17th Jan 2008 07:00
Enterprise Inns PLC17 January 2008 17th January 2008 Enterprise Inns plc Interim Management Statement Enterprise Inns plc (ETI) publishes its interim management statement for the 15weeks to 12th January 2008, to coincide with its Annual General Meeting to beheld at 11.00am today. ETI's business model remains robust, despite the difficult trading conditionswhich it predicted at the time of its preliminary announcement in November 2007,with EBITDA running broadly in line with the same period last year and earningsper share ahead. The smoking ban introduced during 2007 has had an adverse impact on many pubs,particularly those that are predominantly wet-led, with some industry statisticssuggesting that beer volumes have fallen by around 9% in October and November2007. Having aggressively churned the estate over the past few years andinvested effectively alongside licensees to develop a broader, high qualityoffering which is less dependent on beer sales, ETI and many of its licenseesare to some extent protected from the full impact of these beer volume declines.However, as stated at the time of our preliminary announcement, we remaincautious about consumer confidence and its impact on all sectors of the pubindustry over the coming year. In a marketplace that is likely to remain difficult for some time, it isespecially important that we work closely with our licensees, not only to helpthem to develop new business opportunities but also to support licensees who aregenuinely struggling, despite their best efforts, to deal with adverse marketconditions. In this regard, we continue to offer rent concessions, discountschemes and trading support where appropriate. Thanks to the quality of our pubestate, the expertise of our licensees and our support we are not experiencingany material deterioration in the key indicators of our licensees' financialhealth. During the 15 week period, ETI acquired 28 high quality pubs for £26 million,with a further 6 pubs exchanged and awaiting completion in the next few weeks.Furthermore, some £24 million has been invested, alongside our licensees, inimprovements to the estate and we expect capital investment for the year to beat a level similar to that spent in the year to September 2007. During the same period, ETI has disposed of 10 pubs and 2 plots of surplus landfor a total consideration of £7 million, a profit over book value of £2 million. There is considerable interest in the batch of 96 pubs that we put on the market in November for sale for alternative use and current indications are that these former pubs will also deliver a profit over book value. ETI is continuing discussions with HMRC regarding a potential conversion to REITstatus and is exploring whether an internal restructuring of the Group'sactivities, currently being considered by the Board and designed to enhanceshareholder returns and optimise the benefits of our proposed refinancing, wouldresult in the Group becoming eligible for admission to the REIT regime. HMRC isconsidering various aspects of this proposed restructuring and we will updateshareholders when there are significant developments to report. The balance sheet and cash flows of the business remain healthy, with debtratios in line with those reported at the end of September 2007. As previouslyindicated, we have capacity to refinance the Unique securitisation and we arereviewing all options with our advisers. In the meantime, we continue to buyback shares for cancellation and since 30 September 2007 have purchased 5.5million shares at a cost of £29 million excluding associated costs. Enquiries:Emma Baines, Investor Relations Manager 07990 550210Ted Tuppen, Chief Executive 0121 733 7700David George, Chief Financial Officer 0121 733 7700 Note to Editors Forthcoming dates ETI intends to publish its Pre-close Trading update for the six months to 31stMarch 2008 on 28 March 2008 and its interim results on Tuesday 13 May 2008. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
EI Group