UK: Enterprise Inns continues to shed pubs
Enterprise Inns to sell more drinks-led pubs in 2011
One of the UK's largest pub companies, Enterprise Inns, has said that it plans to sell off up to 500 outlets in its current fiscal year in order to improve profits.
Enterprise sold 105 pubs for a total of GBP32m (US$51m) in the 16 weeks to 15 January, the on-trade giant said today (20 January). It plans to sell between 400 and 500 pubs for around GBP125m in its current year, to the end of September.
The group's announcement underlines the ongoing pressure on the UK on-trade. Enterprise said last year that it was paying GBP1m per month to support pub tenants in financial difficulty, and the company swung to pre-tax losses of GBP31m in its last fiscal year.
Enterprise sold off 579 pubs in its previous fiscal year, leaving it with an estate of 6,820 pubs valued at GBP5bn.
Heavy snow across the UK before Christmas hampered the company at the start of its 2010/11 year, wiping GBP2m off first-quarter profits. The company said that net income per pub fell by 1% for the 16 weeks to 15 January. Trading conditions for the rest of year are likely to remain "challenging", it added.
However, the group said that it remains upbeat about its full-year prospects. "Whilst the adverse weather has somewhat distorted performance statistics in the short-term, we remain confident that average net income per pub for the whole estate and like-for-like net income in the substantive estate will improve during the year."
The group added: "Strong cash generation from the business plus the benefit of strategic asset disposals have continued to drive our programme to reduce the level of borrowings under our bank facility."
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