Enterprise sees drop in rate of pub failures

The group, which has 7,138 leased and tenanted pubs worth a combined 5.3bn, said that net income per pub fell by 3 per cent in the six months to March 31, continuing the improving trend seen following last year's drop of 8 per cent.

While underlying earnings for the period declined to 204m from 226m a year earlier, Enterprise said it was hopeful that the forthcoming World Cup will enable licensees to generate extra business.

Enterprise said the rate of business failures was lower in the first half of the year compared with a year earlier, a trend which it expects to continue.

And the number of pubs under temporary management, where outlets are moved through a programme of refurbishment and relaunch, has reduced over the last year, declining from a peak of 218 last summer to 84 in March.

Solihull-based Enterprise, which is the UK's second biggest pubs group, said the half-year performance highlighted the "resilience" of the tied pub model, as well as the determination of its licensees.#

The Office of Fair Trading (OFT) recently gave the industry the all-clear following a "super complaint" from the Campaign for Real Ale about so-called beer ties.

The OFT found no evidence that "tied" prices - where pub companies compel tenants to buy drinks from them - were harming consumer interests, despite concerns over high rents and beer prices forcing landlords out of business.

Enterprise said it had developed a new range of lease and tenancy agreements which have been taken up by more than 1,300 existing and new licensees over the past 18 months.

This has included an option for release from the tie for wines, spirits and minerals, plus incentive discounts of up to 155 triggered by the achievement of pre-agreed volume targets.

The company is also planning to offer an inflation-linked lease agreement of 10 to 20 years, during which time there will be no rent reviews.