This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.
The City Pub Group plc
("The City Pub Group", the "Company" or the "Group")
Year end trading update
Recent acquisition activity
The City Pub Group, the owner and operator of 44 premium pubs across Southern England and Wales, is pleased to announce its year end update for the 52 week period to 30 December 2018.
Total turnover for the year was £45.6m, an increase of approximately 22% on the prior year, which was a 53 week trading period. Like for like sales were up by 1.6%. The majority of the like for like growth in 2018 was volume driven as price increases were only implemented at the end of 2018. The Group will receive the benefit of these price increases during the course of 2019.
Trading over the festive period was strong and benefitted from good organisation of promotions and efficient group bookings. Like for like sales over the six week period ending 6 January 2019 were up 7.0%.
The Group confirms that it has traded in line with market expectations for 2018 and remains optimistic about its prospects for 2019.
The Group is pleased to announce that in December 2018 it completed the acquisition of Chapel 1877, a freehold site in the centre Cardiff and one of the city's best known venues, for a cash consideration of £2.2 million.
The Group is also pleased to announce that it has exchanged on two freehold sites since year end, one in Norwich and one in Exeter, for a total cash consideration of approximately £3 million. The total refurbishment costs for these 2 sites are expected to be approximately £1.1 million.
The site in Norwich is an extension to the Company's existing operation, The Georgian Townhouse, and will enable an increase in the number of letting rooms from 22 to 32. The site in the centre of Exeter will give the Group extended presence in that city.
The Group's net debt at year end was approximately £10.5 million. The Group has total borrowing facilities of £30 million which it intends to renegotiate during the current year to provide further headroom to fund its acquisition programme and take advantage of opportunities in a much less competitive marketplace, whilst maintaining a conservative approach to gearing.
The Group is currently refurbishing 3 large sites and anticipates these opening as follows:
Aragon House, Parsons Green Q2 2019
Reading freehold site in Market Place Q2/Q3 2019
Cambridge former Tivoli site Q3/Q4 2019
Once these three sites are open and the exchanged sites are completed, the Group will have 48 trading pubs and approximately 100 letting rooms.
Further sites are in legals and we continue to appraise multiple opportunities.
Clive Watson, Executive Chairman of The City Pub Group, said:
"Trading was very encouraging over the festive period and throughout 2018, particularly post-Easter. We have grown very rapidly over the last 2 years, performed well and our new sites are showing their potential.
Our low gearing puts us in an enviable position to take advantage of attractive acquisition opportunities that present themselves. If we enter a period of uncertainty caused by Brexit, there is much we can continue to achieve organically.
Our estate is in great shape; well invested and trading well with considerable upside potential, including the additional benefit of the quality of our earnings increasing as we invest and grow our accommodation business which delivers an incremental income stream.
16 January 2019
The City Pub Group
Clive Watson, Executive Chairman
Tarquin Williams, CFO
Tel: +44 20 7559 5106
Liberum (Nomad & Joint Broker)
Chris Clarke / Trystan Cullen / Clayton Bush
Tel: +44 20 3100 2222
Berenberg (Joint Broker)
Chris Bowman / Toby Flaux / Marie Stolberg
Tel: +44 20 3207 7800
Matthew Smallwood / Andy Low
Tel: +44 20 7457 2020