Enterprise 'sale and leasebacks finished'

Enterprise Inns has probably completed its sale and leaseback programme, having raised £274m through the sale of 176 pubs, according to house broker Deutsche Bank.

Analyst Geof Collyer estimates that the company has made a profit of £51m over book value having sold the pubs for an average of 15.3 times earnings.

He said: "For those concerned that Enterprise was selling off the crown jewels, we estimate that the sale and leaseback programme has sold off just 4.5% of the EBITDA in the 2009 financial year, but reduced the short-term bank debt by 27%.

"The profits from the sale and leaseback programme are equivalent to around 10p per share.

"We estimate that the net income from the sale and leaseback estate is at £19m-£20m."

Collyer added: "Having achieved its goal of reaching the May 2011 deadline ahead of schedule, we would be surprised if there were any more meaningful additions to the sale and leaseback programme."

He estimates the level of Enterprise's short-term bank debt should be comfortably below the £625m target set for May.

Collyer also makes a comparison between the quality of Enterprise and Punch pubs and suggests Enterprise's quality is set to remain ahead of Punch.

"We believe that Enterprise's estate quality and profitability is likely to remain ahead of Punch's despite the latter's dramatic restructuring (40% of the tenanted and leased estate is scheduled for disposal)."

Collyer is, however, now forecasting that Enterprise will return to like-for-like net income growth in the 2012 financial year and not this year.