RNS Number : 3259B
City Pub Group PLC (The)
20 September 2018
 

The City Pub Group PLC

(the "City Pub Group", the "Company" or the "Group")

 

INTERIM RESULTS FOR THE 26 WEEK PERIOD ENDING 1 JULY 2018

 

Strategic expansion drives sales and EBITDA growth as business continues to make strong progress

 

The City Pub Group is pleased to announce its unaudited results for the 26 weeks ended 1 July 2018. The Group operates a predominately freehold estate of 42 wet-led pubs in London, Southern England and Wales.

 

Highlights:

·     Sales up 24% to £20.0 million (2017: £16.1 million)

·     Adjusted EBITDA* up 25% to £3.0 million (2017: £2.4 million)

·     Adjusted profit before tax** up 73% to £1.6 million (2017: £0.9 million)

·     Reported profit/(loss) after tax of £0.76 million (2017: (£0.05) million)

·     11 weeks trading since July 1 has seen sales up 24%

* Adjusted earnings before exceptional items, share option charge, interest, taxation, depreciation and amortisation.

** Adjusted profit before tax is the profit before tax, share option charge and exceptional items.

 

·     Strategic expansion with 9 pubs opened in 2018. This increased number of sites and wet-led focus of the business resulted in substantial EBITDA and sales growth. Progress has continued into the second half with sales up by 24%.

 

·     With a further 4 sites in development, further sites in the hands of solicitors and others in negotiation, the business is ahead of its strategy to double in size to 65-70 sites by 2021 and anticipates operating more than 50 pubs by mid-2019.  

 

·     The Group's innovative Profit Share Scheme will continue and from 2019 employees are set to benefit from it on a more frequent, semi-annual, basis.

 

 

Clive Watson, Executive Chairman of The City Pub Group, said:

 

"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 benefitted significantly from the World Cup. The nine new sites that 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.

 

20 September 2018

 

This announcement contains inside information for the purposes of EU Regulation 596/2014.

 

 

Enquiries:

 

 

 

City Pub Group                                                                                                                                       Clive Watson, Chairman

Tarquin Williams, CFO

 

 

 

 

Instinctif Partners

Matthew Smallwood

Andy Low

 

 

 

Liberum (Nomad & Joint Broker)                      

Chris Clarke

Trystan Cullen

Clayton Bush                                         

 

 

 

Berenberg (Joint Broker)                                   

Chris Bowman

Toby Flaux

Marie Stolberg

 

 

 

For further information on City Pub Group pubs visit www.citypubcompany.com 

 

CHAIRMAN'S STATEMENT

 

The Group has continued to make strong progress and build momentum in the first six months of the 2018 financial year. Following admission to AIM in November 2017, our ambition was to double the size of the estate by mid-2021 to 65-70 pubs. With 42 pubs now trading and a further 4 sites in development we are ahead of plan.

 

During the first half sales were up 24% to £20.0 million (2017: £16.1 million), adjusted EBITDA* up 25% to £3.0 million (2017: £2.4 million) and operating margins continued their upward trend. Adjusted profit before tax** was up 73% to £1.6 million (2017: £0.9 million). Reported profit/(loss) after tax was £0.76 million (2017: (£0.05) million).

 

These results have been achieved through acquisitions and investments made in 2017 and organic growth across the rest of the estate. The Company benefited from the good weather across the summer and our wet-led sport pubs from the World Cup.

 

As we have continued to acquire new sites the Group has taken advantage of economies of scale driving an improved financial performance. 

 

The Board is pleased with the significant increase in the Group's adjusted EBITDA performance. Operating (EBITDA) margins have increased from 15.0% to 15.1% (restrained by higher PLC costs as a result of the AIM listing). Margins are anticipated to increase further as the central overhead base becomes more efficient.

 

The City Pub Group has grown from a start-up in 2011 to an estate of 42 pubs operating today through selective acquisition of predominately single sites. These are then refurbished, their offer targeted specifically to their local marketplace and managed by well incentivised operators who have a passion for delivering a consistent, high quality experience for customers.

