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Enterprise Inns report rate of decline in business is slowing but expects an"equally challenging" 2010
Enterprise Inns Plc said today that the rate of profit decline at its pubs was slowing as it reaped the benefits of selling its worst-performing assets, but that trading conditions will be challenging throughout 2010 despite some encouraging trends.
The U.K.'s second-largest tenanted pub operator, with over 7,400 pubs, said in a trading update that the decline in average net income per pub eased to around 4% in the 16 weeks to Jan. 16, having fallen by 8% during the last financial year.
In the 82% of its pubs let on substantive agreements, average income was less than 2% down, it said.
"Trading conditions will be challenging throughout the year as pubs and consumers alike face the prospect of rising taxes and higher unemployment," it said.
Rival pub operator J.D. Wetherspoon Plc warned yesterday that the unusually harsh U.K. weather in January had a negative impact on its sales. But both Mitchells & Butlers and JD Wetherspoon reported sales growth over the key Christmas and New Year period.
Enterprise confirmed today that the extreme weather in the first two weeks of January hit many of its pubs but said it brought extra custom to other pubs.
Pubs are also facing a rise in sales tax in January to 17.5% from 15%.
Britain's pubs have had a torrid couple of years as high unemployment, a smoking ban, the recession, hikes in beer taxes, poor weather and cheap alcohol offers in supermarkets combined to keep drinkers at home, although recent updates have suggested the trading environment may be improving.
The company posted a 97% drop in full-year net profit in November and said the coming year would be "equally challenging."
Enterprise sold hundreds of pubs last year as it concentrated on paying down its huge £3.5 billion debt as profits slumped.
Last week the U.K. government ruled out the introduction of legislation which would set minimum pricing for alcohol, despite calls to tackle the problem of binge-drinking from legislators.
The company's shares have doubled in value in the last year but are still almost 90% below their height in 2007. The shares closed last night at 95 pence.
The U.K.'s second-largest tenanted pub operator, with over 7,400 pubs, said in a trading update that the decline in average net income per pub eased to around 4% in the 16 weeks to Jan. 16, having fallen by 8% during the last financial year.
In the 82% of its pubs let on substantive agreements, average income was less than 2% down, it said.
"Trading conditions will be challenging throughout the year as pubs and consumers alike face the prospect of rising taxes and higher unemployment," it said.
Rival pub operator J.D. Wetherspoon Plc warned yesterday that the unusually harsh U.K. weather in January had a negative impact on its sales. But both Mitchells & Butlers and JD Wetherspoon reported sales growth over the key Christmas and New Year period.
Enterprise confirmed today that the extreme weather in the first two weeks of January hit many of its pubs but said it brought extra custom to other pubs.
Pubs are also facing a rise in sales tax in January to 17.5% from 15%.
Britain's pubs have had a torrid couple of years as high unemployment, a smoking ban, the recession, hikes in beer taxes, poor weather and cheap alcohol offers in supermarkets combined to keep drinkers at home, although recent updates have suggested the trading environment may be improving.
The company posted a 97% drop in full-year net profit in November and said the coming year would be "equally challenging."
Enterprise sold hundreds of pubs last year as it concentrated on paying down its huge £3.5 billion debt as profits slumped.
Last week the U.K. government ruled out the introduction of legislation which would set minimum pricing for alcohol, despite calls to tackle the problem of binge-drinking from legislators.
The company's shares have doubled in value in the last year but are still almost 90% below their height in 2007. The shares closed last night at 95 pence.
Thu, 21st Jan 2010