Solihull-based Enterprise Inns has posted flat annual profits as it continues with its planned sell-off of hundreds of sites in preparation for the end of tied pubs.
The firm sold off 260 pubs for £75 million in the year, as it prepares for new legislation that allows tenanted pub landlords to break the link with their pub group, leaving them free to search for more competitive beer contracts.
The country’s largest pub group, with around 5,000 outlets, said its pre-tax profits before exceptional items edged up 0.8 per cent to £122 million in the year to the end of September compared to 12 months ago, citing lower interest charges.
But it added that its like-for-like growth increased by one per cent in the final quarter of the year, and 0.8 per cent over 12 months, making it the second successive full-year of like-for-like growth. Shares lifted almost five per cent.
Enterprise said in May it would sell up to 1,000 outlets over the next five years and boost the number of pubs it managed as a result of the Government legislation due to come into force next June.
It said since May it has increased the number of pubs it manages from 16 to 35 by the end of September. It plans to increase this to 850 outlets by 2020. Managed pubs are owned by the group, rather than an individual landlord.
It also said it expanded its commercial outlets, run by landlords without a beer tie, from 185 in May to 213 sites by the end of September. It plans to raise this to 1,000 pubs over five years.
Chief executive officer Simon Townsend said: “While the market in which our pubs operate remains highly competitive, and as we prepare for the implementation of new legislation in 2016, we are encouraged by the continuing momentum of our business, reflecting the exceptional efforts of our publicans and the strength of our relationships with them.”
On a statutory post tax basis the business swung to a £65 million loss from a £30 million profit the year before, due to a re-evaluation of its estate which does not affect trading.
The group added that sales in the first six weeks of its new financial year are in line with expectations and maintain the momentum of the previous year.
Activity in the Midlands saw hefty investment by Enterprise and its publicans.
Among the most notable were the Duke of York in Wolverhampton, which reopened following a £100,000 refurbishment. It saw the city centre site revert to its original name and convert into a contemporary ale house.
The Half Moon, Wolston, saw a joint investment of £130,000, while £126,000 was jointly invested in The Rainbows, Coventry.
The biggest single investment in the region will see The Plough on Harborne High Street reopen in the near future after a major £750,000 joint investment between Enterprise Inns and proprietor Adam Johnson.
The launch of ‘Next Door at the Plough’ will see the neighbourhood pub in the Birmingham suburb add a new first floor extension that will be home to two new private dining and meeting rooms.
The project has also enabled the pub to extend the number of ground floor covers by 40.
In an ambitious venture, Enterprise Inns acquired the house adjoining The Plough and knocked through between the two buildings in order to extend the trading space on both the ground and first floors.