Jim Armitage: Toast Enterprise’s boss for proving the true value of pubs

Enterprise Inns may still be a large debt pile with a pub company attached, but the balance is shifting.

Today, the landlord whose new name “Ei” is simply too awful to use sold a slug of boozers for £348 million. That will chip away at the £2 billion of debts it ran up in the wild days before the financial crisis.

The 370 sites are in the division it calls commercial properties — mainly pubs where the tenant is free from the “tie” that means they have to buy their beer from Enterprise.

Ale-loving chief Simon Townsend has spent the past three years carving them out so he can sell them and focus on the more profitable work of running pubs in-house or with the best tied tenants. More sales will follow as the process continues.

Pub valuations have long been a moot point. Pubcos estimate them too high and the stock market too low. So, Enterprise’s shares value it a third lower than its purported Net Asset Value.

Perhaps by way of answering the City’s critics, today’s 370 properties went for bang on their NAV. That has to be encouraging for investors.

But, just because Townsend can flog these at NAV doesn’t mean the rich valuation of the rest of the estate is right. Today’s sale was of dependable, inflation-linked rental properties. They’re far simpler than managed and tenanted pubs whose value depends on the nation’s falling consumption of beer.

Still, we should be relieved Enterprise’s NAVs aren’t completely potty. Pop in to the managed Duke of Sussex on your way home through Waterloo for further succour on that score.

Enterprise shares have come a long way in the past year, making a further rally unlikely. But toast Townsend for proving his strategy works.