 

The Group has a strong balance sheet and low gearing with current borrowings of only £14 million, which roughly equates to the value of our freehold backed sites that are currently closed and being developed. Net debt to EBITDA is around 2 times and this is anticipated to reduce significantly once the 4 development sites are open and trading. The Group has in place a £30 million revolving credit facility expiring in July 2021. We are currently reviewing options for increasing and extending the length of our banking facilities.

 

City Pub Group maintains a strong pipeline of target acquisitions, further sites are in the hands of solicitors and others are currently being negotiated. Once completed, and with the new development sites coming on stream, the trading estate is expected to increase to around 50 pubs by mid-2019.

 

Trading Estate

 

The Group operates 42 high quality predominately drinks-led pubs and we are continuing to grow through selective acquisitions. Since the start of the financial year, the Company has opened 9 pubs, an acceleration from the previous year. Following acquisition, The City Pub Group invests and refurbishes its sites to improve performance and deliver strong returns.

 

The Company has paid approximately £12m in consideration for the following sites that have opened during the current year:

 

-     Belle Vue, Clapham Common, February 2018

-     The Covent Garden, Covent Garden, April 2018 (closed in September for refurbishment)

-     Tell Your Friends, Parsons Green, May 2018

-     Old Ticket Office, Cambridge, June 2018

-     Pontcanna Inn, Cardiff, June 2018

-     Traveller's Friend, Woodford Green, July 2018

-     Jam Tree, Chelsea, July 2018

-     Jam Tree, Clapham, July 2018

-     Alfresco, Brighton, August 2018 (will close in October for refurbishment)

The Group has also focused on acquiring development sites which do not attract goodwill payments.  This strategy enables the Company to re-develop and modernise them whilst retaining the character of the venue and appealing to a broad range of customers and tastes.  Clearly, with planning permission sought in most cases, there is a longer transition time between acquisition and reopening.

 

The latest estimates for opening of the Company's 4 development sites, acquired late in 2017 and early 2018, are:

 

-     The Bicycle Shed, Oxford, Q4 2018

-     Aragon House, Parsons Green, Q2 2019

-     Former bank premises, Reading, Q3 2019

-       Tivoli, Cambridge, Q3 2019

Changes in estimated opening schedules have been caused purely by external factors namely delays in planning permissions. The Board remains confident that the refurbishments will add significant value to the sites.

 

To manage the rapid growth of the business, in the first half, we have continued to develop our head office team, improve our retailing standards and increase the profitability of the company. We invested approximately £3m refurbishing new sites and maintaining the existing estate.

Market

Despite the macro economic outlook and potential disruption to consumer confidence by the uncertainty of Brexit, the Board believes that the Group's well-invested estate of pubs, which trade as 'individual, local' pubs should continue to perform well, even if the market becomes tougher. Our pubs offer customers local beers, wines & spirits and menus focus on local produce along with healthy vegan and vegetarian dishes.

The Board believes that the market appetite for acquisitions is softening driven by uncertainty about the outcome of Brexit and business rates. Furthermore larger pub companies continue to rationalise their estates to focus on their key target markets. These factors will benefit City Pub Group. Already we are experiencing less competition for sites and we intend to take advantage of this as we expand our portfolio of pubs. We have a large pipeline of potential opportunities at attractive prices, but continue to be disciplined in our approach.

 

Employee Profit Share

 

Our staff are our most important asset and retaining them is central to fulfilling our ambitions for the business. This is why we have a strong rewards programme including our industry leading Profit Share Scheme which enables all employees to share in the Company's success. Not only does this ensure we minimise staff churn, but we believe the success of the business demonstrates that it also gives our team members an additional performance incentive. 

The overall profit share payment represents 3% of the Group's EBITDA less bank interest and this is shared equally among all employees who have been with the business for at least a year. In 2019, it is the Board's intention to pay this on a semi-annual basis.

