Enterprise Inns, the tenanted and leased pub company, has reported an improvement in like-for-like trading in the 44 weeks to 4 August, with like-for-like income across its total estate down 1.2% against a fall of 5.1% in the same period last year and a 1.6% decline in H1.
Like-for-likes in the substantive estate increased by 1.6% per pub. Its bank borrowings net of cash reduced from £446m at 30 September 2011 to £364m at the period end.
Enterprise described trading in the 18 weeks since the half year as “challenging”.
“The Jubilee celebrations in June provided a welcome boost to publicans in a similar fashion to the Royal Wedding in April last year. The UEFA European championship in June also provided some assistance to trade but was significantly outweighed by the dampening effect on trade from the record breaking rainfall throughout the period.
“It is encouraging that despite such bad weather, the 18 weeks like-for-like income performance for the total estate has improved upon the first half.”
Enterprise said the Olympics is “not materially impacting trading performance although the positive sentiment from continued British success should encourage customers to celebrate in their local community pubs”.
“This year’s poor summer weather has undoubtedly affected trade for our publicans in the near term but our strategy remains clear and the quality of our pub estate combined with the resilience of our publicans will ensure we deliver results for the full year in line with our expectations.”
Total proceeds from disposals in the 44 weeks were £148m and the company said Enterprise expects full-year proceeds to be c£200m, with a further £150m expected next year.
In the financial year to date the firm has sold 121 “unsustainable” pubs for £26m, while in December it completed a sale and leaseback of 17 sites for £24m, and has also sold 82 “exceptional” properties for £98m at an average multiple of 14 times income and at a “significant premium to book value”.
Enterprise’s existing bank facility of £410m has been reduced from £465m at the half year, with just £21m of Tranche B outstanding - this is expected to be repaid fully by the end of the financial year, the company said.
The firm repaid a further £10m of floating rate A2N securitised bonds since the half year and it expects to make advance repayment of the remaining £19m floating rate securitised bonds by this financial year end. This means they would be repaid one year ahead of schedule.
Enterprise also purchased £10m A4 and £2m A3 Unique fixed rate securitised bonds, taking the total purchased and cancelled to £41m, representing a “significant proportion” of the £74m of Unique A class fixed rate bonds that it plan to purchase by September 2013.
The company said total CAPEX in the full-year will be c£60m, reducing over time to a “normalised” level of c£50m per year.
