City Pub Group PLC (AIM:CPC) said trading continued to be strong for the first 23 weeks of the year with “clear evidence” costs are coming down in some areas.
Sales for the pub operator were up 20% in the 23 weeks to 4 June 2023 compared to last year, with like-for-like sales increasing by 13%, although this would have been higher if not for rail strikes.
Performance, it said, was largely driven by its strategy to further "premiumise" its estate and focus on customer service.
Costs have remained in line with expectations, and while food inflation remains high, there is “clear evidence of abatement” in some areas.
"The strategy that we have pursued over that last couple of years is now manifesting itself in our outperformance. We have an excellent estate of high-quality premium pubs, well invested, located well and trading strongly,” said chairman Clive Watson.
City Pub also said it has secured 52% of the share in Mosaic Pub and Dining Group for a total cash consideration of £700,000, taking its total investment to £7mln.
From 26 June, City Pub will assume control of nine Mosaic pubs across London and Birmingham, it said.
The group’s net debt stands at £8mln, while it is also £25mln undrawn on its existing revolving credit facility, giving it the flexibility to achieve its goals.