Jubilee celebrations and Euro 2012 sorrows-drowning could not entirely overcome the effects of wet weather at cash-strapped pubs group Enterprise Inns in the second quarter of 2012.
"The 18 week period since the half year has been interesting and challenging," Enterprise admitted, as it tried to put a brave face on the slap on the face delivered to it by the British weather.
The group reported an increase of 1.6% in its like-for-like (LFL) income per pub during the 44 weeks to August 4th, as trading continued an improving trend toward growth.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
During the 44-week period LFL income in the total estate was down by only 1.2% (compared to a 5.1% year-on-year fall in the same period last year and a 1.6% year-on-year fall in the first half of the current financial year).
"The Jubilee celebrations in June provided a welcome boost to publicans in a similar fashion to the Royal Wedding in April last year. The UEFA European championship in June also provided some assistance to trade, but was significantly outweighed by the dampening effect on trade from the record breaking rainfall throughout the period," the company said.
"It is encouraging that despite such bad weather, the 18 weeks LFL income performance for the total estate has improved upon the first half," the group added.
Total proceeds from disposals for the 44 week period were £148m and the firm expects full year proceeds to be in the region of £200m with an expectation of a further £150m next year.
In the financial year to date it sold 121 unsustainable pubs for proceeds of £26m and 82 exceptional properties for proceeds of £98m, at an average multiple of 14 times income and at a significant premium to book value.
The firm continued: "Cash generation from trading and from disposals remains strong and has enabled us to not only reduce bank debt, but also longer term bond debt. We have prepaid a further £10m of floating rate A2N securitised bonds since the half year and we expect to make advance repayment of the remaining £19m floating rate securitised bonds by this financial year end such that they are fully repaid one year ahead of schedule."
Total capital expenditure for the full year will be in the region of £60m reducing over time to a normalised level closer to £50m per annum.
Enterprise added that the Olympics has not materially affected its trading performance, although it believes the positive sentiment from continued British success should encourage customers to celebrate in their local community pubs.
It warned that this year's poor summer weather has "undoubtedly affected trade for our publicans in the near term but our strategy remains clear and the quality of our pub estate combined with the resilience of our publicans will ensure we deliver results for the full year in line with our expectations".
The share price rose 4.96% to 58.25p by 10:05.
NR
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
