Tuppen: Enterprise is secure
Enterprise Inns chief executive Ted Tuppen has insisted that his company's business model is "robust and secure" with more than 80% of its pubs producing earnings growth.
Tuppen's comments came after tenanted pubco shares had taken a particular battering on Monday amid fresh fears over the credit crunch and sector prospects.
Punch's shares tumbled by around 25% to hit £1.20, while Enterprise was down 18p to 157p in the wake of weekend press reports that Punch has 1,400 pubs to let.
Tuppen reported that 83% of Enterprise's tenanted pubs — those on substantive leases — had produced increased earnings this year.
He also said the queue of screened and funded applicants to take on Enterprise pubs now stood at 550, longer than earlier in the year.
The number of pubs to let also remained relatively low at 757 — less than 10% of the entire estate — with another 342 licensees looking to assign. He said: "Like all consumer-facing businesses, trading is very tough. I'm not trying to belittle how hard licensees have to work to stand still. But I'm confident the business model is robust and secure."
Tuppen revealed that Enterprise has spent an average of £4,000 per pub in supporting 1,300 of its licensees to overcome difficult trading in its second half.
A total of 850 pubs are currently receiving special help from Enterprise, two thirds of the help coming in discounts and one third coming in rent concessions.
Around 70% of those pubs that received special help from Enterprise traded through their problems.
Tuppen also revealed that the company would be telling the Business & Enterprise Committee review of the pubco/tenant relationship that Enterprise pubs that were re-let showed an average 12% to 15% increase in business the year after the new tenant arrives.
In the coming year, Enterprise would be spending nearly all of its £45m capital expenditure budget on small schemes to help boost pub profitability.
Tuppen said: "It's about helping our pubs make small changes to move into profitability." He admitted, however, that the company would be "re-focusing" the business on selling more bottom-end pubs.
Punch Taverns also moved to defend its business model.
A spokesman said: "Over 96% of our pubs are currently occupied, which is above the average for other comparable sectors.
"The number of vacant pubs is up a little on this time last year, but this includes assignments and is broadly in line with expectations."
