Tuppen: we've seen off some pirates

Enterprise Inns is to wind down its Temporary Management Agreement (TMA) estate in the next 18 months after finding it cost more than expected at around £8m.

The company has been placing management firms in viable pubs to stop them closing with a view to re-letting them on optimal terms after a refurbishment - the cost has been around £35,000 a pub.

The TMA estate was launched a year ago and reached a peak of 218 pubs and is now reducing in size as pubs are let - it was at 183 pubs at the end of Septemebr and has come down to 168 pubs since.

Chief executive Ted Tuppen told analysts: "TMA worked well in terms of getting hold of pubs.

"But it cost us more money than we expected and took a while to get going.

"In the next 18 months it will be phased out - it served its purpose in the depths of recession."

Chief operating officer Simom Townsend said the TMA estate had worked in terms of re-letting pubs on "more optimal terms".

Enterprise said it had been receiving 30 applications a week to run its pubs despite negative publicity surrounding the sector.

The number of pubs receiving special help had reduced from an average to 800 in the past year to 700 at the year-end in September and 600 now.

It told analysts that within its 6,128 pubs on substantive agreement its earnings had reduced from £75,000 each to £73,000.

Tuppen said: "The core estate is still very strong."

He reminded analysts that the company had bought the best pubs of Whitbread, Courage and Grand Metropolitan in the period between 2000 and 2004.

Of the 11,000 pubs it had acquired, some 4,000 had been sold.

"We do have a tail but we have always been very conservative in the valuation of our pubs.

"The 368 pubs we sold last year were sold at a 6% profit over valuation."

further 44 pubs had been sold in the past six to seven weeks - "and we've made a profit".

He told analysts that average Enterprise pub earnings was £65,000 after all concessions, which amounted to a 9% return on average current pub value of £726,000.

The company is expected to sell between 400 and 500 pubs in the coming year.

Tuppen said that the company had the best quality pubs attracting the best quality licensees.

He told analysts to excuse his sailing analogy but that Enterprise sails "were reefed in, the boat is sound and not leaking, the crew was alive and it may be that we've seen off some of the pirates".