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The City Pub Group shores up finances into 2020

Snapshot

  • Pub group with 47 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: 94 GBX

AIM:CPC
Market: AIM
Market Cap: £97.53 m
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What it does

At a time when pubs are closing at a rate of knots, City Pub is expanding.

The City Pub Group PLC (LON:CPC) owns and operates 47 ‘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

In January, City Pub said total turnover for the 2019 year was £59.8m, an increase of approximately 31% on the prior year with like-for-like sales up by 1.7%.

Profit expectations were trimmed, though, with underlying profits forecast to be between £9.1mln and £9.2mln, which was approximately 15% ahead of 2018.

A number of ‘one-offs’ were blamed for the undershoot including election uncertainty, rail strikes and rain in November and December.

Like-for-like sales over the six-week period ending 5 January 2020 were marginally ahead of prior year.

Two site conversions also took longer than expected, which mean they missed the Christmas trading season.

Portfolio  

Aragon House in Parsons Green, West London is described by the company as the most successful pub it has ever opened.

This year, 2020, will also see a full year’s contribution from the Hoste, Burnham Market, the Market House, Reading, and the Pride of Paddington.

Three large new sites are under development and should open this year in Exeter, Cambridge and Bath, all a sites that fit in the company’s target of cathedral cities (broadly) where, in most cases, there is a large student population, lots of tourists coming along and lots of local businesses.

Interview

Inflexion points

  • In late March the company unviled plans to raise £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

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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...

2 days, 13 hours ago

3 min read