Enterprise Inns adds to pub gloom as profit falls

By Matthew Scuffham

LONDON (Reuters) - Enterprise Inns (ETI.L), Britain's second-biggest pubs group, reported a decline in full-year pretax profit on Tuesday, adding to the gloom in the sector which has been hit by a smoking ban and impending recession.

Enterprise, which has over 7,700 pubs, said pretax profit before exceptional items fell by 12.6 percent to 263 million pounds, in the year to end-Sept, in line with the consensus market forecast, according to Reuters Estimates. The company maintained its final dividend at 10.4 pence.

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 over 9 million pounds supporting over 1,450 tenants struggling to cope with the worsening trading conditions during the year. The assistance was given in the form of rent concessions and special discount schemes.

In an interview with Reuters, Tuppen said he expected Enterprise would need to provide at least the equivalent level of assistance in the current financial year.

"It's most likely to be at least that level of licensee support in the current year and probably more because they are going to continue having a difficult time," he said.

Earlier this month, Britain's biggest pub operator Punch Taverns (PUB.L) also reported a drop in full-year profits and said trading in September and October had been "extremely challenging."