Capital Pub Company, the London-based managed house chain, has this morning unveiled a 21% increase in adjusted ebitda to £3m and said it believed the market for freehold pubs had bottomed out.
The company, which is led by chief executive Clive Watson, is currently in the closing stages of purchasing two more sites – acquisitions that would take its estate to 29 pubs.
Watson told M&C Report that the company was adopting a cautious approach to expansion and added: “For good managed pubs in London I think the market has bottomed out and I think it has started to improve again. That’s not to say we’re going to see a huge increase.”
Unveiling its interim results for 26 weeks to 26 September, Capital said it had seen a 9% increase in revenue, up from £10.1m to £11.1m. Cash generated from operating activities surged 36% to £1.9m, up from £1.14m for the same period last year.
Watson said the reason for the growth was twofold: the company’s concentration on London and the autonomy given to managers.
“This gives us the cutting edge against larger managed house operators,” added Watson.
The company has a clutch of pubs participating in “Movember” – a charity event where male member of staff are sponsored to grow a moustache and has also organised a successful music festival.
Watson said that trade had also benefited from a small capital expenditure to improve ancillary areas – which had led to an increase in organised parties. He also said he believed pubs in London would benefit from companies deciding to downsize corporate Christmas parties.
Capital Pub Company has a debt of £28m, which represents a gearing of 83%. It has unutilised facilities of £3.5m – part of which will be used to fund its two current acquisitions.
Earnings per share were up by 23% at 5.15p and it awarded no dividend
