Enterprise — trade stabilising

Enterprise Inns has reported that trading within its 7,100 pub estate "appears to be stabilising".

Average net income per pub across the whole estate is 3% down compared to a decline of 8% at the same period last year.

The company has also increased the percentage of its pubs let on substantive agreements from 82% to 86% of pubs.

Enterprise still offered rent concession and special discounts worth £7m in the first half of its financial year, which is broadly similar to last year.

However, the company reported that business failures were lower in the first half of the year compared with the same period last year. Demand for Enterprise pubs is currently up more than 100% over the same period last year.

Chief operating officer Simon Townsend said: "Even including the 568 new agreements that were signed by new and existing licensees during the first half, the average length of tenure in the substantive estate is over five years, confirming our view that the vast majority of our licensees are committed to their pubs and are working hard to remain successful during these difficult times."

Enterprise reported that the average value of its pub estate is currently £740,000. It had spent £27m on over 1000 pub projects during the first half of the year.

The company's disposal programme had accelerated with 261 pubs sold, generating a profit of £16m over book value.

During the year ending 30 September 2009, the EBITDA of these pubs was £4m.

Townsend said: "The key benefit for the business has been the removal of underperforming assets that take up a disproportionate amount of the ETI team resource. Our programme for disposing of underperforming pubs continues apace and we expect to generate proceeds of at least £140m by the year end."