Enterprise Inns making 'excellent progress' in selling off pubs

In a pre-close statement which was described by one City analyst as "extremely vague", Enterprise Inns said it was making "excellent progress" in selling off its under-performing pubs.

In what is apparently the last pre-close trading update the pubco intends to issue, Enterprise said there had been "no material change" in the group's performance since January, when it published its most recent interim management statement.

Back at the start of 2010 it had said the decline in average net income per pub has eased to around four per cent over the Christmas and New Year period, having fallen by eight per cent during the last financial year.

Today Enterprise said the proportion of its estate let on substantive agreements had increased - although it did not mention a figure of those so let - "and trading in these pubs remains relatively stable. We have made excellent progress disposing of underperforming pubs which do not fit the future profile of the business".

Although it gave no further details, City types were encouraged by what they saw as "movement in the right direction". Average pub profitability "should be stabilising," said one.

Enterprise said it was continuing to offer financial support to licensees "who find themselves in difficulty and are encouraged that, whilst the total cost of this support, business failures and temporary management agreements remains above the corresponding level last year, these costs are reducing".

The group took a pop at the government over its support for the UK on-trade, noting the Minister for Pubs' £4.3m package of measures over the next three years "compares poorly with the £20m we spent supporting deserving licensees last year alone and pales into insignificance when set alongside the extra £160m beer duty burden imposed by the Chancellor in his latest Budget".

With debt on many people's minds, Enterprise said its own borrowings were being reduced through what it called "strong cash generation from the business and the proceeds from asset disposals".

On the issue of its refinancing, due to be implemented next year, the group reiterated what it has said in previous statements: "Based upon discussions with our banking group and input from our advisers, the board remains confident that adequate banking facilities will be available at the time of our refinancing, which we expect to be concluded before the end of the financial year.

Enterprise also noted it intended to change its financial reporting calendar and had decided to update the market four times a year, with interim results in May, preliminary results in November and interim management statements in July and January. "Accordingly, the group does not expect to release pre-close statements in future," it concluded.