Enterprise edges to 'hard-won stability'

Enterprise Inns, the leased and managed pub group, has reported a 5% decline in like-for-like (LFL) net income per pub — but did not pay out a dividend despite achieving what it described as a "hard won stability".

Revealing its final results for the year ended 30 September 2010, Enterprise said that its pubs let on substantive agreements, which account for 89% of its estate of 6,820 pubs and 94% of revenue, had seen like-for-like net income drop by 2%. Last year the figure was -8%.

Ebitda before exceptional items was down from £450m to £405m and it delivered a profit before tax and exceptional items of £175m, down from £208m the year before.

Profit after tax £26m, up from £6m. Chief executive Ted Tuppen said: "We have delivered creditable results, hard won stability and genuine operational improvements in difficult circumstances.

"The economic environment is set to remain challenging and we do not underestimate the impact of the government's austerity measures and fiscal tightening which will affect both our licensees and their customers.

"However, the past year has demonstrated the resilience of the best pub operators in the industry and we believe that the profile of our estate, combined with the professionalism and flair of our licensees leaves us well placed to face whatever challenges the year ahead may bring.

"We remain confident that the business is in a sound position to deliver positive returns to shareholders over the medium term, including the resumption of dividend payments." Enterprise said that some 2,500 licensees, who have been in their pubs for more than five years, delivered net income declines of 2% during the year and that a similar number of licensees who have been in their pub for between one and five years saw net income grow by more than 2%.

It also revealed that some 200 licensees that had joined the company during the year were delivering income growth of 7% year on year - and that on the flipside 1,000 tenants on substantive agreements were seeing declines in the region of -19%.

The company expects to sell between 500 and 600 pubs in the coming year.