Since the pubs code came into force in July, Enterprise has had 94 approaches from publicans for an MRO quote out of 285 potential MRO trigger events. At present, the company said that all of the requests are under review but none have yet been granted.
On the pubs code, the group said: “The impact of MRO is expected to take effect over five years, as MRO trigger events are largely expected to arise through the cycle of five yearly rent reviews and agreement renewals, which apply only to our leases.
“As such, since the concept of MRO agreements was first announced in November 2014, we have worked hard to reduce our exposure to such longer-term leases and increase the proportion of our tied business operating under shorter-term tenancies where rent reviews and renewals do not apply.
“As at November 2014 we had 3,035 long-term lease agreements and this has reduced by 634 to 2,401 as at 30 September 2016.”
Transformation remains on track
The news comes as Enterprise revealed its preliminary financial results for the financial year up to the end of September.
Enterprise Inns chief executive Simon Townsend said the group’s “transformational strategy” remains on track as it evolves its managed business and drives like-for-like growth in its tenanted and leased estate.
The results showed revenue up to £632m from £625m last year for the pub company.
Townsend said: “We laid out some ambitious plans in terms of the growth in our managed and commercial property businesses and the past year has seen us lay some really important ground work.”
Expansion for Craft and Bermondsey
He said the next year would see its 75-strong Craft Union model expand across the UK with a simple food offer added to the format. The predominantly north of England-based division is expected to roll out nationally over the next year, with a target of 170 sites by the end of this financial year.
Townsend said further operating formats would also be added to the Bermondsey estate, after dropping its fledgling Friends & Family model. As of today Enterprise operates 30 pubs under the upper mid-market Meeting House format. It expects to have in the region of 50 Bermodsey pubs by the end of the financial year.
There are currently 11 sites operated under joint ventures with established ‘managed experts’ including Geronimo Inns founder, Rupert Clevely. Enterprise expects to have 30 pubs operating with ten partners by September 2017.
Tenanted and leased estate
Meanwhile, the company's 4,470-strong tenanted and leased estate saw total net income rise 2.1% in the year.
Enterprise’s estate is divided into three regions – North, Midlands and South. The former, which constitutes 1,261 pubs saw its first growth in several years with net income up 1.1% to £89m. The 903 pubs in the Midlands 1.7% growth to £61m while the South’s 2,306-strong estate was up 2.7% to £188m.