Watson: ‘We want to join up the dots’

City Pub Group is to more than double the size of its bedroom estate, from 44 to 100, as it looks to take advantage of the boom in accommodation sales.

The group, which yesterday (12 April) published its results for the 53 weeks to 31 December 2017, achieved like-for-like sales growth of 3.8% last year, which it said had been driven by good growth in drink and accommodation.

“Accommodation is a good add on for us,” executive chairman, Clive Watson, told MCA. “When we were at EIS company, you are not really allowed to have much revenue in hotel rooms, but now we are a quoted company, room sales are something that we are going to focus on.

“At the moment we have 44 bedrooms, and this time next year we should 100,” he said.

Watson said the increase in accommodation would predominately be achieved through the acquisition of new sites, with at least four of five rooms per unit to make it work, with “the odd bedroom added on” to existing sites that already have accommodation.

“We are looking to put in some bedrooms at Aragon House, in Parson’s Green, and we have a site in Reading where we are looking to add bedrooms, while The Red Lion in Cambridge, already has four rooms and we are looking to add a couple on there as well,” explained Watson.

In terms of its pipeline of openings for 2018, City Pub Group is due to complete on two freehold sites – in Cambridge and Oxford – later this month, taking its total estate to 41 pubs, said Watson.

Earlier this month the group exchanged on a site in Cambridge, for a consideration of £1,400,000, as well as a site in Summertown, north Oxford, as it looks to double its estate to around 65 pubs by mid-2021.

Watson said the Cambridge site required significant investment, and was therefore likely to open in Q1 of 2019, while the group is hoping to open the Oxford site in September/October 2018.

The group recently acquired its first site in Wales, in Cardiff – an area he sees opportunities for further growth. “Reading is also an area we’d like to open more pubs in,” added Watson.

“We don’t want to spread ourselves logistically, but build up a local hub or cluster of pubs. Any city or big commercial centre that we are going for has got to be able to have at least three or four pubs for us to acquire,” he said. “We want to join up the dots, but we don’t want to be stretched.”

He said the individual nature of its pubs allowed it to have pubs trading within 100 yards of each.

Since the year end, the Group has completed on five other pubs sites: The Belle Vue in Clapham, a freehold asset, which opened at the end of February; an all-vegan pub (leasehold), Tell Your Friends, in Parsons Green in London, which will open in April 2018; The Old Ticket Office (leasehold) in Cambridge; former Marston’s pub, Cayo Arms (freehold) in Cardiff; and the former Lloyds bank in Market Place, Reading (freehold).

“What is exiting about our pipeline is all of them, with the exception of Belle Vue, are effectively brownfield sites, so we can reposition them to today’s market, which I think is very important,” said Watson.

And while he said he is not a fan of the word ‘roll-out’, if the Group’s vegan concept works in Parson’s Green, “then definitely the aim is to probably have, in very select areas, five or six of these, probably in cities we are already in”, adding that the Group has earmarked Cambridge and Brighton as areas where a pure vegan concept could work, as well as other parts of London.