City Pub Group preps ‘reset, streamlined’ business

City Pub Group will reopen with a “reset, more efficient, streamlined business”, executive chairman Clive Watson has told the markets.

In a financial update, the group reports coronavirus has given the board time to evaluate how the company can run its operations more effectively.

While traditionally the group has run its pubs as independent units with local decision making, changes in technology particularly in digital marketing and online bookings is ushering in a step change in how the group manages its day-to-day retail operations.

The board is in the process of introducing a central sales and marketing function. Online sales and telephone sales will now be run centrally at head office and marketing of key events will be done centrally. Pubs will still be able to market local events themselves to maintain individuality and focus.

By adopting a central sales and marketing approach, the Group will be able to use its database more effectively over the next three months, and will also improve the functionality of its City Club app. The Group will work closely with key brands, existing and new, to continue its premium offering.

There will be little additional cost, as much of this functionality sales and marketing has previously been done regionally.

This will free up time for the retail operations, enabling them to focus more on execution of the offer with a more streamlined, but premiumised, offer. The Group also expects to see savings elsewhere in systems, finance, unit employee costs and other regional costs.

The group said there was an “unutilised capacity” within its current estate which can be utilised more effectively when we return to normal trading conditions.

Other measures being implemented include zero-budget policies, streamlining the company’s supply chain, and renegotiating construction costs, particularly on the equipment side.

The group reports: “Covid-19 has given the group a one-off opportunity to re-set the way the business is run. Pubs will continue to be operated on an individual basis but with the support of a more robust central system. This will enable the group to raise the bar for its retailing standards across the estate.”

Clive Watson, executive chairman of The City Pub Group, said: “We are excited about the prospect of reopening, not least because we have an excellent team who are keen to get back to work and keen to show hospitality to customers again. However, we will do it cautiously and above all safely.

“We will reopen with a reset, more efficient, streamlined business, reduced capital expenditure and our focus on the existing estate. We have a strong balance sheet not only to endure and prosper again, but also to take advantage of opportunities that arise.”

The report revealed financial results for 2019, with revenue up 31% to £60.0 million. Like for like sales increased by 1.7% year on year, against a tough comparable World Cup and long, hot summer in 2018. Adjusted profit before tax was up 4% to £5.3 million.