Pub operator Enterprise Inns has delivered what it describes as "creditable results" for a "testing year" that has forced it to provide "unprecedented" levels of support to help its licensees survive.
Chief executive Ted Tuppen said weak consumer spending, rising overheads and tariffs and aggressive supermarket discounting had cut average net income per pub by 8% in the year to 30 September, 2009.
Initiatives to help licensees included a Price Freeze Package that delayed price changes on key brands for six months (at a cost of £3m) and £18m-worth of rent concessions and discounts to 1,900 licensees at an average cost per pub of £9,500.
Enterprise also introduced Temporary Management Agreements that allowed it to take control of up to 218 failed but viable pubs for a quick relaunch. This was partially successful, but at a high cost.
Nevertheless, the cost of business failures rose to £25m during the financial year, although the group says the rate of failure is now slowing.
Enterprise generated gross proceeds of £113m from the sale of underperforming and non-core pubs that reduced its estate from 7,399 to 7,763. The successful auction of six pubs in October will see 14 more properties put under the hammer in December.
Despite the tough trading environment, Enterprise invested £52m to improve the facilities in more than 1,500 pubs and reduced its debt burden by £142m.
Tuppen warned that the coming year would be "equally challenging" and said Enterprise would focus on "stabilising performance across the estate as well as steadily reducing the level of bank debt."
Key figures (after exceptional items except for *)
Sales £818m (2008: £880m)
Ebitda: £445m (2008: £510m)
Pre-tax profit: £11m (2008: £209m)
Pre-tax profit before exceptional items: £208m (2008: £263m)*
By Angela Frewin
E-mail your comments to Angela Frewin here.
If you have something to say on this story or anything else join the debate at Table Talk - Caterer's new networking forum. Go to www.caterersearch.com/tabletalk
Looking for a new job? Find your next pub job here with Caterersearch.com jobs