Enterprise Inns sees fall in net income

The fall in average net income in Enterprise Inns' pubs has eased to around 4%, the company said in a trading update today.

Enterprise said that last year average net income dropped by 8%, but disposals of underperforming pubs had helped to stem the fall in income.

The news came as the company revealed that trading in the 16 weeks to 16 January had been "variable". While "generally strong" Christmas trading providing a welcome uplift in sales to many licensees, the poor weather caused trouble for others.

Enterprise said it had substantially reduced the number of pubs holding over, pending legal action, or operating under temporary management agreements, although this had resulted on many pubs being occupied by licensees on short term tenancy agreements. The number of closed pubs in the estate has remained "broadly constant".

During the period Enterprise said it had completed the sale of 103 pubs for £32m. Contracts have also been exchanged for the sale of 34 pubs for £15m and a further 95 pubs, with expected proceeds of £32m, are in the hands of solicitors awaiting exchange of contracts.

The company has also had 20 London pubs auction for net proceeds of £39m as part of a sale and leaseback deals, based upon 35-year, non-index linked leases at an average rental cost of 6%.

Enterprise will announce interim results for the 26 weeks to 31st March 2010 on 11th May 2010.

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By Neil Gerrard

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