Capital Pub Co sees London turnaround

Capital Pub Company, the London-based pub operator, said today it had seen an upturn in trading throughout its key Central London market.

"Our pubs in Central London have been trading very well," said Clive Watson, Capital's chief executive, "plus we've revived those of our pubs in outer London that weren't trading as well as we'd like."

The 26-pub operator announced total turnover for the six months to September 26, 2009, up nine per cent at £11.1m.

Stripping out acquisitions made during the period revenues were up three per cent.

Adjusted earnings before interest, tax depreciation and amortisation rose 21 per cent to £3m, while adjusted pre-tax profits rose by a fifth to £1.4m.

Improved trading was the result of "better retailing at pub level, coupled with effective cost control", Watson said.

He added that the company's trading record throughout the period, together with its "conservative balance sheet" gave cause for confidence going forward.

"We've spent the last 15 to 18 months battening down the hatches. Now it's time to let out a bit of sail," he said.

Franchised food operations have been put into six of the group's pubs, a move designed to both improve the food offer available and to drive wet sales, he added.

Overall gross margins of 73 per cent were in line with March 2009 levels, Watson said.

Having bought two pubs in the second half, Capital was on the lookout for more deals, Watson said.

"Our strength is in picking up sites on a one-by-one basis. We don't have the balance sheet capability to buy packages of 10 pubs, but vendors know we will look after their staff when we do get one."