A near-doubling in size, allied to organic like-for-like growth in its core pub estate, helped Enterprise Inns boost its annual profits by one third.
In the year to 30 September, the unbranded leased and tenanted pub operator lifted pre-tax profits before exceptional items by 33%, from £173m to £231m.
Turnover rose by 48%, from £480.6m to £712.7m, while operating profit soared by 37% to £402.7m.
This sturdy growth was driven by an 8% rise in operating profit per pub across the core estate and by acquisitions that expanded the group from 5,087 to 8,727 pubs with a value of £4.9b.
The most significant buy was Enterprise's acquisition, for £608.9m, of the balance of equity in the Unique Pub Company it did not already own, which was completed in March. For the previous two years, Unique had been independently managed as an associate business.
The results include a full profit contribution of £123m from Unique in the second half of the year, and a 16.8% share of its profits (£19m) in the first half.
The Unique buy added 4,054 pubs to the Enterprise portfolio, although it subsequently sold 239 of them to Admiral Taverns for £61m to avoid the takeover being referred to the Competition Commission.
In the course of the year, Enterprise Inns also bought 22 pubs for £12.9m and sold another 197 for £49.5m.
The company invested more than £50m in improving the quality of the estate, with licensees contributing an additional £60m.
The group said that there were now just 152 pubs whose potential operating profits fell below £15,000. More than two-thirds of the estate should make profits in excess of £30,000, with half of these likely to earn more than £45,000.
Chief executive Ted Tuppen said the current year had started well. A priority for the group is to complete the integration of Unique into its portfolio by April 2005.
It has already merged the sales, administration and supply systems of Unique with Enterprise and, although closure and redundancy expenses totalled £15m, it expects the merger to generate savings of £25m a year.
by Angela Frewin
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