Enterprise Inns reports like-for-like net income up 1.8%: Enterprise Inns has reported Ebitda before exceptional items of £142 million (H1 2015: £144 million) in the six months ended 31 March 2016, in line with expectations and reflecting the impact of planned disposals. Profit before tax and exceptional items was £57 million (H1 2015: £57 million) as interest savings from reduced debt offsets reduction in Ebitda. It reported the business is performing well with continued growth momentum and strategic evolution on track, providing a clear path to ‘maximising shareholder value through the optimisation of returns from every asset’. Leased and tenanted like-for-like net income was up 1.8% (H1 2015: 0.6% growth) across the whole estate. Improved publican profitability and enhanced operational support have helped to further reduce unplanned business failures, down 9% compared to the prior year. Commercial property like-for-like net income was up 5.2% (H1 2015: 5.0% growth). It reported a rapidly expanding portfolio with 264 commercial properties at 17 May 2016 at an average annualised rental income of £59,000. It added: We have signed an unconditional contract, which will complete on 7 June 2016, for the sale of a portfolio of 22 sites for £20 million (17 pubs and five convenience stores), at a yield of 6.7% and premium to book value of 9%, demonstrating the inherent value of our commercial property portfolio. The total number of managed pubs trading at 17 May 2016 stands at 75 with 21 trading under our Bermondsey operation, 50 under our Craft Union operation and four within Enterprise Managed Investments. We have now partnered with three managed experts and have a strong pipeline of interest from other exceptional operators. Chief executive Simon Townsend said: “We are continuing to make good progress. Our leased and tenanted business is maintaining its growth momentum while the rapid expansion of our managed operations and commercial property portfolio is on track and delivering results in line with our expectations. We are confident that the execution of our strategy is demonstrating a clear path to maximising long term shareholder value and our returns driven approach to allocating excess cash will deliver near term benefits to all our stakeholders.” Julia Poulson, who has over 25 years property market experience and is currently property director for Domino’s Pizza Group, will join the company in August 2016. The company stated: “She will lead the evolution and expansion of the company’s quality commercial property portfolio and oversee investment in our reinvigorated leased and tenanted estate and our growing managed house businesses.” Of its three manage formats, it stated:

Craft Union Pub Company: “Our largest managed house operation is the Craft Union business which operated 42 sites at 31 March 2016, now operates 50 sites and which we expect to be operating around 70 sites by 30 September 2016. This business predominantly operates in the north of England, but is beginning to expand south and we expect its offer to appeal nationally. Currently, its offer is wet-led with quality beers, at affordable prices, served in local, well-invested, community pubs. The simplicity of the offer mitigates any execution risk and also limits the required capital investment. As we enhance our offer and accelerate the rollout programme we would expect these pubs, on average, to generate site Ebitda in the range of £80,000 to £100,000 which, after an average capital investment in a range of £75,000 to £100,000, are expected to yield returns on investment in excess of 15%.”

Bermondsey Pub Company: “As at 31 March 2016 we operated 16 managed pubs within our Bermondsey business. As of today we operate 21 pubs and expect to have in excess of 25 pubs in this model by 30 September 2016. These Bermondsey pubs operate under two retail propositions. We have 16 sites operating successfully in our “Meeting House” format, an upper mid-market, mixed food and drink offer. We also have five sites operating under our “Friends and Family” format which is in the value-led segment of mixed food and drink offer. These five sites are not achieving the desired level of returns for the Group and we have decided that this highly competitive retail segment is not a priority for further capital investment. We are currently processing these sites through our asset optimisation and segmentation model to reassess their optimal use and during the second half of the year will implement the proposed changes, which may involve disposal, free-of-tie let, tied tenancy let or an amended retail offer within managed operations. As we extend our offers within the Bermondsey business we would expect the average capital investment to be in the region of £200,000 with average site Ebitda expected to be in the range of £125,000 to £175,000 and yield returns on investment in excess of 15%.”

Enterprise Managed Investments: “In order to compete successfully in certain retail segments, pub operators have to be innovators and highly flexible so they can adapt to changing consumer needs. The offer can be complex and so the operational execution risk is heightened, as are the potential rewards for those that do succeed. We have developed a partnership “Expert” model whereby we can work with carefully selected managed house operators to share in the benefits of trading certain high quality establishments in our estate. Hippo Inns was our first partnership, established with Rupert Clevely, founder of Geronimo Inns, and we currently have four pubs in operation, with a further two openings planned in the coming months. Subsequent partnerships have been agreed with the creation of Mash Inns, a new venture with Laine Pub Group and also with the creation of Frontier Pubs, a venture with Food & Fuel led by Karen Jones, and a pipeline of sites for each venture has been identified. Laine Pub Group will also be providing us with support and advice on the next stage of development of our Craft Union Pub Company. We aim to announce further partnerships in the second half of the year and expect to have ten pubs trading under our various relationships by 30 September 2016.”

Upham Group suspends flotation plans: Upham Group, which operates a portfolio of 15 venues, has suspended plans to float amid market uncertainty ahead of next month’s Brexit float and fragile consumer confidence, The Times has reported. It plans to revive flotation plans in the autumn. Upham would have had a market valuation of £35m under original plans to floats on AIM later this month. Last month, Upham Group announced plans to raise up to £12m to fund further acquisitions. At the time, it said it hopes to double the size of its estate to 30 pubs in the medium term, subject to funding. The business is expected to begin trading on AIM on 26 May. Upham is led by chief executive Chris Phillips and deputy chief executive and estates director David Butcher, who were recruited in 2011 to develop and roll out a pub acquisition strategy. Upham Brewery brews three regular ales (Punter, Tipster and Stakes) and nine seasonal ales. It supplies about 300 local pubs and also sells its beer bottles through Majestic, Co-Op and Tesco.