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Enterprise Inns points to improving trends as profits drop

20 November 2012 by
Enterprise Inns points to improving trends as profits drop

Pub group Enterprise Inns pointed to continued growth in net income despite a 12.7% drop in pre-tax profits to £137m for the year to 30 September 2012.

The company said that like-for-like net income was down 1.2% over the period, compared to a 4.3% drop in 2011. And it highlighted the fact that performance trends were improving, with lie-for-like net income growth of 2.2% where publicans have been in occupation for over one year. Its earnings before interest, tax, depreciation and amortisation (EBITDA) were down to £340m to £366m the year before.

Enterprise described trading as "tough" with a raft of special events such as the Diamond Jubilee, UEFA European Football Championship and the London 2012 Olympic and Paralympic Games balanced out by summer rainfall.

Meanwhile, the firm generated £208m from the sale and leaseback of more of its pubs. Enterprise's estate now comprises 6,060 properties with a book value of £4.3b. The property portfolio comprises 5,902 trading pubs and 158 properties which are alternative use outlets or properties permanently closed.

Its net debt at 30 September 2012 stood at £2.7b, compared to £3b at last year end.

Ted Tuppen, chief executive said: "We are pleased to report significant progress in moving towards growth in net income despite a tough trading environment for our publicans and ourselves. We continue to stabilise operating performance with total like-for-like net income across the entire estate reducing by only 1.2%, or £5m, in the year to September 2012, compared with a fall of 4.3% in the prior year.

"Strong cash flows from operating activities and our successful disposal programme have helped to reduce total borrowings to £2.7bn, secured against assets valued at £4.3bn. Our exposure to the banking market reduced to only £310m and the market price of our bonds improved by an average of 21% during the year. The strong cash generative nature of our business has enabled us to agree a new forward start facility of £220m which extends the availability of bank funding through to 2016."

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