Enterprise Inns has become Britain's third biggest pub company with the purchase of 439 managed houses from Morgan Grenfell Private Equity for £263.5m, taking it to around 3,015 pubs.
The pubs, mostly unbranded, are part of the estate of almost 3,000 houses MGPE, part of Deutsche Bank, bought from Whitbread for £1.63bn in March. The average price is £600,000 a pub, against the £540,000 per pub average that MGPE paid Whitbread. Enterprise said the deal would be paid out of borrowings.
Enterprise will now turn them into tenancies and leases, believing, according to the company's chairman, Hubert Reid, that they can be operated more profitably that way than as managed houses. The company said the deal will generate extra revenues of more than £30m a year. The company's chief executive, Ted Tuppen, said buying the MGPE pubs still left Enterprise
with a "comfortable" £200m to £300m in cash to make further acquisitions, Tuppen said.
Enterprise said it was negotiating another possible acquisition, believed to be part of the 600 to 700 pubs Scottish & Newcastle.
The announcement came as Enterprise reported a 16% rise in its first half profits. Pre-tax pre-exceptional profits for the six months to March 31 were £26.4m, up from £22.7m a year earlier, as sales rose 21.5% to £91.5m from £75.3.
Reid said that an 8% increase in average income per pub helped the company grow its operating profit before exceptional items to £41.9m.
Enterprise intends to spend about £20m on organic growth in the year to September 2001. As of March 31, 2001, the company had 2,574 pubs, down slightly on the 2,580 it had on September 30, 2000. The company purchased 76 new establishments in the period but sold 82. Tuppen said: "We have a constant programme of churning the estate and we expect to buy and sell between 150 and 200 pubs a year."
It spent a total of £20.6m in the year ended September 30 2000, to upgrade and refurbish its pubs. In the first half of the current fiscal period, the company has spent £11.4m.
Adjusted EPS for the half year before exceptional items was 24.4p, up from 19.2p. The Enterprise board is recommending an interim dividend of 4.1p, up from 3.6p a year earlier.
The pubs, mostly unbranded, are part of the estate of almost 3,000 houses MGPE, part of Deutsche Bank, bought from Whitbread for £1.63bn in March. The average price is £600,000 a pub, against the £540,000 per pub average that MGPE paid Whitbread. Enterprise said the deal would be paid out of borrowings.
Enterprise will now turn them into tenancies and leases, believing, according to the company's chairman, Hubert Reid, that they can be operated more profitably that way than as managed houses. The company said the deal will generate extra revenues of more than £30m a year. The company's chief executive, Ted Tuppen, said buying the MGPE pubs still left Enterprise
with a "comfortable" £200m to £300m in cash to make further acquisitions, Tuppen said.
Enterprise said it was negotiating another possible acquisition, believed to be part of the 600 to 700 pubs Scottish & Newcastle.
The announcement came as Enterprise reported a 16% rise in its first half profits. Pre-tax pre-exceptional profits for the six months to March 31 were £26.4m, up from £22.7m a year earlier, as sales rose 21.5% to £91.5m from £75.3.
Reid said that an 8% increase in average income per pub helped the company grow its operating profit before exceptional items to £41.9m.
Enterprise intends to spend about £20m on organic growth in the year to September 2001. As of March 31, 2001, the company had 2,574 pubs, down slightly on the 2,580 it had on September 30, 2000. The company purchased 76 new establishments in the period but sold 82. Tuppen said: "We have a constant programme of churning the estate and we expect to buy and sell between 150 and 200 pubs a year."
It spent a total of £20.6m in the year ended September 30 2000, to upgrade and refurbish its pubs. In the first half of the current fiscal period, the company has spent £11.4m.
Adjusted EPS for the half year before exceptional items was 24.4p, up from 19.2p. The Enterprise board is recommending an interim dividend of 4.1p, up from 3.6p a year earlier.
