Enterprise sells Scottish pub estate

Enterprise Inns yesterday announced it has sold its entire Scottish pub estate to the property tycoon Robert Tchenguiz in the wake of the ban on smoking.

The group offloaded 137 pubs for £115m to Mr Tchenguiz's vehicle Retail & Licensed Properties, generating a profit of £13m. News of the deal came as the group posted an 8.6 per cent rise in full-year profits to £315m in line with expectations and raised its year dividend by 50 per cent to 27p. Enterprise also said it was extending its share buyback programme, which last year saw £463m returned to shareholders. It said it expected at least the same level of return this year.

Ted Tuppen, the chief executive, insisted the decision to sell the Scottish estate was strategic and not based on the effects of the smoking ban in Scotland, where trade had dipped by 1-2 per cent. "It's genuinely a strategic sale based on not having critical mass in Scotland," he said. "It is a good time to be selling pubs as prices are very high."

The company invested £54m of capital expenditure in the estate during the year, much of which went towards preparing pubs for the extension of the smoking ban next year. In addition, Enterprise sold more than 700 pubs with a "beer and fags" focus in England and Wales to Admiral Taverns.

Mr Tuppen said the ban should be seen as evolution and not a revolution. "It is an opportunity rather than a threat," he said.