City Pub Group chairman Clive Watson describes the group’s estate of predominately freehold high-quality managed pubs is “virtually unique in the pub sector”.

Writing in his chairman’s statement, he said on a normalised trading basis, the valuation of the portfolio is approximately £150m.

During the pandemic, a significant refurbishment was undertaken at The Hoste Burnham Market (£300k) as well as work at Inn on the Beach (Hayling Island), Brighton Beach Club and Georgian Townhouse (Norwich).

Across the estate, more than 600 outside covers have been added to take advantage the forecast trend of increased domestic holidays. The group also benefits from 191 bedrooms.

Development work will begin on the Turks Head in Exeter imminently, with a view to opening the site in early Autumn.

Works on the Tivoli in Cambridge, The Nest in Bath and new hotel/restaurant/pub in Mumbles, Swansea, will start during the summer.

The group has identified four leases it intends to hand back or dispose of, while ancillary areas in certain pubs will continue to be sold for alternative use such as residential accommodation.

In December 2020, the Group disposed of some cottages near to The Hoste in Burnham Market, for proceeds of £820k.

Included in the results is an impairment charge of £933k for some of the group’s leasehold properties.

However, the group says most values are recorded at historic cost, and in many cases the current pub market value significantly exceeds this.

In March 2021, the group agreed a £5m, three-year, CLBILS loan, in addition to its existing £35m revolving credit facility (RCF) with Barclays, of which £25m is currently drawn.

Barclays have agreed to waive the RCF’s existing financial covenants through to June 2022.

The group £15m of unutilised facilities as a result of the equity fundraising in March 2020, which is “sufficient liquidity not only to ride out the COVID-19 storm but also to begin to explore selective acquisitions”.

Meanwhile, the group said it had made retail and operational improvements by streamlining its supply chain to improve operating margins, and reducing complexity of menus resulting in lower labour costs in the kitchen.

Key central contracts have been renegotiated, reducing variable costs across the pub estate and at head office; marketing and bookings have been centralised; and head office and regional posts have been made redundant to speed up decision-making and reduce costs.

These changes have helped to “significantly reduce our cost base” and lessened complexity, so the group can return to being a “dynamic, entrepreneurial, operation-focused business”.