Enterprise Inns swings to loss as revenue slips

For the year to the end of September, it reported a net loss of £65m compared with a profit of £30m in 2014, as it marked down the value of the its pub estate by 2.7% and with revenue down to £625m from £632m.

Profit before tax and exceptional items nudged up to £122m from £121m.

Enterprise saw like-for-like net income growth of 1% in the final quarter, resulting in an increase of 0.8% for the full year.

Chief executive Simon Townsend said: “We are pleased to report further operational progress and a second, successive full year of like-for-like growth in net income across our leased, tenanted and free-of-tie estate.

“This has been achieved by maintaining a relentless focus on the many operational activities and initiatives with which we are supporting our publicans to improve their profitability. Trading in the first six weeks of the new financial year has been in line with our expectations and continues to maintain our growth momentum.”

The company said the implementation of its strategic plan is on track, giving it greater flexibility with which to optimise returns from each of its assets and deliver greater value to shareholders.

Enterprise is in the process of changing its business to adapt to new government legislation that will allow landlords to cut the "beer tie" – which saw breweries renting out pubs to landlords locking them into selling their beer – and buy beer at market prices.

Part of the changes involves selling a fifth of the pub’s estate and increasing the number of pubs it manages itself.

Numis Securities, which rates the stock at ‘buy’, said pre-tax profit of £122m was in line with its estimate of £122.1m and consensus of £122.8m.

“Overall, the results are as expected, with the total estate revaluation resulting in a 2.7% (£163m) write-down.”

At 1030 GMT, Enterprise Inns shares were up 5.3% at 100p.