The City Pub Group has reported positive trading momentum, with revenues up 21% to £31.7m (H1 2022: £26.1m) and LFL sales up 14%.
In an update for the 26 weeks to 25 June 2023, adjusted EBITDA was £3.3m (H1 2022: £3.4 million), despite inflationary pressures.
The comparatives benefited from c.£800k of state aid principally relating to lower VAT rates and business rates.
Adjusted profit before tax was £0.8 million (H1 2022: £1.3m). Reported loss was £0.8 million (H1 2022: profit £0.1 million)
The group operates a mostly freehold estate of 42 trading pubs, and in addition recently acquired a majority shareholding in Mosaic Pubs, which has nine pubs located in London and Birmingham.
The pub company said it has one of the lowest levels of gearing in the hospitality sector with net debt of only c.£8m, putting it in a very strong position to take advantage of appropriately priced opportunities in the market.
City Pub Group said it was “currently engaged in negotiations on a number of acquisitions”, with plans to open five sites a year.
Trading since the half year end has remained positive and in line with full year expectations, with continued momentum anticipated in H2 FY23, which benefits from an active sporting calendar.
Since its last statement in June, the group has continued to premiumise and enhance its existing estate, with pub upgrades worth £2m.
These include investments in Cliftonville in Cromer, Georgian Townhouse in Norwich, Bow St Tavern, Market House in Reading, Three Crowns in Shoreditch, and The Cork in Bath.
The company acquired a new pub, The Bridge in Barnes for £0.5m; and disposed of The Yard surrendering the lease with the sale completing on 24 March 2023.
Chairman Clive Watson said with the economy still struggling, the group would take a measured, organic approach to growth.
He added: “The company is in a strong position with very low net debt and what we believe is amongst the lowest gearing in the sector. We look forward to a strong second half - Christmas bookings are significantly up and the company is well placed to take advantage of new acquisition opportunities. The Mosaic estate has been integrated and is showing significant increases in LFL sales. The economy remains challenging but we are well placed to take advantage of any future upturn.”
