Flat first half for Enterprise Inns cheered slightly by £20m deal
SOLIHULL pubco Enterprise Inns has concluded a £20m deal for the disposal of part of its commercial property estate.
It revealed in its interim results today that it had reached a deal yesterday (Monday) for the sale of a portfolio of 22 commercial properties, comprising 17 pubs and five convenience stores.
It said the venues, spread across England, would generate £20m, representing a 9% premium to the book value of the properties and a 6.7% yield based on a gross rental income of £1.34m.
The disposal package will complete on June 7, 2016.
The group expects to be operating around 300 commercial properties by September this year and in excess of 450 by September 2017.
“As we have demonstrated by the planned disposal, growing the scale of our commercial property portfolio in itself is not our primary objective, and we will constantly assess opportunities to crystallise and capture value from this estate.,” it said.
The deal deflected some attention away from a flat set of half year results.
Enterprise, the largest pub owner in the UK, saw H1 EBITDA of £142m (H1 2015: £144m) which it said was in line with expectations and reflected the impact of planned disposals.
Pre-tax profit was flat at £57m (H1 2015: £57m), as lower interest costs, resulting from reduced levels of debt, offset the decline in EBITDA.
It has now pledged its faith in Britain’s thirsty football fans to turn around a disappointing first half.
In outlook, the group said: “The first week of the second half of the year was inevitably adversely affected by the timing of the Easter period, but since then trading has been broadly in line with our expectations.
“We forecast trade to benefit from the UEFA Euro 2016 football championship in June and July although we do anticipate a period of disruption to follow the introduction of the Pubs Code. We remain confident that we will deliver positive like-for-like net income growth in our leased, tenanted and commercial estates for the full year.”
Commenting on the results, Simon Townsend, Enterprise Inns CEO, said: “We are continuing to make good progress. Our leased and tenanted business is maintaining its growth momentum while the rapid expansion of our managed operations and commercial property portfolio is on track and delivering results in line with our expectations.
“We are confident that the execution of our strategy is demonstrating a clear path to maximising long term shareholder value and our returns driven approach to allocating excess cash will deliver near term benefits to all our stakeholders.”
