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City Pub Group reins in expansion programme over Brexit fears

The City Pub Group

The City Pub Group said this morning that its targeted expansion of high-quality larger pubs with letting rooms has delivered strong progress for the group in the first half of the year – but warned that it would rein in its expansion programme until the Brexit picture is clearer.

The group, which operates almost 50 pubs, reported a 36% increase in revenue to £27.1m for the six months to 30 June, with pre-tax profits up 19% to £1.9m.

Progress has continued into the second half with sales up by 35% over the last eleven weeks.

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The City Pub Group currently has a further four projects in the pipeline having already opened four new outlets this year.

However, it said it will take a “much more prudent and even more selective approach to acquisitions” and focus instead on completing the development sites for trading due to political and economic uncertainty.

Clive Watson, executive chairman of The City Pub Group, said: “Our targeted expansion of high-quality larger pubs with letting rooms has delivered strong progress for the group in the first half. In the face of robust comparatives, we have delivered good like-for-like growth too. As our development sites begin trading during 2020, they will drive our performance onward. Our momentum has continued into the second half with strong sales growth.”

The group said it is beginning to see the benefits of a new regional management structure and Weekly Employee Bonus Scheme, both of which it expects to drive growth and further incentivise staff.

But Mr Watson cautioned on the effect that Brexit could have on the business.

“We cannot ignore the uncertainty in the market due primarily to Brexit and the potential impact of a No Deal. We are a management team that is focused on the long term and as such we believe it is prudent for us to rein in our expansion programme until there is more certainty.

“Instead we will focus on getting our development sites trading, developing our existing estate, reducing our debt and improving our dividends for shareholders. This will further strengthen our position and minimise the impact of any headwinds whilst continuing to deliver significant growth into the future.”

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Tags : BrexitfinancialsPubsThe City Pub Group
Andrew Seymour

The author Andrew Seymour

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