Enterprise Inns believes the coming year will be “difficult for some pubs”.

The pub giant said it remained cautious about prospects in next six to nine months as the impact of the smoking ban starts to change the sales mix in its estate.

Britain’s second largest pub operator said that food sales in its estate now accounted for one pound in every five spent at the bar – a rise of 13% - and there was room for optimism that people who had previously avoided smoke-filled pubs would become new customers.

However, Enterprise is concerned that the “value for money” pub food market may become overcrowded and is advising licensees to “do it really well or not at all” when it comes to grub.

Enterprise chief executive Ted Tuppen said: “In a challenging year for Enterprise and our licensees, the team has worked successfully to improve the quality of the pub estate, grow licensee profitability and deliver substantial growth in earnings and dividends.

The pub owner remains locked in talks with HM Revenues and Customs over a potential conversion to real estate investment trust status, which it is currently exempt from.

Enterprise 2007 highlights:

• As of 30 September 2007 Enterprise had 7,763 pubs in its portfolio valued at £5.7b (an average of £736,000 per pub)
  84% of the estate is let on long-term agreements
• Total sales for the year ending 30 September 2007 were £921m (2006: £970m).
• Enterprise disposed of 906 pubs in the year.
• Pre-tax profits fell from £415m in 2006 to £337m.
  

BBPA calls for beer tax freeze >>

Enterprise Inns REIT talks ongoing >>

Enterprise Inns mulls REIT as half-year turnover falls >>

Smoking ban the catalyst as pub market diversifies >>

Enterprise Inns >>

Ted Tuppen >>

By Christopher Walton

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