Tuesday, September 22, 2009

Enterprise hopes to raise £14.7m at auction

"A spokesman for Enterprise said: “We believe that these properties will be very attractive to professional commercial property investors offering yields of around 6% on expected selling prices. In addition, investors will benefit from Enterprise's high quality covenant."

It's a laugh isn't it. These people are so used to making money out of nothing they believe it's going to go on for forever. In case no one's noticed it could currently be interpreted that Enterprise's covenant, like many other pubcos', is in serious jeopardy. Why are they selling these pubs? To repay debt?

Debt they incurred when it was cheap and rents and barrellage income were going, as far as the myopic piggy eyed vision of the bean counters could see, to continue to increase forever. You know, a couple of years ago - before the world woke up to SUB PRIME.

By the way that's debt which has interest payments amounting to something paltry like FORTY GRAND per pub per year. That's where your rent and rip off beer prices goes - to pay off INTEREST on pubco loans. Now that's what I call sustainable business.

No wonder the pubcos can't give an inch when tenants ask for COP rent reviews, concessions and better discounts on supply. That's why pubcos start blaming tenants for the trouble they've brought on themselves - there's only so much blame they can heap on the government and those nsty wasty supermarkets. These pubco CEOs need to do a bit of navel gazing, make some serious decisions based around morality and the inevitable crash they've skated around so far and throw the towel in.

Go on guys, you're all going to get out alive with a house and a wedge in the bank - unlike the thousands of people whose lives got entangled with your 'business model' that put you where you are and they in the dustbin of life.

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