Enterprise Inns has warned that its overall profitability is still being affected by the financial cost of supporting those of its lessees who are struggling to make ends meet.
In a pre-close trading statement issued today Enterprise said that its core estate "continued to demonstrate resilience in challenging trading conditions".
But the UK's second largest pubco said profits were being affected by what it called "the ongoing costs of discretionary financial support given to struggling licensees, business failures and temporary management agreements".
The group said it was encouraged to see the rate of business failures across its estate was slowing, "thanks to our successful programme of disposing of less viable pubs, together with some stabilisation in beer volumes, reports of improving food sales and an abatement of cost pressures on licensees".
The number of closed pubs on its books, not counting those due to be sold, currently stood at 90, while sold pubs amounted to 365 during the year.
The group expected a "small reduction" in the overall value of its pub estate when it is valued tomorrow (September 30), and that it was encouraged that valuers were seeing signs of a recovery in the property market for pubs.
Noting its £1bn bank debt, Enterprise said it was in an "ongoing dialogue" with its banks and advisers and remained confident that adequate debt facilities will be in place by the time of its next refinancing, expected to take place before the end of the next financial year.
As part of its debt reduction efforts Enterprise recently announced it would sell and then lease back seven pubs for a combined rent bill of just under £1m, realising - it hopes - up to £15m when the sites are sold at auction next month.
It currently leases a mere 181 pubs out of an estate of more than 7,000 units.
The group said that it had co-operated fully with the Office of Fair Trading's investigation into the pub trade following the recent BEC report, "providing evidence-based answers to the various questions that were raised.
"We understand that the OFT will be in a position to respond to the CAMRA super-complaint towards the end of October 2009," it added.
Enterprise publishes its results for the year to September 30, 2009, on November 17, 2009.