 

Dividend

 

As is normal for the Group, the Board is not declaring an interim dividend and will declare dividends annually. The Company's policy is to progressively increase dividends with the Group's profitability. As last year, a scrip dividend alternative will also be available to shareholders.

 

Current Trading & Outlook

 

For the 11 weeks trading since 1st July, sales are up 24% against last year primarily driven by the increase in the number of trading pubs. Our strategy over the last two years has seen the business grow from 24 sites to over 40. Whilst delivering this growth, the Company has faced the challenges of rising employee costs, business rate increases and the increasing uncertainty surrounding Brexit. The Company has delivered and managed its growth despite these headwinds.

 

We have some great pubs and an experienced head office team which remain ambitious and determined to ensure the City Pub Group develops further as a leading independent pub retailer.

With new openings earmarked for the remainder of the second half of the year, we remain confident of continuing our strong progress, meeting market expectations and benefitting from attractive acquisition opportunities.

 

Clive Watson

Chairman

20 September 2018

 

 

* Adjusted Earnings before exceptional items, share option charge, interest, taxation, depreciation and amortisation.

** Adjusted profit before tax is the profit before tax, share option charge and exceptional items

 

Consolidated Statement of Comprehensive Income

For the 26 weeks ended 1 July 2018

 

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

 

26 weeks ended

 

26 weeks ended

 

53 weeks ended

 

 

 

 

1 July 2018

 

25 June 2017

 

31 December 2017

 

 

Notes

 

£

 

£

 

£

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

19,965,490

 

16,120,216

 

37,403,515

 

Costs of sales

 

 

(5,017,258)

 

 (4,157,297)

 

(9,657,731)

 

Gross profit

 

 

14,948,232

 

11,962,919

 

27,745,784

 

Administrative expenses

 

 

(13,842,650)

 

(11,498,272)

 

(27,019,242)

 

Operating profit

 

 

1,105,582

 

464,647

 

726,542

 

 

 

 

 

 

 

 

 

 

Reconciliation to adjusted EBITDA*

 

 

 

 

 

 

 

 

Operating profit

 

 

1,105,582

 

464,647

 

726,542

 

 

 

 

 

 

 

 

 

 

Depreciation

7

 

1,207,086

 

929,467

 

1,963,891

 

Share option charge

 

 

181,094

 

144,594

 

258,195

 

Exceptional items

3

 

514,443

 

872,009

 

3,200,643

 

 

 

 

 

 

 

 

 

 

*Adjusted earnings before exceptional items, share option charge, interest, taxation, depreciation and amortisation

 

 

3,008,205

 

2,410,717

 

6,149,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance costs

 

 

(173,725)

 

(542,833)

 

(986,560)

 

Profit/(loss) before tax

 

 

931,857

 

(78,186)

 

(260,018)

 

Tax (expense)/credit

4

 

(176,082)

 

31,274

 

(456,423)

 

Profit/(loss) for the period and total comprehensive income

 

 

755,775

 

(46,912)

 

 (716,441)

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

Basic earnings/(loss) per share (p)

5

 

1.34

 

(0.18)

 

(2.45)

 

Diluted earnings/(loss) per share (p)

5

 

1.33

 

(0.18)

 

(2.45)

 

 

 

 

 

 

 

 

 

 

 

 

All activities comprise continuing operations. There are no recognised gains or losses other than those passing through the statement of comprehensive income.

 

The accompanying notes are an integral part of these interim financial statements.

 

Consolidated Statement of Financial Position

As at 1 July 2018

 

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

 

26 weeks ended

 

26 weeks ended

 

53 weeks ended

 

 

 

 

1 July 2018

 

25 June 2017

 

31 December 2017

 

Assets

Notes

 

£

 

£

 

£

 

Non-current

 

 

 

 

 

 

 

Intangible assets

8

 

3,089,681

 

1,489,714

 

2,524,681

 

Property, plant and equipment

7

 

78,589,969

 

52,528,067

 

67,947,419

 

Total non-current assets

 

 

81,679,650

 

54,017,781

 

70,472,100

 

Current

 

 

 

 

 

 

 

 

Inventories

 

 

580,357

 

481,537

 

553,909

 

Trade and other receivables

 

 

1,995,232

 

1,383,769

 

1,652,888

 

Cash and cash equivalents

 

 

2,841,740

 

1,479,497

 

6,414,854

 

Total current assets

 

 

5,417,329

 

3,344,803

 

8,621,651

 

Total assets

 

 

87,096,979

 

57,362,584

 

79,093,751

 

Liabilities

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Trade and other payables

 

 

(7,714,524)

 

(4,669,142)

 

(6,147,068)

 

Borrowings

 

 

 

 

 (315,640)

 

(244,707)

 

Total current liabilities

 

 

(7,714,524)

 

 (4,984,782)

 

 (6,391,775)

 

Non-current

 

 

 

 

 

 

 

 

Borrowings

 

 

 (7,000,000)

 

 (20,919,867)

 

-

 

Other payables

 

 

 (310,000)

 

 (21,272)

 

(310,000)

 

Deferred tax liabilities

 

 

(1,095,948)

 

(518,499)

 

 (1,081,823)

 

Total non-current liabilities

 

 

(8,405,948)

 

 (21,459,638)

 

 (1,391,823)

 

Total liabilities

 

 

(16,120,472)

 

(26,444,420)

 

 (7,783,598)

 

Net assets

 

 

70,976,507

 

30,918,164

 

71,310,153

 

Equity

 

 

 

 

 

 

 

 

Share capital

 

 

29,196,167

 

12,934,904

 

28,233,667

 

Share premium

 

 

33,586,189

 

97,000

 

31,276,189

 

Own shares (JSOP)

 

 

 (3,272,500)

 

-

 

-

 

Convertible preference share (CPS)

 

 

-

 

5,532,076

 

-

 

Other reserve

 

 

92,042

 

90,000

 

 92,042

 

Share-based payment reserve

 

 

507,458

 

942,673

 

326,364

 

Retained earnings

 

 

10,867,151

 

11,321,511

 

11,381,891

 

Total equity

 

 

70,976,507

 

30,918,164

 

71,310,153

 

 

 

 

 

 

 

 

 

 

                             

The accompanying notes are an integral part of these interim financial statements

 

Consolidated Statement of Changes in Equity

For the 26 weeks ended 1 July 2018

 

 

Share capital

 

Share premium

 

Own shares (JSOP)

 

Convertible preference share ("CPS")

 

Other reserve

 

Share-based payment reserve

 

Retained earnings

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 25 December 2016 (Audited)

 

 12,934,904

 

97,000

 

-

 

5,532,076

 

90,000

 

798,079

 

11,756,110

 

31,208,169

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee share-based compensation

 

-

 

-

 

-

 

-

 

-

 

   144,594

 

-

 

144,594

Dividends

 

-

 

 -

 

-

 

-

 

-

 

-

 

  (387,687)

 

  (387,687)

Transactions with owners

 

-

 

-

 

-

 

-

 

-

 

   144,594

 

 (387,687)

 

 (243,093)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

 

-

 

-

 

 -

 

-

 

-

 

-

 

(46,912)

 

 (46,912)

Total comprehensive income for the period

 

-

 

-

 

-

 

-

 

-

 

-

 

 (46,912)

 

 (46,912)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 25 June 2017 (Unaudited)

 

 12,934,904

 

97,000

 

-

 

5,532,076

 

90,000

 

942,673

 

11,321,511

 

30,918,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee share-based compensation

 

-

 

-

 

-

 

  -

 

-

 

113,601

 

-

 

113,601

Issue of new shares prior to exchange for shares in subsidiary

 

69,114

 

-

 

 -

 

-

 

  146,948

 

-

 

-

 

 216,062

Reclassification of CPS debt on conversion of equity

 

-

 

 (144,906)

 

-

 

4,734,378

 

(144,906)

 

-

 

-

 

  4,444,566

Re-designation of CPS into ordinary shares

 

   3,208,268

 

   7,058,186

 

-

 

(10,266,454)

 

              -

 

               -

 

             -

 

            -

Issue of new shares

 

11,455,256

 

 24,904,784

 

-

 

                   -

 

              -

 

                -

 

              -

 

36,360,040

Bonus issue of B Shares

 

     588,000

 

    (588,000)

 

-

 

                   -

 

              -

 

             -

 

               -

 

            -

Purchase of own shares

 

    (21,875)

 

      (50,875)

 

-

 

                 -

 

              -

 

              -

 

                -

 

     (72,750)

Share options exercised

 

              -

 

                  -

 

-

 

                 -

 

              -

 

 (729,910)

 

   729,910

 

               -

Transactions with owners

 

 15,298,763

 

 31,179,189

 

            -

 

  (5,532,076)

 

    2,042

 

 (616,309)

 

   729,910

 

41,061,519

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

 

                -

 

               -

 

            -

 

                -

 

              -

 

            -

 

  (669,530)

 

  (669,530)

Total comprehensive income for the period

 

                 -

 

              -

 

             -

 

                  -

 

              -

 

              -

 

   (669,530)

 

   (669,530)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2017 (Audited)

 

 28,233,667

 

 31,276,189

 

                -

 

                    -

 

   92,042

 

    326,364

 

11,381,891

 

71,310,153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee share-based compensation

 

              -

 

               -

 

               -

 

                   -

 

              -

 

    181,094

 

              -

 

   181,094

Dividends

 

                -

 

               -

 

              -

 

                  -

 

              -

 

              -

 

(1,270,515)

 

(1,270,515)

Purchase of JSOP shares

 

   962,500

 

   2,310,000

 

(3,272,500)

 

             -

 

              -

 

            -

 

            -

 

              -

Transactions with owners

 

     962,500

 

   2,310,000

 

(3,272,500)

 

                  -

 

              -

 

   181,094

 

(1,270,515)

 

(1,089,421)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

             -

 

-

 

             -

 

                   -

 

              -

 

              -

 

   755,775

 

    755,775

Total comprehensive income for the period

 

                -

 

-

 

              -

 

-

 

              -

 

               -

 

   755,775

 

    755,775

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 July 2018 (Unaudited)

 

 29,196,167

 

 33,586,189

 

(3,272,500)

 

-

 

  92,042

 

   507,458

 

10,867,151

 

70,976,507

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these interim financial statements.

 

Consolidated Statement of Cashflows

For the 26 weeks ended 1 July 2018

 

 

Unaudited

 

Unaudited

 

Audited

 

 

26 weeks ended

 

26 weeks ended

 

53 weeks ended

 

 

1 July 2018

 

25 June 2017

 

31 December 2017

 

 

£

 

£

 

£

Cash flows from operating activities

 

 

 

 

 

 

Profit/(loss) for the period

 

             755,775

 

            (46,912)

 

               (716,441)

Taxation

 

             176,082

 

            (31,274)

 

                 456,423

Finance costs

 

             173,725

 

           542,833

 

                 986,560

Operating profit

 

          1,105,582

 

           464,647

 

                 726,542

Adjustments for:

 

 

 

 

 

 

Depreciation

 

          1,207,086

 

           929,467

 

              1,963,891

Share-based payment charge

 

             181,094

 

           144,594

 

                 258,195

Impairment

 

                        -

 

           450,000

 

                 450,000

Change in inventories

 

             (26,448)

 

            (15,218)

 

                 (87,590)

Change in trade and other receivables

 

           (342,344)

 

          (168,380)

 

               (366,233)

Change in trade and other payables

 

             239,091

 

          (641,568)

 

              1,252,254

Cash generated from operations

 

          2,364,061

 

        1,163,542

 

              4,197,059

Tax paid

 

           (104,107)

 

            (24,970)

 

               (150,832)

Net cash from operating activities

 

          2,259,954

 

        1,138,572

 

              4,046,227

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Purchase of property, plant and equipment

 

        (7,082,636)

 

       (2,892,419)

 

            (7,610,731)

Acquisition of new property sites

 

        (5,332,000)

 

          (719,000)

 

          (11,454,000)

Net cash used in investing activities

 

      (12,414,636)

 

       (3,611,419)

 

          (19,064,731)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issue of share capital

 

                        -

 

                       -

 

            34,678,775

Repayment of borrowings

 

                        -

 

                       -

 

          (13,610,040)

Dividends paid

 

                        -

 

                       -

 

               (227,092)

Purchase of own shares

 

                        -

 

                       -

 

                 (72,750)

Proceeds from new borrowings

 

          7,000,000

 

        2,914,950

 

                            -

Interest paid

 

           (418,432)

 

          (227,192)

 

               (600,121)

Net cash from financing activities

 

          6,581,568

 

        2,687,758

 

            20,168,772

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

        (3,573,114)

 

           214,911

 

              5,150,268

Cash and cash equivalents at the start of the period

 

          6,414,854

 

        1,264,586

 

              1,264,586

Cash and cash equivalents at the end of the period

 

          2,841,740

 

        1,479,497

 

              6,414,854

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these interim financial statements.

 

Notes to the Financial Statements

For the 26 weeks ended 1 July 2018

 

1          Basis of preparation

This interim report was approved by the board on 19 September 2018. The interim financial statements are unaudited and are not the Group's statutory accounts as defined in section 434 of the Companies Act 2006.

 

The consolidated interim financial statements have been prepared under IFRS as adopted by the European Union and on the basis of the accounting policies set out in the statutory accounts of The City Pub Group plc, for the period ended 31 December 2017, with the exception of the changes outlined in note 2. The financial statements have not been prepared (and are not required to be prepared) in accordance with IAS 34: 'Interim Financial Reporting'. They do not include any of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the period ended 31 December 2017.

 

Statutory accounts for the period ended 31 December 2017 have been delivered to the Registrar of Companies. These accounts contain an unqualified audit report under Section 495 of the Companies Act 2006, which did not make any statements under Section 498 of the Companies Act 2006.

 

The interim report is presented in Great British Pounds and all values are rounded to the nearest pound, except where otherwise indicated.

 

This interim report has been prepared in accordance with the AIM Rules issued by the London Stock Exchange.

 

2          Changes in accounting policies

This note explains the impact of the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts With Customers on the Group's financial statements and also discloses the new accounting policies that have been applied from 1 January 2018.

 

IFRS 9: Financial instruments was effective for periods commencing on or after 1 January 2018. The new standard impacts classification, measurement and disclosure of financial assets and financial liabilities. On adoption there were no material impacts on the Group's financial performance or financial position. No prior year balances required re-statement, as there were no changes to classification or measurement.

 

IFRS 15: Revenue from Contracts with Customers became effective for periods commencing on or after 1 January 2018. The core principle is that an entity will recognise revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or service to a customer. The Group's revenue streams are not based on a number of performance obligations within a contract, but at a point of sale and therefore there are no material changes to the Group's financial performance or financial position on adoption of this Standard.

 

Investment in own shares (JSOP): The Group announced the establishment of Joint Share Ownership Plan ("JSOP") in January 2018. This resulted in the purchase of the Group's own shares and the creation of an Employee Benefit Trust. The Group's policy in respect of the investment in own shares are to account for the purchase at cost and as a deduction from reserves.

