Trading is 'stabilising', says Enterprise Inns

Enterprise Inns said today that trading across its pub estate was continuing to stabilise, aided by the help of "reasonable weather" and the recent World Cup tournament.

Average income per pub was currently two per cent down year-on-year, the pubco said, and 86 per cent of the estate was on substantive agreements, representing 93 per cent of the group's net income.

"We anticipate that this percentage will increase in the run up to the year end. Pubs let on substantive agreements continue to perform well, with like-for-like income per pub for the year-to-date down by less than two per cent compared to the same period last year," the group said in an interim management statement.

Enterprise said the level of closed or short let pubs "remained constant" but that only 55 pubs were operating under temporary management agreements. The group said it hoped to reduce this to zero by the end of the financial year, which comes next month.

In an effort to tackle its debt pile Enterprise was continuing to sell off non-core pubs or sell and leaseback sites.

The group said it had sold 402 pubs, generating £124m-worth of proceeds, with a further 102 pubs were in the process of being sold for a total figure of £29m.

Such sales were "significantly ahead" of their book value, Enterprise claimed.

Meanwhile the group's policy of selling pubs at auction and then leasing them back had generated £110m. So far 69 pubs had been sold and leased back, achieving an average yield of 6.4 per cent, , Enterprise said, while a "few more pubs" would be sold via this method before the end of the current financial year.

The pubco said it would be looking to a similar number unviable pubs and pubs through a sale and lease back programme in the next financial year, as it battled to reduce debt and "improve the overall quality of the estate".

Finally Enterprise said it had enhanced its code of practice, which had recently been accredited by the BII, and a series of new rent agreements were being rolled out.

Some of these offer increased levels of discounts on beer as well as free-of-tie options on locally-brewed cask ale, bottled beers, wines and spirits, although the pubco said these options would be reflected in the level of rent charged to its licensees.

Despite this, Enterprise claimed the new deals would "give licensees greater choice in developing a business model which most closely aligns with their particular business plan" and that such arrangement had been "well received across the industry".