City Pub Group is in talks over new debt facilities of up to £40m as it seeks further growth amid booming drinks sales.

Chairman Clive Watson and chief financial officer, Tarquin Williams, told MCA that banks were keen to lend to the listed group as it eyes growth to 65 sites by 2020. They expect to secure the new credit before the end of the year, having paid down the bulk of the previous facility after floating. The funding is likely to be in the form of a £30m facility and a £10m accordian feature.

Yesterday the group announced its results for the 26 weeks to 1 July, in which sales grew 24% to £20m, with adjusted EBITDA rising 25% to £3m.

Watson said the group was seeking to shift its sales mix further towards drinks, both because of market trends and the difficulty in recruiting kitchen staff. He said that while food would remain an important part of the mix, it had fallen as a percentage of sales from 30% to 28% over the past year and is expected to eventually fall below 25%.

He said the exception to strong drinks sales across the group was its ‘vegan pub’ concept Tell Your Friends, where customers have shown little interest in beverages other than tap water.

Accommodation will continue to be a key focus, with planning permission secured for 15 rooms at Aragon House in Parsons Green and 24 at the upcoming site in the Market Place in Reading.

Watson also said that the decision to move its profit share programme for employees to bi-annual payments had come directly from employee representation on the board.

Watson told MCA that the acceleration in reaching its target of 65-70 pubs had come because of waning competition for sites but said the group remained selective.

On the shift towards wet-led, he said: “There isn’t a pubco in the land that is finding recruitment in the kitchen easy. Not just because of that, but it has certainly helped to crystalise our thinking, we are looking to move the bias of our sales mix further towards liquor. That’s not to say freshly cooked food won’t be an important part of the offer but our key selling points are more likely to be local beers and gin and so on. It’s a mix we’re very comfortable with - at Capital we were 82% wet-led.”

On Tell Your Friends, he said: “It has been very well received although we probably opened a little too restaurant-y and should have gone a bit more casual – down the deli line. We are developing our grab and go offer at the moment. Liquor sales have been a bit disappointing because apart from tap water they don’t seem to drink much. We’re going to do more food pairing to try to drive those sales.”