Enterprise Inns on course to meet full year expectations
SOLIHULL pubco Enterprise Inns has said it continues to make good progress on its new strategic plan for the business and its first half performance looks set to yield a 1.5% income growth in its leased and tenanted estate.
In a trading update covering the 25 weeks to March 19, the company said its estate had been reinvigorated by the new measures and a new deal for publicans, backed by new tenancy agreements would reduce property obligations and enhance capital investment.
The company said the continuing implementation of its strategic plan meant Enterprise Inns was evolving from a predominantly leased and tenanted operation to a portfolio of businesses which operate a variety of models and trading styles.
Enterprise Publican Partnerships is the new trading name for its tied leased and tenanted business. It is, and will remain for many years, the largest part of the group. As at March 19, 2016, it had had 4,688 pubs trading within the leased and tenanted estate and they have grown their like-for-like net income by 1.5% in the 25 weeks to March 19.
The company’s commercial property estate now includes 245 venues with an average annual rental income of £58,000 each. The vast majority of these trade as pubs on a free-of-tie basis. The properties have an annualised rental income of £14.3m and were valued at September 30, 2015 at £167m, resulting in a gross yield of 8.5%. The like-for-like net income from this portfolio has grown by 6.3% in the 25 weeks to 19 March 2016.
It expects the number of commercial properties to increase to around 300 by the end of September.
Enterprise is also going ahead with a new share buyback programme of up to £25m; circa 6% of the issued share capital of the business.
Simon Townsend, CEO, Enterprise Inns, said: “It is close to a year since we announced our new strategic plan for the business and we are making good progress. Our leased and tenanted business, Enterprise Publican Partnerships, continues to deliver like-for-like net income growth and the expansion of our managed operations and commercial property portfolio is on track.
“We are confident that the delivery of our strategy will provide a clear path to maximising shareholder value and are today outlining a returns-based approach to the allocation of available capital. The announcement of a share buyback programme demonstrates our approach and underlines our confidence.
“We remain on track to meet our expectations for the full financial year.”
