Enterprise Inns has revealed that continued financial support for struggling pubs is draining its overall profits but the rate of closures is slowing.
In a pre-close trading statement, the pubco said its core estate has demonstrated resilience during tough trading conditions but profitability has been hit by financial support for struggling licensees, business failures and temporary management agreements.
However, Enterprise said it was encouraged to see the rate of business failures dropping “thanks to our successful programme of disposing of less viable pubs, together with some stabilisation in beer volumes, improving food sales and an abatement of cost pressures on licensees”.
This year, Enterprise, which has around 7,500 leased and tenanted pubs, has disposed of 365 mainly “poorer quality” pubs and the number of closed pubs stands at 90.
The group expects a “small reduction in overall values” when it is independently valued tomorrow but added that it is encouraged by reports that “pub values may now be stabilising and demand for good quality assets is increasing”.
It added that there had been no material change in its trading performance since July while chief executive reportedly told information service provider Reuters he agreed with forecasts for full-year pre-tax profit of £210m - £216m.
Enterprise’s full year results for the year to 30 September will be released on 17 November 2009.
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By Emma White
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