City Pub Group: 2023 lfl sales 13% ahead of last year
The group, which operates 43 pubs across southern England and Wales, said revenue rose 63% to £57.8m (2021: £35.4m), for the 52 weeks ended 25 December 2022, as sales returned to pre-Covid levels.
Its adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) rose by 111% to £8m (2021: £3.8m) and adjusted profit was up by 280% to £3.8m (2021: £1m).
Despite it being a challenging year for both the industry and consumers, the group has a “fully refurbished and very well invested estate” with a “strong financial base” and “historically low levels of debt”.
Its pub estate group has increased by three since its previous interim results in September 2022 with the Bath Cider House opened in October 2022, Potters in Newport acquired in November 2022, and the Bridge, Barnes, south-west London purchased in January 2023 this year. These follow three openings in the first half of 2022 of Oyster House, Mumbles, in May 2022; Tivoli, Cambridge, also in May 2022; and Damson & Wilde, Bury St Edmunds, in June 2022.
Historic low net debt
The group’s balance sheet shows an historic low of £4m net debt at year end with the disposal of six sites reaping £16m, which was also helped by the disposal of three non-core leaseholds.
City Pub Group’s freehold estate now represents 61% of its pubs.
The business also launched a share buyback programme in September 2022 and has bought about 1m shares (representing 0.95% of the issued share capital) at a cost of circa £0.83m.
Following the acquisition of a further 13% share in Mosaic Investments in April 2023, the group now has a stake of 48% at an additional cost of about £2.2m and plans to integrate the Mosaic estate – which comprises nine sites in London and Birmingham – into its own portfolio over the course of the next two to three months meaning the business has 52 operational sites.
City Pub Group chairman Clive Watson said: “The group has achieved a pleasing performance through 2022, demonstrating the strength of our adaptable model and ability to recover following covid and through the challenging conditions of the last year.
“Our premium estate is now fully refurbished creating, together with the strengthened management team, a platform for expansion when the time is right.”
Confidence for coming year
He continued: “Our near-term ambition is to continue to premiumise the pub estate to deliver additional organic sales and profit growth. We have seen an encouraging start to the year, with trading ahead of expectations which, while still early in the year, provides confidence for the coming year.
“The company continues to be primarily focused on organic growth rather than acquiring additional pubs, however, should an outstanding opportunity arise we have the flexibility to act quickly and decisively.”
On energy prices, the group said while costs are still much higher than before the start of the Ukrainian conflict, they have significantly reduced since its previous report in September 2022 and has around 35% of its energy hedged over the next two years.
The group continues to call upon the Government to grant two-year work visas to Europeans to tackle labour shortages and said business rates should be more focused on what businesses generate in terms of sales and not where they are located.
The report stated: “Pubs are important part of the community and should not be taxed unfairly just because they provide a service to our loyal local customers in our cities.”
