Enterprise Inns claims trade is "stabilising

Enterprise Inns said today the underlying trading performance of its 7,000-plus pubs "appears to be stabilising", despite financial support for troubled sites rising to around £1.7m a month

In a trading update issued today Enterprise said the rate of decline in beer sales was reducing and that the 6,100 of its sites let out on substantive agreements - 81 per cent of its estate - were delivering net income down by less than three per cent year-on-year.

Pubs that are shut and due to be sold number just over 100, the group said.

There had been a "significant reduction" in the number of pubs operated under temporary tenancy agreements, it added.

Around 800 licensees currently receive rent concessions and special discounts under the group's Business Recovery scheme, Enterprise said, with more than 200 pubs operating under our Temporary Management Agreement (TMA) scheme. Short term management and administration costs incurred under the TMA scheme had stabilised at around £0.7m per month.

"Our increased level of support for licensees has reduced the rate of business failures, which are nonetheless occurring at a rate some 50 per cent ahead of last year and are costing close to £2m per month in lost income," Enterprise said in its statement.

The group said it had sold 277 pubs for a gross consideration of £84m, generating an unstated profit over book value after taking account of costs of closure and disposal. In the full year to September 2008, net income from these pubs was £7 million.

Enterprise said it expected to generate sale proceeds "in excess of £100m this year and again next year".

The group said it intends to refinance its existing bank facilities before the end of the next financial year and "remains confident that adequate debt facilities will be available at the time of our refinancing".

Enterprise has a bank facility of £1bn which is due for renewal in 2011.

Referring to the BEC report, Enterprise said pub owners and brewers were "individually are engaged at many levels with government to ensure that the importance of the British pub in our communities remains high on the agenda and that the relationship between pub owners and licensees is balanced, fair and transparent and continues to evolve in a way which ensures vibrant competition, wide choice and fair prices for consumers".