Enterprise to sell 500-600 pubs

Enterprise Inns said last week it plans to sell between 500 and 600 under-performing pubs in the current financial year.

The pubco said it had sold 579 pubs during the year to September 30 - which also saw pre-tax profits slide 16 per cent - generating proceeds of £166m and profits of £21m, net of disposal costs. Earnings generated by these pubs came in at around £12m, the group added.

"We expect our programme of selling non-core pubs top continue at a similar level [to 2009] during the coming year," it said in a statement.

Enterprise boss Ted Tuppen told City analysts that virtually all those of its pubs valued at £250,000 or less would be up for disposal.

The group said following a review of its 6,820 pubs it had written down the value of its pub estate by £103m - two per cent - to £5bn.

This figure raised a few eyebrows in the Square Mile, despite Enterprise noting that the revaluation included non-core sites, with some analysts suggesting privately this figure might have been on the low side. However, Tuppen said the figure was "prudent".

He also confirmed the group's sale and leaseback programme would continue for the foreseeable future. The auctions had proved "very successful", with 71 pubs sold and £114m raised. "We expect to offer a similar level of pubs in the coming year," he said.

His comments came as the group revealed it planned to sell the freeholds of 11 more pubs on December 7 through auctioneers Allsop then lease back the sites on 35-year leases.

The pubs - 10 in London including the Yorkshire Grey in Clerkenwell, and one, the Horse and Hound in Broadway, Worcestershire - will attract an annual rent bill of £785,000.

Based on previous auctions for Enterprise pubs this yield suggests proceeds of at least £11m, if the sale proves successful.