The money is being used to support the most badly hit of Enterprise Inns' 7,700 pubs, and is offered to struggling landlords in the form of discounts, rent concessions and price freezes. And that’s on top of the £700,000 a month Enterprise is already spending on freezing the price of five popular lager and ale brands, according to some reports.
The news emerged as Enterprise announced its – suitably dire - results for the year to the end of March. Underlying profits down 22% to £103m sounds bad enough, but by the more conventional measure of profits before tax the firm made only £9m. Ouch. The £94m difference (now that really is an exceptional charge) was due largely to a hefty downward revaluation of its 7,700 strong pub estate. Chief exec Ted Tuppen probably needs a drink or two after having to explain away that little lot.
It gets worse, too – Enterprise is scrapping its interim dividend to help it pay down more of its £3.8bn debt pile. Good for the long term health of the business, but likely to be about as popular with cash-strapped investors as a maraschino cherry in a docker’s pint.
Tuppen – a glass half empty kind of guy who is on record as stating that he expects 10% of Britain’s pubs to close by the end of the recession – did his best to go against the stereotype image of the money-grabbing pub owner, offering these words of comfort to beleaguered licenees. ‘Despite the financial cost to our business, we believe it is right to continue to provide substantial direct financial assistance to help deserving licensees during this severe recession.’
But he did then go on to say that the firm was struggling with a worse than usual ‘poor quality landlord’ problem and had been forced to take ‘robust action’ against the worst performing 100 or so of then. ‘In more normal times, an underperforming landlord can move on easily by selling the license to someone else’ said Tuppen. ‘But clearly there are many fewer buyers today.’
He also – in common with most other business people these days – had a few harsh words for the Government, calling the 20% increase in duty in the past year ‘aggressive’, and lamenting the lack of official support for the industry generally.
But then Gordon, Alastair et al have got plenty of troubles of their own these days. Perhaps if a few more not-so-Honourable Members could be persuaded to drown their sorrows in the local pub instead of in one of Westminster’s numerous subsidised bars, the problems of two of our great national institutions could be halved at a stroke.
In today's bulletin:
Recovery hopes surge as Easter eggs on retail sales
Businesses landed with higher minimum wage
Enterprise Inns spends millions propping up its own bars
Why UK shoppers still don't trust the internet
Editor's blog: MP expenses are a dangerous distraction