Enterprise Inns profit falls, eyes REIT conversion

By Mark Potter

LONDON (Reuters) - Enterprise Inns (ETI.L: Quote, Profile, Research), Britain's second-biggest pubs group, posted an 11 percent fall in first-half profit, in line with expectations, and said trading was likely to stay tough as consumers rein in spending.

The firm also said on Tuesday that it might be able to convert to a low-tax property company for the start of its next financial year on Oct. 1, the earliest date hoped for by analysts.

The British government ruled last week that Enterprise could convert into a Real Estate Investment Trust (REIT), boosting shares across the pubs industry on speculation more might be able to slash their tax bills.

"It would clearly be good if we can get it done by the beginning of the financial year and it's not impossible," Chief Executive Ted Tuppen told Reuters.

"We've got a timeframe that would seek to get us converted by the autumn."

Enterprise, which has about 7,700 pubs, just behind Punch Taverns (PUB.L: Quote, Profile, Research) on around 8,500, made profit before tax and one off items of 132 million pounds ($259 million) in the six months to March 31, in line with analysts' average forecast, according to a company poll.

"The consumer is continuing to take a real battering.... Costs are rising, taxes are rising, house prices appear to be under pressure," Tuppen said in a telephone interview.

But he said pubs were more resilient than many consumer-facing industries, such as retailing.