City Pub Group, has acquired three new pubs, as well as exchanging on a fourth, with the expectation that it will have a c50-strong portfolio by the end of the year.
The group has acquired the leaseholds of the two Jam Trees sites Clapham’s Old Town and King’s Road in Chelsea, as well as freehold pub Travellers Friend in Woodford Green, Essex. The AIM-listed operator has also exchanged on a seafront café-bar in Brighton. The total consideration for the sites is £8.1m, payable in cash from the company’s existing resources.
The acquisitions take the group to 46 sites (41 currently trading). Chairman Clive Watson told MCA that he hoped to be able to complete further single-site acquisitions before the end of the year but also said that with uncertainty over Brexit and over-supply in the sector, City Pub Group was likely to pause its pace of acceleration next year.
The Jam Trees sites were acquired from entrepreneur Ashley Letchford – who also operates Fu Manchu in Clapham - in a deal believed to be worrth c£2.4m. Watson said the group would retain their branding and that he would consider rolling the format out if the right sites became available.
On the Travellers Friend, which was acquired from private owners in an off-market transaction and marks the group’s first foray into the Essex suburbs, Watson said: “We were approached to see if we were interested, which is happening more and more. What we’re seeing is the expectations of vendors changing and a lack of competition across the board. People know that we’re actively looking to grow and that we’re well-resourced so we are getting plenty of approaches.”
However, he added: “Even with the strong position we are in, as we approach next Easter, we’re likely to start applying the brake on expansion because, as it stands, we simply have no idea what to expect. Our intention certainly remains to grow the estate but caution is probably the word in the short-term.”
In the statement announcing the deals this morning, Watson said: “The purchase of these pubs demonstrates CPG’s broad acquisition network. All fit our criteria and will sit well alongside our existing sites. The Travellers Friend, the two Jam Tree sites along with the new Brighton seafront venue will help position the business for future growth and expansion in 2019. The existing trading estate further underpins our expectations for 2018.
“Our pipeline remains strong with further deals currently being appraised. Our strong balance sheet will enable us to capitalise on these. We are now being offered pubs from many sources and we are able to transact at attractive prices in a buyer’s market.
“We are confident that we will own c.50 pubs by the end of this year, ahead of the plan set at IPO and have the potential to continue to grow the estate faster than planned.”
Paul Tallentyre at DCL acted on the Jam Trees deal.
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