ENTERPRISE Inns today reported a 21% fall in annual profits and warned it expected the current financial year to be just as challenging.
The UK’s second largest pubs firm, with an estate of 7,399 pubs worth £5.4 billion at the end of September, said the economic climate and further disposals would result in another decline in trading profits in the short-term.
Pre-tax profits for the year to September 30 fell to £208 million from £263 million a year earlier, but chief executive Ted Tuppen said this represented a creditable result in "very difficult circumstances".
Enterprise said the majority of its pubs continued to trade well, with 83% of the estate producing #448 million of net income in the year, down 3% from last year at an average of #73,000 per pub.
The remaining 17% struggled with periods of closure, temporary letting and general under-performance which resulted in a 39% fall to an average of £37,000 per pub.
There were significant regional variations in performance, with average net income per pub down by 11% in the north, 9% in the midlands, 5% in the south and 3% in London.
Solihull-based Enterprise disposed of 368 pubs in the year and said it expected a similar or higher level in the current year as the economic environment accelerates the demise of unviable pubs.
The sites will enable the company to raise additional funds in advance of its refinancing of a £1 billion bank facility, which is due for renewal in May 2011. Overall debt, including corporate bonds, stood at £3.56 billion in September.
Enterprise received a boost last month when the Office of Fair Trading (OFT) gave the industry the all-clear following a "super complaint" from the Campaign for Real Ale about so-called beer ties.
The OFT found no evidence that "tied" prices - where pub companies compel tenants to buy drinks from them - were harming consumer interests, despite concerns over high rents and beer prices forcing landlords out of business.