City Pub Co EBITDA nears £1m in 'transformational' year

05-Jun-2014 - Last updated on 06-Jun-2014 at 07:51 GMT

Related tags City pub company Investment

Clive Watson said by the end of January 2015 turnover will exceed £20m

City Pub Company, the Enterprise Investment Scheme (EIS)-backed operator, has reported EBITDA of £912,166 in a “transformational” year to 29 December.

It expects this to reach as high as £8m by 2017 as the company grows to c30 sites, chief executive Clive Watson has told the Publican's Morning Advertiser's sister title M&C Report.

Turnover for the group, which is to focus on investments rather than acquisitions until late this year, grew 265% to £8.7m and Watson predicts it will reach c£20m by the end of next January when all its 17 current sites are trading. City operated eight sites on average in 2013, against three in 2012, and has acquired five so far in 2014.

EBITDA in the nine-pub City Pub Company (East), grew 3,185% to £725,739 on turnover up from £1.3m to £5.5m. In the seven-strong City Pub Company (West), EBITDA rose 167% to £186,427. Turnover grew from £1.1m to £3.2m.

Watson said: “Once all our sites are open by the end of January 2015, turnover will exceed £20m. That’s a massive leap from £3m last year.”

The company has put one site, the Three Black Birds in Newmarket, up for sale. Bierschenke, City’s German beer house on the Strand, central London, is to receive an on-site brewery.

Watson said: “Last year was a busy, transformational period for both companies, which included fund-raising, acquisitions and refurbishments. This mo-mentum has continued into 2014 as we grow a high quality estate of non-branded pubs that cater to their individual local markets.”

‘Flotation possible by end of 2015’

He added that flotation on AIM is a “definite possibility”, maybe by the end of next year, with a convertible preference share offer also an option.

City would have raised £27.8m by October 2014. Watson told M&C Report that City would “definitely” organise some kind of fundraising next year but not via EIS, because the limit under the tax-efficient scheme has been reached.

Watson said: “I think it will be a convertible share or AIM flotation.

As we’re a young company we need to have a good trading track record, so that might push out a flotation, to the end of 2015."

A trade or private equity sale is unlikely, he said.