Enterprise Inns making progress

SOLIHULL-based pub company Enterprise Inns has reported “significant progress” in its attempts to move towards growth in net income.

Its preliminary announcement for the year ending September 30 shows EBITDA before exceptional items of £340m (2011: £366m) and improving performance trends across the whole estate, with like-for-like net income down 1.2% (2011: 4.3% down).

The firm has gathered in £208m in  net proceeds from disposals and its sale and leaseback programme while strong cash generation has reduced net debt by £266m to £2.7bn (2011: £3.0bn).

The firm’s profit before tax and exceptional items was £137m (2011: £157m) while profit after tax was £44m (2011: £24m).

Commenting on the results, chief executive Ted Tuppen said: “We are pleased to report significant progress in moving towards growth in net income despite a tough trading environment for our publicans and ourselves.

“We continue to stabilise operating performance with total like-for-like net income across the entire estate reducing by only 1.2%, or £5m, in the year to September 2012, compared with a fall of 4.3% in the prior year.

“Strong cash flows from operating activities and our successful disposal programme have helped to reduce total borrowings to £2.7bn, secured against assets valued at £4.3bn. Our exposure to the banking market reduced to only £310m and the market price of our bonds improved by an average of 21% during the year.

“The strong cash generative nature of our business has enabled us to agree a new forward start facility of £220m which extends the availability of bank funding through to 2016.

“Given the security of our funding position, we are now able to focus all efforts on continued operational improvement. Our first target is to achieve like-for-like net income growth for the entire estate before ultimately restoring the business to sustainable growth in earnings per share. In the meantime we will continue to use available cash to reduce debt as we aim to create value for our shareholders.”