Shares in listed pub group Enterprise Inns leapt 14% to 179p in early trading, after the company announced that it was delaying its planned REIT conversion in order to preserve cash.
The jump in the share price came in spite of falling sales volumes and a gloomy outlook for the sector.
‘In light of the current turmoil in the financial markets, the board does not however consider it appropriate to seek the consent of bondholders [for REIT conversion] at this time,’ Enterprise said in a trading statement today.
‘We are therefore adopting a cautious approach to the costs and processes of conversion, continuing to work with our advisers to explore the options and to develop a solution which is demonstrably in the best long term interests of all stakeholders. We are not working to a particular timetable and will make further announcements as and when appropriate.’
Enterprise said that following investment in improvements to its estate, primarily to mitigate the effects of the smoking ban, there had been a slight net uplift in the value of its portfolio.
The company said that trading conditions had been difficult, because of the poor summer and weakening consumer spending, which will continue in the second half.
It said it expected earnings before interest, tax, depreciation and amortisation (EBITDA) to be down 5% compared to the second half of last year, and 3% down for the full year, due to weakening beer sales and the cost of licensee support in the form of rent concessions and special discounts.