Full year profits flat for Enterprise Inns

SOLIHULL pubco Enterprise Inns has announced full year EBITDA before exceptional items of £302m, down £11m on last year due to the group’s ongoing disposal programme.  
 
Adjusting for the effect of disposals, the group said like-for-like net income had grown to £370m for the year ended September 30, 2014 (2013: £365m). Like-for-like net income from rents declined by £1m, primarily due to business failures, while income from beer supply grew by £6m as pricing and mix benefits, net of discounts, offset volume decline.   

Pre-tax profit before exceptional items was flat at £121m (2013: £121m) as interest savings from reduced debt offsets reduction in EBITDA. Adjusted earnings per share were also in line with last year at 19p (2013: 19p).

It said strong cash generation from operations had enabled reduction in net debt, which was down to £2.4bn (2013: £2.5bn).

The partial refinancing of 2018 corporate bonds and a new revolving bank facility completed last month are said to have provided a smoother and extended debt maturity profile with a reduced overall cost of borrowing.

Operational highlights saw net proceeds from disposals down to £73m (2013: £150m). However, it said the asset disposal programme had materially reduced to focus primarily on under-performing assets with proceeds re-invested for higher returns.

There was capital investment of £66m (2013: £62m) across the estate, of which 41% was focused on growth initiatives, up from 32% last year.

It said the focus of its operations now was improving publican profitability, which was helping deliver a marked reduction in business failures.
 
Commenting on the results, Simon Townsend, Chief Executive Officer said: “We are pleased to report like-for-like net income growth for the full year with each quarter delivering improvements on the prior year. This represents significant progress and has been achieved through our continued focus on the implementation of actions that drive sales and profit for our publicans and as a result enhance our income.
 
“We continue to enhance the quality of our pub estate, and while we have materially reduced the scale of our asset disposal programme, we have sold under-performing assets to fund increased investment in the retained estate, with a growing proportion of capital investment directed toward income enhancing opportunities. Our teams remain focused on providing exceptional local support and value creating opportunities to our publicans to enable them to grow their businesses.    
 
“The successful partial refinancing of the 2018 corporate bonds and replacement of our bank facilities provides the business with increased flexibility and optionality with which we aim to sustain our operational progress, further reduce our debts and generate value for shareholders.”
 
He added that while the company’s performance this year had benefited from a UK economy which was strengthening, it still viewed consumer confidence as fragile and it was therefore remaining cautious in the near-term.
 
“Our focus for the current year is to continue to implement initiatives which assist publican profitability whilst increasing capital investment in relevant and innovative retail offers. We are pleased that, for the first seven weeks of the new financial year, we have continued to deliver like-for-like net income growth in line with our objectives for the year,” he said.