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Tue 18th Nov 2014 - Enterprise results, ETM Group and Yauatcha
Enterprise reports like-for-like net income growth for full year: Enterprise Inns has reported further progress in like-for-like net income with growth of 0.5% in the final quarter resulting in an increase of 1.4% for the full year to 30 September 2014. Ebitda before exceptional items of £302 million (2013: £313 million), was in line with expectations following the impact of asset disposals. Profit before tax and exceptional items was maintained at £121 million (2013: £121 million) as interest savings from reduced debt offsets reduction in Ebitda. Profit after tax improved to £30 million (2013: £4 million loss) after net exceptional charges, principally relating to property matters, reduced to £65 million (2013: £99 million). Net proceeds from disposals were £73 million (2013: £150 million). The asset disposal programme has materially reduced to focus primarily on under-performing assets with proceeds re-invested for higher returns. The year saw capital investment of £66 million (2013: £62 million) across the estate of which 41% was focused on growth driving initiatives, up from 32% achieved last year. The company reported operational focus aimed at improving publican profitability helped deliver a 16% reduction in business failures. Chief executive Simon Townsend: “We are pleased to report like-for-like net income growth for the full year with each quarter delivering improvements on the prior year. This represents significant progress and has been achieved through our continued focus on the implementation of actions that drive sales and profit for our publicans and as a result enhance our income. We continue to enhance the quality of our pub estate, and while we have materially reduced the scale of our asset disposal programme, we have sold under-performing assets to fund increased investment in the retained estate, with a growing proportion of capital investment directed toward income enhancing opportunities. Our teams remain focused on providing exceptional local support and value creating opportunities to our publicans to enable them to grow their businesses. The successful partial refinancing of the 2018 corporate bonds and replacement of our bank facilities provides the business with increased flexibility and optionality with which we aim to sustain our operational progress, further reduce our debts and generate value for shareholders. While our performance this year has benefited from a UK economy which has shown some signs of strengthening, including improving employment prospects, we view the consumer recovery as fragile and remain cautious in the near-term. Our focus for the current year is to continue to implement initiatives which assist publican profitability whilst increasing capital investment in relevant and innovative retail offers. We are pleased that, for the first seven weeks of the new financial year, we have continued to deliver like-for-like net income growth in line with our objectives for the year.” Of the estate’s trading performance, Townsend said: “The improvement in trading performance has been achieved across the estate with all geographic sectors reporting stability or growth in like-for-like net income. The Southern estate has performed particularly well helped by strong trading in and around London. We have 732 pubs within the Greater London region and their like-for-like net income was £70 million in the year, up 4.4% on the prior year. The top 90% (4,813 pubs) of our estate, in terms of income earned, grew like-for-like net income by 3.1% in the year, demonstrating the strength of the core estate. We are evolving the Enterprise model in a number of areas. We are building an improved understanding of consumer trends and competitor activity to inform our investment and divestment decision making. On occasion, the local publican may require operational support and Enterprise capital investment to ensure the retail offer is optimised for a particular pub. In such circumstances, it may be beneficial for us to have greater involvement in the operation of the pub to enhance our returns. We have seen benefits from this intervention in our 183 Beacon pubs over the last three years and we have now extended this approach to nine Enterprise managed pubs. Additionally, we are developing our commercial property capability to ensure that we secure the best use and consequential value of our assets. This can include the letting of assets on a free-of-tie commercial property basis and also the use of turnover related rent agreements. We currently have 159 commercial properties generating £7 million of index-linked annual income. This year we have invested £66 million into the estate with some 41% invested in programmes that will generate incremental income. Within this total we have invested in excess of £100,000 in 70 pubs, in excess of £50,000 in 188 pubs and between £20,000 and £50,000 in 600 pubs”. 

Hakkasan Group’s Yauatcha and ETM’s Botanist set for Broadgate Circle: British Land has announced that Broadgate Circle, the food, drink and leisure scheme at Broadgate, will see the entry of Hakkasan Group’s Yauatcha and The Botanist from ETM Group. Other restaurants debuting in the City include Aubaine, Shoryu Ramen and Comptoir Libanais. Broadgate Circle will re-open in spring 2015 with 11 high profile brands with an all-day, six-day week offer. This will be Yauatcha’s second UK location following the success of its restaurant in Soho, and its first in the City. It has taken a 7,220 sq ft restaurant on a 15-year lease. ETM Group has taken the 8,180 sq ft terrace bar on a 20-year lease for The Botanist. Aubaine French restaurant, boulangerie and pâtisserie has taken 2,870 sq ft on a 15-year lease. Lebanese canteen and delicatessen Comptoir Libanais has taken 1,880 sq ft on a ten-year lease while Shoryu Ramen, which specialises in Hakata tonkotsu ramen, has signed for 2,120 sq ft on a ten-year lease. Following these signings, Broadgate Circle is over 90% pre-let or under offer. There are advanced negotiations with a further three operators, leaving just one unit and two kiosks still to let. Matthew Pinsent, Head of City Offices for British Land, said: “The redevelopment of Broadgate Circle is a great example of British Land and GIC investing in Broadgate, to create an environment where people want to work, and spend their leisure time. The addition of these brands builds Broadgate’s reputation for providing stylish, good quality dining options, and helps attract and retain our office customers throughout the estate.” Tom Martin, co-founder of ETM Group, added: “British Land and GIC understand what makes a great environment, we are really impressed at both the quality of the scheme and the calibre of brands involved. The Botanist on Sloane Square is one of our busiest London Bar / restaurants and the brand is ideally suited to the clientele of Broadgate and The City in general. We are delighted to bring this highly successful format to such a prominent and prestigious City location.” An estimated 250,000 people (CACI) pass through Broadgate every day. Its catchment extends to more than 7.1 million people with a total comparison goods expenditure of £12.75 billion per annum. Cafes and restaurants already at Broadgate include Gaucho Grill, Arancini Brothers, Rocket, The Liberty of Norton Folgate and Gatti’s, in addition to pubs and bars including Corney & Barrow, The Fleetwood, Jamies Wine Bar and The White Horse. Retailers include Reiss, Hobbs, Links, Monsoon, Karen Millen and Space NK. Broadgate Circle’s letting agent is Davis Coffer Lyons.

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