The City Pub Group has revealed it is ahead of its initial plans to double the number of pubs it operates by 2021.
The publicly-listed outfit expects to have 50 sites in place by mid-2019, which puts it in a strong position to achieve the 65-70 sites it is targeting within the next three years.
Four sites are currently in development and will add to the 42 that it already operates. Management at the firm said the expansion will be assisted by softening conditions in the acquisitions market and limited competition for sites.
In the three months to July 1, sales at the chain grew by 24% as its sports-oriented venues benefitted from the World Cup and the glorious summer weather attracted drinkers.
Clive Watson, executive chairman of The City Pub Group, said the nine new sites it has brought on stream over the course of 2018 have contributed to the increase in sales and group EBITDA that it reported during the first half of the year. Sales for the first six months of the year reached £20m, while EBITDA rose 25% to £3m. Overall net profit hit £760,000, up from a loss of £50,000 last year.
“We are confident of meeting market expectations for 2018 and believe we have the right team and strategy to continue making progress,” said Mr Watson.
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 and their offer is targeted specifically to their local market place.
The Group has a strong balance sheet and low gearing with current borrowings of only £14m, which roughly equates to the value of our freehold backed sites that are currently closed and being developed.
Net debt to EBITDA is around two times and this is anticipated to reduce significantly once the 4 development sites are open and trading. The group has in place a £30m revolving credit facility expiring in July 2021.