Enterprise profits slip on tough trading conditions

16 November 2010 by
Enterprise profits slip on tough trading conditions

Pub company Enterprise Inns has seen pre-tax profits for the year to 30 September 2010 fall 15% to £175m (£208m) as it continues to grapple with tough economic conditions.

But average net income per pub remained broadly stable in the second half of the year and stood at £63,900 for the full year, down around 2% on 2009, when it was £65,000.

Meanwhile, like-for-like sales in the company's ‘substantive estate', which accounts for licensees on longer-term leases and makes up 94% of Enterprise's total net income for the year, was down by 2%, compared with 3% in the previous year.

Chief executive Ted Tuppen said: "We have delivered creditable results, hard-won stability and genuine operational improvements in difficult circumstances. The economic environment is set to remain challenging and we do not underestimate the impact of the Government's austerity measures and fiscal tightening, which will affect both our licensees and their customers.

"However, the past year has demonstrated the resilience of the best pub operators in the industry and we believe that the profile of our estate, combined with the professionalism and flair of our licensees, leaves us well placed to face whatever challenges the year ahead may bring. We remain confident that the business is in a sound position to deliver positive returns to shareholders over the medium term, including the resumption of dividend payments."

Enterprise's pub estate now comprises 6,820 pubs valued at £5b, an average value of £732,000 per pub. The company sold 579 "non-core pubs" during the year, generating proceeds of £166m and a profit of £21m. It said that its programme of disposals would continue. It also sold 71 pubs on a sale and leaseback basis on 35-year leases, where it retains operational control. The process generated proceeds of £114m at an average rental yield of 6.4%. Punch said it expected to offer "a similar level of pubs" under its sale and leaseback programme in the coming year.

Net debt at the company as at 30 September 2010 was also down to £3.3b compared with almost £3.7b at the beginning of the financial year.

Enterprise Inns fined £300,000 after tenant's death >>

Enterprise Inns refinances as income per pub decline slows >>

Enterprise Inns makes good progress in shedding underperforming pubs >>

By Neil Gerrard

E-mail your comments to Neil Gerrard here.

If you have something to say on this story or anything else join the debate at Table Talk - Caterer's new networking forum. Go to www.caterersearch.com/tabletalk

Caterersearch.com jobs

Looking for a new job? Find your next job here with Caterersearch.com jobs

[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

close

Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking