City Pub Group sales increase by £3.9m
The total year-on-year sales figure increased from £16.1m in 2017 to £20m this year, largely aided by trading during this summer's World Cup and heatwave.
Other highlights from the statement included a 25% increase in adjusted EDITDA (earnings before interest, tax, depreciation and amortisation) from £2.4m to £3m and a 73% increase in adjusted profit before tax to £1.6m – with reported profit after tax standing at £760,000.
Moreover, the 11 weeks trading since 1 July have yielded a 24% sales increase.
The group has also opened nine pub venues so far in 2018, in addition to the company’s first all-vegan venue, operated by Made in Chelsea’s Lucy and Tiffany Watson, as reported by The Morning Advertiser.
A further four sites are in development, with the business ahead of schedule in its plans to double in size to between 65 and 70 sites by 2021, anticipating that it will operate more than 50 pubs by mid-2019.
‘Strong progress’
Discussing the results, Clive Watson, executive chairman of City Pub Group, commented: “The strategic expansion of our high-quality drink-led estate has been key to the strong progress we have made in the first half.
“We were well positioned to capitalise on the excellent weather and our sports-orientated pubs have benefited significantly from the World Cup.
“The nine new sites we have brought on stream over the course of 2018 have contributed to the increase in sales and group EBITDA, which is reflected in today’s results.
"The momentum from the first half has continued into the second half and in the eleven weeks since July 1 we have seen sales increase by 24%.
“We are ahead of our original target to double the number of pubs operated by 2021 and expect to have 50 by mid-2019. This will be assisted by softening conditions in the acquisitions market and limited competition for sites.
“We are confident of meeting market expectations for 2018 and believe we have the right team and strategy to continue making progress.”
Increasingly liquor-led
Looking ahead to the rest of 2018, Watson told The Morning Advertiser: "In terms of sales growth, because we've got a lot of acquisitions coming through, I think we'll be able to maintain the momentum and possibly even increase the momentum. No worries there.
"Obviously any business in any environment is going to face its challenges, that's all part of managing a business.
"I don't think there's a pub company in the country that's not finding recruitment in the kitchen more challenging, but having said that about six to nine months ago we decided to go more liquor-led on our sales mix. We're 70% liquor anyway and I see that going up to 75% over the next two years, probably food being only around 20% going forward.
"Not in an exaggerated sort of way, but we're moving the model towards more liquor sales and having rooms above the inn as well."
Pendulum swing back to the buyer
Discussing the group’s expansion to 42 trading sites, Watson added: "There's less competition for sites. The opportunities are probably the same as normal but there's less competition from property developers, property investors, restaurant companies and even some of the pubcos, in terms of individual sites.
"I'm not saying we're the only show in town but I'm seeing the opportunities that are presented to us and less competition for those sites which means it increases our availability. It also means we can be a bit more canny on the price we pay. I think the pendulum has swung back to the buyer.
"The great thing about being in the cities we're in is that you get different heads during different parts of the day. So you get business people after work, tourists during the day, students a bit later on in the evening, residents at weekends."
