commencing on the expiation of existing facilities.
An investment of £63m was made in the pub estate during the year, and the firm said it plans a further £60m investment in the current year. The cost of temporary concessions for publicans reduced from £15m last year to £6m in 2012.
Enterprise said that as a result of its annual review of its estate, the value of the estate has been written down by £105m, or 2%, to £4.3bn.
Ted Tuppen, chief executive, said: "We are pleased to report significant progress in moving towards growth in net income despite a tough trading environment for our publicans and ourselves. We continue to stabilise operating performance with total like-for-like net income across the entire estate reducing by only 1.2%, or £5m, in the year to September 2012, compared with a fall of 4.3% in the prior year.
"Strong cash flows from operating activities and our successful disposal programme have helped to reduce total borrowings to £2.7bn, secured against assets valued at £4.3bn. Our exposure to the banking market reduced to only £310m and the market price of our bonds improved by an average of 21% during the year. The strong cash generative nature of our business has enabled us to agree a new forward start facility of £220m which extends the availability of bank funding through to 2016.
"Given the security of our funding position, we are now able to focus all efforts on continued operational improvement. Our first target is to achieve like-for-like net income growth for the entire estate before ultimately restoring the business to sustainable growth in earnings per share. In the meantime we will continue to use available cash to reduce debt as we aim to create value for our shareholders."
