Capital Pub Company, the London-based pub operator, has moved a step closer towards its aim of operating a 50-strong estate, after agreeing to acquire the Rye in Peckham for £1.37m.
Capital has exchanged contracts to acquire the Rye, which will become its 34th pub, with the deal anticipated to complete towards the end of April.
The company, which is led by chief executive Clive Watson, also confirmed it was in advanced negotiations on a further pub and is pursuing a number of additional sites.
In a statement Capital said that its acquisition pipeline “continues to be strong with plenty of opportunity to continue to grow the company’s portfolio to 45-50 pubs over the next two to three years”.
Earlier this month, the company paid £1.55m to acquire the 3,000sq ft Mansion pub on Gypsy Hill from south London operator Late Night Leisure.
The Mansion, which has planning permission for five flats, will be closed immediately for a complete refurbishment and re-open towards the end of the summer.
Clive Watson, Chief Executive, said: “Both these properties perfectly fit the location and quality criteria that we require when adding pubs to our estate. We continue to make significant progress in building our estate towards our stated goal.”
Last month, Capital announced a restructuring of its management team and an internal corporate reorganisation as it geared itself up for further expansion.
The group said that to facilitate this growth it was adopting a number of measures to further strengthen its management structure, which included the appointment of Alex Derrick as its new operations director with immediate effect.
In response to this morning’s announcement, Simon French, analyst at Panmure Gordon, reiterated his Buy recommendation for the group and said that the purchase prices for the two latest acquisitions “represented good value”.
He said: “The group is making good progress towards its goal of 45-50 pubs over the next two to three years. On our existing forecasts the stock trades on a CY 2011E P/E of 12.9x and an EV/EBITDA of 7.5x. This is inexpensive in our view and we reiterate our Buy recommendation and 157p price target implying c16% upside potential.”
