City Pub Group will continue to look for predominantly wet-led, freehold pubs as part of its ongoing acquisition strategy, in locations the business is already represented in, CEO Clive Watson tells MCA.
The operator reported positive trading momentum in an update for the 26 weeks to 25 June 2023, with revenues up 21% to £31.7m and like-for-like sales up 14%.
“We’ve got areas we’re very happy to trade in,” Watson says. “We’re looking for one or two sites or good clusters.”
The group acquired a majority stake in Mosaic Pub Company earlier this year, which takes its estate up to Birmingham.
It is unlikely to go further North, with the focus on building its presence in the South at the moment.
Above all, the goal is to acquire pubs that promise a quality experience, according to Watson.
“We focused a lot on organic growth in 2023,” he adds. “Now we’re in all the cities we want to be and we have a strong presence in all of them.
“Our lfls are a testament to the way the business has been reshaped.”
“Much of the focus” is now on prebooked sales, with Christmas bookings at over 30% as opposed to 22% at this time last year.
All geographies within the estate are holding up well, particularly due to the return of tourists and students.
“London has been very strong while East Anglia has taken longer to recover…that’s partly because of the weather.
“But all areas are in growth and London’s leading the charge.”
The group has upped prices by 3-4% this year as it looks to maintain a value for money proposition.
“We have a good quality offer at a good affordable price,” Watson continues. “We want to offer value for money but in a premium environment.
“We’re not the cheapest pub on the high street, but we offer a good proposition for students, with sport, music, and a range of drinks.”
The recently launched range of premium cocktails has performed well, while the rationalisation of the food menu has helped mitigate costs.
“Energy prices have come down significantly. Next year we expect to see a continued softening in the market.
“We’re fortunate enough to be mainly wet-led, with additional revenue from karaoke, shuffleboard, our rooms etc.
Overall, the group is in a strong position as it looks to grow by five sites a year.
“We’ve reshaped our balance sheet over the past three years…we’ve been through tough times but this is the lowest ever debt we’ve had.
“We’re absolutely in the strongest position to take advantage of acquisitions going forward.”
