City Pub Company has reported a 36% increase in sales for the first six months of its financial year, with chairman Clive Watson telling MCA that Brexit has not derailed the company’s IPO plans.
The group saw sales rise to £12.1m for the half-year to end of June up from £8.9m in the same period last year, while company EBITDA for the period was up 30% year-on-year to £1.6m.
The group revealed it has secured a fifth site in Cambridge and Watson said the group would like similar coverage in other key areas such as Brighton and Bristol.
He said the group is on track to grow to 35 sites by June next year and reiterated his ultimate goal of building an estate of over 50 sites.
It remains the intention for City Pub Company to list on AIM (with City Pub Company East & West combined) once the EIS qualifying period ends in October 2017 – with the goal of raising £10m to £15m from new and existing shareholders.
Watson, a vocal opponent to the UK leaving the EU, told MCA Brexit had not impacted on the group’s plans.
He said: “There are a lot of questions that remain to be answered but just like with the credit crunch, the only response is to get on it with it and fight your corner.
“Next October seems like the natural time to list. It gives us our existing shareholders a market for their shares, although I feel a lot will hang in for the ride. It also gives us an opportunity to raise more money, which will transform the balance sheet once again and give us the firepower to go above 50.”
In a letter to shareholders, the group updated on its pipeline of recent acquisitions and openings:
Cat and Mutton, London E8 - opened May 2016
George Street Social, Oxford - opened March 2016
Old Bicycle Shop, Cambridge - opened June 2016
Punt Yard, Cambridge - opening November 2016
Back Street Bistro, Cambridge - opening early 2017
Another site (exchanged) - opening May 2017
Althorp, London SW17 - opened February 2016
Prince Street Social, Bristol - opened March 2016
King Street Brew House, Bristol - opened March 2016
Inn on the Beach, Hayling Island - opened March 2016
Westgate, Winchester - opened May 2016
Smugglers, Brighton - opening early 2017
Varsity, Southampton - opening early 2017
The riverside Punt Yard site in Cambridge is the most recent acquisition – expected to complete today and Watson said it perfectly illustrated the group’s desire to build its estate around key hubs.
He said: “Rupert (Clark, City Pub Co East CEO) lives very close to Cambridge and has a lot of contacts there so it’s been an obvious focus. As we grow then further opportunities present themselves.
“Hubs help in so many ways – management, promotion of staff, local economy. As long as you open in genuinely independent ways, it gives assurance to the local community. It means customers can see genuine common values and it’s something we are looking at in our key areas.”
Watson said he was not concerned by the increasing appetite among larger companies such as Greene King and Thwaites to open brewpub concepts.
He said: “The larger companies will always try to copy what has been successful for the smaller operators but what they can never replicate is the culture and that is the key to it. That is why genuine independence will always steal a march on the larger corporates but customers will only be fooled for so long.”
As part of the preparation for the float, the current directors’ bonus scheme will be revised. The original scheme was implemented at the launch of the EIS scheme (15% of the Company EBITDA) but Watson said it would now be revised to be more appropriate for a larger company.
The group said it also intends to commence a progressive dividend policy for Ordinary Shareholders with the amount payable declared in April 2017 following the announcement of the 2016 year end results.