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The City Pub Group looks ahead after reopening day

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: 66.78 GBX

AIM:CPC
Market: AIM
Market Cap: £69.29 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.

Trading was better in venues with more outdoors space as customers were reluctant to gather inside, even with safety measures.

“It was not quite the rush that I expected, I thought there would be more enthusiasm as pubs reopened,” executive chairman Clive Watson told Proactive. But it was steady… It was fine.”

According to Watson, the upcoming Treasury announcement should aim at supporting jobs in the hospitality sector, which is risking a spate of redundancies as early as this month.

“Even with one metre [social distancing] we are still in a state of lockdown to a certain extent, we will still need the furlough scheme… Otherwise lots of pub and restaurant companies will start laying off people.”

Interview

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 said it will reduce employee costs both at its head office and its pubs around the UK to save money amid the coronavirus pandemic, while its directors will also have their salaries reduced by 25%
  • Converted sites contribute fully for a year

What the broker says: Liberum 

City Pub Group's recent full-year results, while historic, are a reminder of the “strong trajectory” the company is on and can be expected to return once lockdown restrictions are eased, according to the company’s house broker.

In a note, analysts at Liberum also said the company had “the firepower to take advantage of new opportunities that this crisis will inevitably present, while remaining conservatively leveraged and retained their ‘buy’ rating on the stock alongside a reduction in the target price to 135p from 155p.

 

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Watch

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

3 min read