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Tue 14th May 2013 - Breaking News - Enterprise reports like-for-likes down 4.2%
Cold weather pushes Enterprise like-for-like income down 4.2% in the first half; Enterprise disappointed by statutory consultation: Tenanted operator Enterprise has reported net like-for-like income down 4.4% in the first half of its financial year as a result of cold weather. Chief executive Ted Tuppen said: “Trading in the first half of the year has been particularly challenging. The heavy snowfalls in January and the coldest spring for many years have not encouraged customers to venture out to their local pub. Against this backdrop we are satisfied with the results for the first half of the financial year and are encouraged that in recent weeks we have seen a recovery in trade. Our target continues to be the delivery of like-for-like net income growth across the entire estate during the second half of this year. Our strong cash generation from operations combined with the successful disposal programme enables us to maintain our strategy of debt reduction which will see total net debt reduced to £2.5 billion by the year end, a reduction of £0.8 billion over the last three years.” Tuppen added that the cessation of trading on 1 October 2012 of its wine and spirits distributor Waverley adversely impacted the business as it was unable to supply these products to publicans, resulting in a direct loss of some £2 million of trading income. He said: “We have worked hard to mitigate these effects and have held the like-for-like total estate net income decline to 4.2% for the first half of the year compared to a decline of 1.6% for the first half last year. The team is focused on implementing activities that will improve our trading performance and the profitability of our publicans in the second half of the year and in recent weeks we have seen good progress in our like-for-like net income for the total estate. In addition, we have secured a new two-year distribution agreement for wines and spirits with Carlsberg which is now operational and has enabled us to return to normalised levels of trading for this category. We generated £54 million in cash in the first half of the year (H1 2012: £89 million) from our asset disposal programme to supplement cash from operations and we expect to deliver £150 million of proceeds from disposals for the full year. These proceeds, which largely arise from the disposal of unsustainable pubs and some exceptional properties, provide funding for debt reduction and for income generating investments in the core estate, which continue to improve the quality of the estate.” Ebitda before exceptional items was £153m (H1 2012: £168m). The company has completed 260 exterior decorations at an average cost of £10,000. In the first half of the year Enterprise sold 151 unsustainable pubs generating £42 million of proceeds. In addition ten exceptional properties were disposed of generating net proceeds of £12 million at an average multiple of 14 times net income. On the consultation over statutory regulation; the company said: “We were pleased to see, again in the Queen’s Speech, that a Bill will be introduced to reduce the burden of excessive regulation on businesses. In the light of this commitment, we are disappointed that the Department for Business, Innovation and Skills (BIS) has launched a consultation to determine whether to regulate the contractual relationships between pub companies and their tenants through a Statutory Code of Practice. In line with the entire industry, we are totally committed to fair, transparent and lawful dealing with tenants and lessees and all other business partners and against any abuse of the tied pub model. There is strong evidence that the existing voluntary Industry Framework Code is working well and we agree with the widely-held industry view that the proposal for a Statutory Code is a disproportionate response based upon flawed and misleading evidence. BIS have already been forced to acknowledge that a critical data point in their analysis, the high level of “complaints” to the British Institute of Innkeeping (BII) Helpline was in fact a misrepresentation, as most were simply calls for advice, with only four calls over four years categorised by the BII as “grievances” relating to ETI. The high level of total calls was unsurprising as ETI pay for new tenants to join the BII and therefore enjoy the many training and advisory packages which they offer.”

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