Enterprise reveals details of new lease agreements
Pubco giant Enterprise Inns has revealed details of new lease agreements which will include free-of-tie options and no rent reviews.
The new deals, which will come into play in July, were revealed in a trading statement showing Enterprise's results for the first six months to March this year.
The statement said the "ETI business model has continually evolved" and that over the last 18 months 1,300 licensees have taken on new, flexible agreements.
Terms include incentive discounts and options to go free-of-tie on bottled beers and ciders and a free-of-tie guest ale option for locally sourced ales.
According to the statement the new deals will go even further.
It said: "We will from July this year be offering an entirely new RPI-linked lease agreement of 10 to 20 years, during which term there will be no rent reviews."
It adds: "The range of discounts available for beer and cider will be increased to a maximum of £155 per barrel where appropriate, in line with our free-of-tie pricing."
Elsewhere the company states that in the first half of the year it sold 261 pubs, along with other assets, for £86m - generating £16m in profits.
Enterprise has also reduced its bank debt by £10m to £792m. Profit for the first half before tax was £91m and earnings per share was 12.6p.
Chief executive Ted Tuppen said: "In the face of very challenging trading conditions across the pub sector, these are solid results which reflect the quality of our pub estate, the reslience of the leased and tenanted pub model and, above all, the skills and determination of our retail partners and the Enterprise team.
"We have a robust balance sheet, a secure, flexible and tax efficient debt structure and we continue to generate strong operating cash flows, enhanced by our successful programme for disposing of underperforming and non-core pubs.
"We are pleased to have renewed our bank facility with our existing club of banks on terms which fairly reflect current market conditions.
"We expect trading conditions to remain challenging during the second half of the year and we sincerely hope that the new government will take steps to recognise and support community pubs and their vital role in British society."
