Enterprise Inns to speed up managed pubs rollout

LONDON, May 12 (Reuters) - British pub group Enterprise Inns (LSE: ETI.L - news) said it would expand its own managed division and ramp up its commercial property arm as part of plans to protect its business from a new law that will allow publicans to choose where they buy their beer.

Almost half of 50,000 UK pubs are run by tenants under traditional "beer-tie" agreements, which mean the publicans buy beer from the firm that holds their lease at above market prices, receiving subsidised rent or other benefits in return.

Some publicans have complained that such deals are unfair, prompting the government to introduce a law which will allow tenants renewing their leases to buy their beer elsewhere and choose a market rent only option.

The prospect of lost beer revenue has hit shares in Enterprise Inns and as well as rivals like Punch Taverns (LSE: PUB.L - news) , forcing them to come up with ways to offset the impact.

Enterprise Inns said on Tuesday that while it would continue to offer tied deals, it planned to increase the number of pubs it manages directly from around 16 now to between 750 and 850 pubs by September 2020.

The firm also said it would expand its commercial property division, which includes free-of-tie pubs as well as retail developments, from 185 now to between 900 and 1,000 properties.

Enterprise Inn raised its expectations for disposal proceeds to 75 million pounds ($117 million) for this fiscal year and next as it sells off non-core pubs and said it expected its estate to reduce to around 4,200 by 2020, compared to about 5,200 now.

The company made the announcement as it posted a 0.6 percent rise in like-for-like net income for the six months to March 31 and core earnings before exceptional items of 144 million pounds, in line with expectations.

($1 = 0.6423 pounds) (Reporting by Neil Maidment; editing by James Davey)