 

3        Exceptional items

 

 

Unaudited

 

Unaudited

 

Audited

 

 

26 weeks ended

 

26 weeks ended

 

53 weeks ended

 

 

1 July 2018

 

25 June 2017

 

31 December 2017

 

 

£

 

£

 

£

Pre opening costs

 

               449,747

 

              379,832

 

                852,718

Impairment of a pub site (note 7)

 

                           -

 

              450,000

 

               450,000

Other non recurring items

 

                 64,696

 

                 42,177

 

             1,897,925

 

 

               514,443

 

               872,009

 

           3,200,643

Other non-recurring items include IPO costs expensed totalling £1,841,190 for the period ended 31 December 2017.

 

4          Tax charge on profit / (loss) on ordinary activities

 

The taxation charge is calculated by applying the Directors' best estimate of the annual effective tax rate to the profit for the period. All items of taxation are reflected through the Statement of Comprehensive Income.

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

 

26 weeks ended

 

26 weeks ended

 

53 weeks ended

 

 

 

 

1 July 2018

25 June 2017

 

31 December 2017

 

 

 

 

£

 

£

 

£

 

 

Current income tax:

 

 

 

 

 

 

 

 

Current income tax charge

 

             161,957

 

            (15,676)

 

                335,014

 

 

Adjustments in respect of previous period

 

                        -

 

                       -

 

                  44,114

 

 

Total current income tax

 

             161,957

 

            (15,676)

 

                379,128

 

 

Deferred tax:

 

 

 

 

 

 

 

Origination and reversal of temporary differences

 

               14,125

 

            (15,598)

 

                  85,229

 

 

Adjustments in respect of previous period

 

                        -

 

                       -

 

                   (7,934)

 

 

Total deferred tax

 

               14,125

 

            (15,598)

 

                  77,295

 

 

Total tax

 

             176,082

 

            (31,274)

 

                456,423

 

 

 

 

 

 

 

 

                             

 

5      Earnings per share

 

 

 

 

Unaudited

 

Unaudited

 

Audited

 

 

 

26 weeks ended

 

26 weeks ended

 

53 weeks ended

 

 

 

1 July 2018

 

25 June 2017

 

31 December 2017

 

 

 

£

 

£

 

£

 

Earnings/(loss) for the period attributable to Shareholders

 

 

 

 

 

 

 

 

                   755,775

 

                    (46,912)

 

                  (716,441)

 

 

 

 

 

 

 

 

 

Earnings/(loss) per share:

 

 

 

 

 

 

 

Basic earnings/(loss) per share (p)

 

                         1.34

 

                         (0.18)

 

                         (2.45)

 

Diluted earnings/(loss) per share (p)

 

                         1.33

 

                         (0.18)

 

                         (2.45)

 

 

 

 

 

 

 

 

 

Weighted average number of shares:

 

Number of shares

 

Number of shares

 

Number of shares

 

 

 

 

 

 

Weighted average shares for basic EPS

 

              56,467,333

 

               25,845,809

 

               29,189,803

 

Effect of share options in issue

 

                   374,862

 

 n/a

 

 n/a

 

Weighted average shares for diluted earnings per share

 

              56,842,195

 

 n/a

 

 n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

               

6          Dividends

 

The Company declared a dividend of 2.25p per ordinary share during the year ended 31 December 2017, which was approved at the Annual General Meeting on 14th May 2018. The dividend payable of £1,270,515 has been accrued as at 1 July 2018 and deducted from retained earnings.

 

After the period end £1,087,465 of the dividend was paid in cash and £183,050 was distributed as a scrip dividend.

