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The City Pub Group digs in and looks ahead after COVID-19 shock

Snapshot

  • Pub group with around 50 premium sites in 'cathedral cities'
  • Sites are wet-led/drinks focused
  • High-quality outlets are in demand and management has built and sold pub groups before
At the bar in the pub

Quick facts: City Pub Group Plc

Price: 93 GBX

AIM:CPC
Market: AIM
Market Cap: £96.5 m
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What it does

The City Pub Group PLC (LON:CPC) owns and operates almost 50 ‘wet’ or drink-led pubs across Southern England and Wales. 

At the helm is Clive Watson – a 30-year pub veteran, who is perhaps better known in younger circles as the dad of Made in Chelsea stars Lucy and Tiff.

Those in the City of a slightly older vintage are more likely to remember him for Capital Pub Company, which he set up with fellow industry veteran David Bruce in 2001, before selling it on ten years later to Greene King PLC (LON:GNK) for £93mln.

“Our whole rationale is to widen our target market as much as possible; to be ageless, classless, to be premium without being overly expensive or too posh.

“Really to be somewhere where anyone, as long as they behave themselves, can feel comfortable.”

How it’s doing

Like its peers, City Pub was finally allowed to reopen on July 4.

In September, City Pub, which at one time had 98% on staff on furlough, said it has now reopened 37 of its 48 pubs with revenues running at around 80% of previous levels, which was sufficient to generate positive cashflow.

City added it is also appraising its estate for alternative uses such as residential development.  

Even so,  results in the half-year to June 28 reflected the impact of lockdown restrictions with revenues 55% lower at £12.1mln and an adjusted loss before tax of £3.6mln.

What the boss says: Clive Watson

“Trading since reopening, given that there have been no sporting events or large bookings and given reduced opening hours, has been encouraging.”

"The group has improved gross profit margins by having less suppliers and improved operating margins due to having less labour and overhead costs, as well as reductions in head office costs."

Inflexion points

  • In late March the company raised £22mln to strengthen its balance sheet after the coronavirus pandemic forced the closure of its pub estate
  • The group has reduced employee costs both at its head office and its pubs around the UK to save money amid the coronavirus pandemic
  • Group looking at alternative uses for some sites

 

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City Pub Group raring to go as re-opening date gets nearer, says chairman...

Clive Watson, executive chairman at The City Pub Group (LON:CPC) says the group is raring to go as the time pubs are allowed to re-open in the UK again gets nearer. Around 40 of its 47 pubs have what Watson describes as very good beer gardens and it is these type of outlets that are expected...

on 28/5/20

2 min read