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Little cheer for the beer trade

18/11/2008

ENTERPRISE Inns, Britain's second-biggest pubs group, reported a drop in full-year pre-tax profits, adding to gloom in a sector which has already been hit by a smoking ban and impending recession.

Enterprise, which has over 7,700 pubs, said pre-tax profits before exceptional items fell by 12.6 per cent to £263m in the year to September.

It maintained its final dividend at 10.4p.

Chief Executive Ted Tuppen said the results were solid in a `very difficult' year for the pub industry and warned the trading environment will remain tough during the coming year.

A vicious economic downturn, last year's smoking ban, a hike in beer duty, poor summer weather, and cheap offers in supermarkets have all combined to encourage drinkers to stay at home, hitting pubs across Britain hard and accelerating the rate of closures.

Enterprise spent more than £9m supporting over 1,450 tenants struggling to cope with worsening trading conditions during the year. The assistance was in the form of rent concessions and discount schemes.

Mr Tuppen said he expected Enterprise to provide an equivalent level of assistance in the current financial year.

Earlier this month, Britain's biggest pub operator Punch Taverns also reported a drop in full-year profits and said trading in September and October was `extremely challenging'.

Shares in Enterprise Inns, which have lost more than 80 per cent of their value since the start of the year on fears over its debt and the rapidly deteriorating consumer environment, slipped 1.5 per cent to 83.75p.

The British Beer and Pubs Association has said pubs are shutting down at a rate of five a day with nearly 2,000 of the country's 57,000 pubs likely to have gone by the end of the year.

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