Enterprise set to slow pub closures

Enterprise Inns, which had 6,143 leasehold and tenant pubs at March 31, said it will continue to sell underperforming pubs but at more normal levels.

The Solihull-based group sold 131 properties in the six months to March, raising £89m and making a £10m profit on the disposals, although its net debt still stands at £2.9bn.

The sell-off has hit earnings at the group, with underlying pre-tax profits down 13 per cent to £64m and like-for-like net income across the whole estate dropping 1.6 per cent.The group said given current economic uncertainty it was still not appropriate to resume paying a dividend to shareholders.

Chief executive Ted Tuppen said the company had been subjected to “extremely challenging conditions” over the past four years, with cost pressures, consumer weakness and political interference among factors making life difficult for Enterprise and its publicans.

Over 94 per cent of net income comes from pubs let on substantive agreements and like-for-like income in these pubs is showing steady improvement at 1.5 per cent growth year-on-year, while the like-for-like decline in the total estate was an improvement on the five per cent decline in the same period last year.

There continues to be regional variations in performance, Enterprise said, with substantive like-for-like income growing at around two per cent in the Midlands and South, while the North has stabilised with flat sales during the period.

The group added that it had invested £39m in the period at more than 1,100 pubs. It has written down the value of pubs moved to assets held for resale by £16m

For the full year, it expects to deliver total sale proceeds of around £200m, followed by a further £150m next year.