Weather woes contribute to Enterprise Inns income dip

SOLIHULL-based pub company Enterprise Inns has seen a decline in income due to what it describes as “exceptional trading conditions”.

In an interim management statement for the 17 weeks to January 26 – released to coincide with its annual general meeting today – the firm said it had seen a like-for-like net income decline for the total estate of 4.4%, or £5m.

“A number of factors have made the first four months of the year unusually challenging,” it said.

“The poor weather during much of the period has not been helpful, particularly when compared to the Indian summer of October 2011 which was very good for trade. Trading in the weeks around Christmas and the New Year was strong and produced welcome respite. However, the extreme weather conditions of the last two weeks, with snow across much of the country, have led to reduced footfall and a consequential loss of beer volume which we estimate to have reduced our net income by £1.5m.

“As we signalled at our preliminary results announcement in November 2012, the cessation of trading on 1st October 2012 of Waverley, our wines and spirits distributor, adversely impacted the business because we were unable to supply wines and spirits to our publicans and resulted in a direct loss of some £1m of trading income.

“However, we have now signed a new two year distribution agreement with Carlsberg which will become operational in the next few weeks such that income from wines and spirits should return to normalised levels by the end of March.

“We expect trading conditions to remain difficult in 2013 as consumers face economic uncertainty and publicans have to manage rising cost pressures.”

Enterprise Inns says it is on track to deliver proceeds from asset disposals of £150m for the full year.

In the first 17 weeks of the current financial year it completed or exchanged on 88 pubs for proceeds of £32m and has 34 additional pubs in the hands of solicitors expected to generate a further £17m.

Its total net debt is expected to decline by £0.2bn to £2.5bn during the financial year.

Former Sainsbury’s man Peter Baguley is to be brought in as an non-executive director.

He was the leader of the group property functions at both Sainsbury’s and Boots and has most recently advised one of the largest global real estate services groups on retail corporate strategy.