 

7          Property, plant and equipment

 

 

 

Freehold & leasehold property

 

Fixtures, fittings and computers

 

 

Group

 

 

 

 

 

 

 

 

Total

Cost

 

£

 

£

 

£

At 25 December 2016 (Audited)

 

   43,624,547

 

   11,867,609

 

   55,492,156

Additions

 

     1,696,589

 

     1,195,830

 

     2,892,419

Acquisitions

 

       387,149

 

       201,850

 

       588,999

At 25 June 2017 (Unaudited)

 

  45,708,285

 

  13,265,289

 

  58,973,574

Additions

 

     2,957,497

 

     1,760,815

 

     4,718,312

Acquisitions

 

   10,922,316

 

       813,148

 

   11,735,464

At 31 December 2017 (Audited)

 

  59,588,098

 

  15,839,252

 

  75,427,350

Additions

 

     5,793,285

 

     1,289,351

 

     2,962,636

Acquisitions (Note 8)

 

     4,473,252

 

        293,748

 

     8,887,000

At 1 July 2018 (Unaudited)

 

  69,854,635

 

  17,422,351

 

  87,276,986

 

 

 

 

 

 

 

Depreciation

 

 

 

 

 

 

At 25 December 2016 (Audited)

 

       918,785

 

     4,147,255

 

     5,066,040

Provided during the period

 

       130,041

 

       799,426

 

       929,467

Impairment

 

       237,000

 

       213,000

 

       450,000

At 25 June 2017 (Unaudited)

 

    1,285,826

 

    5,159,681

 

    6,445,507

Provided during the period

 

       146,255

 

       888,169

 

     1,034,424

At 31 December 2017 (Audited)

 

    1,432,081

 

    6,047,850

 

    7,479,931

Provided during the period

 

       148,808

 

     1,058,278

 

     1,207,086

At 1 July 2018 (Unaudited)

 

    1,580,889

 

    7,106,128

 

    8,687,017

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

At 1 July 2018 (Unaudited)

 

  68,273,746

 

  10,316,223

 

  78,589,969

At 31 December 2017 (Audited)

 

   58,156,017

 

     9,791,402

 

   67,947,419

At 25 June 2017 (Unaudited)

 

   44,422,459

 

     8,105,608

 

   52,528,067

At 25 December 2016 (Audited)

 

   42,705,762

 

     7,720,354

 

   50,426,116

 

 

 

 

 

 

 

 

During the period ended 25 June 2017 the group has made a provision for impairment against a site in Bristol, due to poor performance and it has been reduced to its fair value less costs to sell.

 

8             Business combinations

 

During the period ended 1 July 2018 the Group has acquired four new sites for a combined consideration of £5,332,000, which was all satisfied in cash.

 

In January 2018 the Group acquired the Belle Vue, a freehold pub in Clapham for the consideration of £2,875,000. Following a minor refurbishment, the site opened for trading towards the end of February 2018.

 

In March 2018 the Group completed on a freehold site in Cardiff for the consideration of £1,075,000, the Pontcanna Inn, which opened in June 2018 after a major refurbishment.

 

The Group completed on the leasehold of The Covent Garden Pub in London in April 2018 for the consideration of £1,215,000, which opened in April 2018. The site will close for a refurbishment in the second half of the year.

 

The Group completed on the leasehold of The Summertown site in Oxford for the consideration of £167,000 in May 2018, which is expected to open in Q4 2018.

 

All of the above acquisitions were part of the Group's continuing strategy to expand its pub portfolio via selective quality acquisitions.

 

 

 

Unaudited

 

 

26 weeks ended

 

 

1 July 2018

Fair value:

 

£

Property, plant and equipment acquired

 

       4,767,000

Goodwill

 

          565,000

Total

 

       5,332,000

 

 

 

Satisfied by:

 

 

Cash

 

       5,332,000

Total

 

      5,332,000

 

 

 

 

 

9             Events after the reporting period

 

The Group settled the final dividend, which was approved at the AGM in May 2018, on 2nd July 2018.

 

On the 9th of July 2018 the Company completed on the Traveller's Friend in Woodford Green, a freehold site which started trading on completion.

 

On the 24th of July 2018 the Company also completed on two Jam Trees sites which are both leasehold, located in Chelsea and Clapham Junction. Both sites started trading on completion.

 

In August the Company completed on a leasehold site in Brighton, named Alfresco which also started trading on completion. The site will close for refurbishment in the second half of the year.

 


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