Enterprise Inns — the UK’s largest pub operator — saw its income grow in the South of the country, but pubs in the North “continue to face a more challenging economic and trading environment,” according to a bi-annual report.
The company has been expanding into the South to broaden its appeal. It currently has 2,272 pubs in the North and Midlands, and another 2,397 in the South.
Net income for northern pubs stayed flat at £45 million ($65 million) but grew 3.3% in the south to £94 million ($136 million).
Overall revenue in the six months up to April went up slightly from £302 million to £305 million ($443 million).
Enterprise pubs are operated by its tenants, who the company collects rent from. Many of the pubs used to be contracted under a “beer-tie,” which means tenants were obliged to buy certain drinks and food items from Enterprise Inns exclusively.
However in late 2014 MPs voted to end the beer-tie rules, which saw Enterprise’s share price drop 17% at the time.
In response, Enterprise decided in May 2015 to sell around 1,00o pubs and increase the number it manages directly to 800 by 2020. On June 7 it will sell a portfolio of 22 sites for £20 million.
Simon Townsend, CEO, said Enterprise Inns was making 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.”
Despite the flat revenues, investors seemed to like the bi-annual report, with share prices rising 3.62% as of 8:55 AM GMT this morning: