Income improves for Enterprise Inns but second half growth unlikely
SOLIHULL pubco Enterprise Inns has seen income improve after a poor start to the year although it has forecast the second half is unlikely to see any growth in the business.
In an Interim Management Statement for the 44 weeks to August 3, 2013, the company said the second half had been characterised by an improving trend – one which had been boosted by the recent fine weather.
During the first half, income levels declined by 4.2% but since then things have picked up, although like-for-like net income for the total estate remains down by 2.7% in the 18 weeks to August 3.
More encouragingly, it said that in the first five weeks of its final quarter there had been like-for-like net income growth.
“In the first half of the year our income was adversely impacted by some exceptionally poor winter weather alongside the cessation of trading of Waverley, our wines and spirits distributor. In the third quarter we have faced tough comparatives against the prior year due to the timing of Easter and the positive impact from the Euro 2012 football championship and the Queen’s Diamond Jubilee celebrations,” it said.
“After taking account of these unusual events we estimate that our underlying like-for-like net income in the first half was down by around 2% and has improved in the second half to date to be down by approximately 1%.”
It said the key to sustaining improved performance in like-for-like net income would be the successful roll-out of new services, such as the deployment of free Wifi, the provision of improved food pricing and support and the availability of discounted Sky entertainment packages.
Investment in the group estate continues with the completion of 656 exterior redecorations, many of which have been completed during June and July.
The group said its asset disposal programme remained on target and it has so far completed, exchanged or has in the hands of solicitors disposals of 356 pubs with proceeds of £127m. It expects total disposal proceeds for the full year to be in the region of £150m.
The asset disposals combined with cash generated from operations has helped to fund the investment in the core estate and reduce bank debt. It anticipates net debt being reduced to £2.5bn by the year end.
In outlook, it said: “We are focused on delivering sustainable growth in like-for-like net income across the total estate, driven by constantly improving the quality of our pubs.
“Trading performance continues to improve and, whilst we are unlikely to deliver like-for-like growth for the second half in total, like-for-like growth remains our target for the final quarter.”
