Debt-laden pubs group Enterprise Inns has reported an 8% fall in net income per pub in the first 16 weeks of the year.
But with hopes that it can make a dent in its £3.7bn debt mountain - perhaps by scrapping the dividend or selling pubs - the company's shares have climbed 3.75p to 35.5p.
Analysts, however, are not all convinced. Investec's Matthew Gerard advising holding the shares and said:
"The key metrics of licensee concessions and beer sales are no worse than expected after Punch Tavern's update last week. Nevertheless, like for like net income per pub is down 8% and, whilst comparatives get easier through the year, our full year estimates look too optimistic. Until we get visibility on the 'bottoming' of licensee support and dividend/refinancing issues, the shares are unlikely to re-rate, in our view."
Mark Brumby at Blue Oar Securities was more negative:
"This is a realistic but sobering statement. Enterprise says that confidence is hitting new lows and January is the worst month of the year for tenants and February is the second worst. Beer sales across the on-trade were -12% in December and, with companies such as JD Wetherspoon and Mitchells & Butlers outperforming strongly, tenants are likely to be suffering. To say that 2009 will be an extreme challenge for a large number of them is something of an understatement. Current year forecasts of around £240m and an unchanged 16.4p dividend are likely to be reduced. Profits could dip below £200m and we are retaining our sell recommendation."
Even so, the whole sector was lifted, with Punch Tavern's 3.25p higher at 35.5p and Mitchells & Butlers 13p better at 173p.
Overall the market it holding much of its gains, as are the banks. The FTSE 100 is ahead 71.52 points at 4131.40, with Lloyds Banking Group the biggest riser with an 9.7p gain to 54.8p. Royal Bank of Scotland is up 1.9p at 14.4p while Barclays is 4.4p better at 70.5p.
Energy companies have been lifted as the crude price climbed in anticipation of production cuts from Opec. BP is up 11.75p at 497.5p, while Royal Dutch Shell B shares are ahead 50p at £16.61.
