Enterprise Inns said higher projected sales during the Queen’s Jubilee and the European football championships should arrest a four-year run of like-for-like sales declines at the UK’s largest pub company.
“We’re well into the period of stability. We’ve shown real growth in average income per pub so the next stop is stopping like-for-like sales declines in our estate and getting to flat [at the end of] this year,” said Ted Tuppen, chief executive.
“Like-for-like sales were helped last year by the royal wedding. With the Jubilee it will be similar and we’ve got the Euro football boost as well.”
Enterprise, which has 6,143 tenanted pubs, reported a 1.6 per cent drop in like-for-like net income in its total estate in the six months to March 31 – an improvement on a 5 per cent decline in 2011.
However, the debt-laden company said its core estate, which excludes about 700 underperforming pubs, registered a 1.5 per cent rise in like-for-like net income, from a 1.5 per cent decline last year – the first rise since 2008 after the introduction of the smoking ban.
“The results suggest financial stability is more visible than it has been for many years, both as a result of better trading and paying down debt,” said Douglas Jack, an analyst an Numis.
Revenue declined from £346m to £342m, although statutory pre-tax profits rose £3m to £64m. Diluted earnings per share declined from 14.2p to 10.6p, reflecting a tax credit last year.
Enterprise has sold more than 1,000 pubs in the past two years as many of the drink-led establishments have struggled with beer price increases and aggressive expansion by managed pub companies. The company, which is targeting £200m in disposals this year, said it made £89m from selling unwanted pubs, contributing to a reduction in net debt from £3.1bn to £2.9bn.
Mr Tuppen said Enterprise, whose share price has declined from more than 600p in 2007, was approaching a “normalisation” period in which it would be targeting £50m in pub disposals per annum by 2014. The company, he added, was looking to refinance £397m in bank debt due next year.
Enterprise shares closed flat at 68p.