Enterprise Inns, the leased and tenanted pub company, has reported a 1% rise in like-for-like income per pub in its substantive estate for the 18 weeks to 4 February 2012. The company, which this morning also announced that former WH Smith chairman Robert Walker is to succeed Hubert Reid as chairman, said like-for-like net income per pub was down 2% across its entire estate. Average net income per pub increased 5% (2010/2011: 1%), helped by improvements in operating performance and the disposal of underperforming pubs, Enterprise said. “Along with the rest of the pub industry, trading has benefited from the comparison with the extreme weather conditions of December 2010, which we estimated last year cost us almost £2m in operating profit, part of which was recovered by strong trading in January 2011,” Enterprise said. The firm said there had been a reduced level of business failures and overdue balances, and a “substantial reduction” in the cost of financial support for publicans. Net income uplifts among its 110 pubs that have traded under the Beacon pubs managed tenancy model for at least four weeks were “close to 30%”. Enterprise plans to have 150 sites operating under the format by 31 March, and 300 by the year-end. Enterprise said it had identified for sale a number of “exceptional” properties that can realise substantial cash proceeds above book value. “We expect to complete a number of such sales during the next two years.” During the current financial year, estimated total proceeds from all asset disposals will be £150m to £200m and a “broadly similar” programme is planned for next year. So far this financial year, Enterprise has completed the sale of 63 pubs for £40m, a profit of £2m over book value. It has also exchanged contracts on a further 33 pubs (net proceeds of £33m) for completion this financial year, including the 15 pubs that are to be sold to Fuller’s for £22.9m. Enterprise said it has expanded its operations team during the first quarter, recruiting an additional managing director and created four new divisions “in order to provide greater focus on helping our publicans drive performance in what continues to be a very challenging market”. In addition, the property team is being “redirected to ensure that we gain maximum value from our large and diverse estate of freehold properties”. “Working with external property consultants we have already identified a number of opportunities where we can achieve sale proceeds at attractive multiples of earnings and at prices in excess of current book value.” Enterprise invested more than £25m in capital improvements in the estate in the period and reduced its bank borrowings, net of cash, to £420m - the figure was £446m at 30 September 2011. In addition, £80m of debt was cancelled, leaving total bank facilities at £465m (tranche B: £61m). Enterprise said it’s £67m ahead of its repayment schedule for the A2N floating rate notes in the Unique securitisation. The company would be bringing forward a review of its overall debt structure to ensure an appropriate level of funding is available beyond the current bank facility term of December 2013, it said. “As part of this review, we are considering a number of options to avoid the risk of excess cash being trapped in the Unique securitisation, including the purchase of Class A Notes in the market and their cancellation.” Enterprise said it expected trading conditions to “remain challenging throughout the coming year as consumers face economic uncertainty and publicans have to manage rising cost pressures”. “Despite these challenges, we are confident that our long-term strategy of improving the quality of our estate and the profitability of our publicans is providing clear evidence of operational stability and increasing success. “Alongside the pursuit of like-for-like growth in profitability for both our publicans and ourselves, we will continue to seek to strengthen our balance sheet through rigorous management of our freehold assets and the appropriate use of cash.” Meanwhile, the company called on the “highly damaging” alcohol duty escalator to be dropped and called for “further steps” to reduce discourage supermarket to sell alcohol at “irresponsibly low prices”. Robert Walker, who is to become chairman on 31 March, is currently chairman of builders merchants Travis Perkins and clothing company Americana International Holdings and senior independent director of Tate & Lyle. He will join the Enterprise board as a non-executive director and chairman designate after its AGM today. Ted Tuppen, chief executive of Enterprise, said: “I am very pleased that we have secured the appointment of Robert Walker who has a wealth of experience and a strong track record of leading successful businesses. I am looking forward to working with Robert as the group continues to move ahead.”