Capital looks for acquisitions in challenging market
Capital Pub Company believes the current challenging trading environment should provide it with further acquisition opportunities.
The 24-strong Greater London based pubco saw revenue increase 32% to £18.8m in the year to 29 March as the London market continues to outperform the rest of the UK.
David Bruce (pictured right with Clive Watson) has stepped down as chief executive making way for co-founder Clive Watson to take over.
It also reported a 26% increase in operating profit to £3.9m.
Pre-tax profits were down to £800,000 as a result of a non-cash accounting charge of £1.06m.
In the year, Capital acquired six pubs and completed a £1.6m refurbishment programme.
Capital's management agreement with Enterprise Investment Scheme Capital Pub Company 2 will be terminated from 31 August to allow Capital's management team to focus on building its own portfolio.
Acquisitions
Watson said that while Capital had no numerical target in mind for acquisitions, he did believe the current tough trading environment would provide some good value deals.
"If anyone is selling a pub it is generally because they are struggling, so there should be more pubs coming to market and we can use that to our advantage," he said.
"We won't rush in - we will be looking for freeholds in London as that is where we know and feel most comfortable.
"It is also the area trading most successfully at the moment."
Smoking ban
Watson said the company had not followed the hordes of others in focusing on food to combat the smoking ban. Food sales account for 19% of sales - just 1% up on last year.
"Overall the smoking ban has been a slight benefit to us," he said.
"It helped that 22 of 24 pubs have outside areas.
"One of things by concentrating on food is you incur higher costs such as staff and utilities and you also have a lower GP margin.
"Because we are buying so well, we can still make money from liquor."
Capital also announced it has signed a three-year deal with Scottish & Newcastle and Heineken.
