Enterprise Inns will not approach its shareholders at the moment about a conversion to a REIT because of the 'turmoil' in the financial markets. In a pre-close statement released this morning, the pub group said EBITDA had been squeezed by the reduction in on-trade beer volumes, the smoking ban, poor summer weather and the weakness in consumer spending. It said it expected to see underlying profit down approximately -5% in the second half of the year and down by about -3% for the whole year. Enterprise said the cost of licensee support – of more than £5.5m – was also impacting profits. Because of all these factors the pubco said a REIT would not be “appropriate” at this time. In a statement, the company said: “We continue to make good progress with the REIT conversion appraisal, with all technical and valuation methodology issues now agreed with HMRC and consent in principle for the necessary restructuring received from our banking syndicate. “In light of the current turmoil in the financial markets, the board does not however consider it appropriate to seek the consent of bondholders at this time. We are therefore adopting a cautious approach to the costs and processes of conversion, continuing to work with our advisers to explore the options and to develop a solution which is demonstrably in the best long term interests of all stakeholders.” The statement added: “We are not working to a particular timetable and will make further announcements as and when appropriate.” Enterprise added it was offering special concessions to 850 of its licensees – but that was now beginning to stablilise. But the company added: “As expected in these tough market conditions, there has during the second half of the year been a small reduction in the number of pubs let on long term substantive agreements, from 85% to 83% of the whole estate.” Beer sales incomes had grown in 40% of its pubs – and food sales continued to do well, added Enterprise. The statement also revealed that Enterprise had acquired 58 pubs for £49m and also invested £70m on improvements to the estate. It had also sold 58 pubs and surplus land for £29m and had £18m worth of deals waiting to be concluded, involving 30 pubs. Enterprise also said that 89% of its debt was at a fixed rate of interest of 6.5% for an average of 10 years. Its next refinancing requirement was a £1bn syndicated debt facility which expires in May 2011.