City Pub Group posts revenue rise after solid festive period

Pub owner City Pub Group reported a rise in full-year revenue on Wednesday as it enjoyed a solid performance over the festive period and benefited from new pub openings.

In an update for the year to 30 December, the company said total turnover rose around 22% from the previous year to £45.6m, while like-for-like sales were up 1.6%, mostly driven by volumes as the price hikes implemented at the end of the year will start to bear fruit during the course of 2019. Analysts had pencilled in LFL growth of around 1.2%.

Trading over the festive period was strong, with LFL sales over the six weeks to 6 January up 7%.

Executive chairman Clive Watson said: "Trading was very encouraging over the festive period and throughout 2018, particularly post-Easter. We have grown very rapidly over the last two years, performed well and our new sites are showing their potential.

"Our low gearing puts us in an enviable position to take advantage of attractive acquisition opportunities that present themselves. If we enter a period of uncertainty caused by Brexit, there is much we can continue to achieve organically.

"Our estate is in great shape; well invested and trading well with considerable upside potential, including the additional benefit of the quality of our earnings increasing as we invest and grow our accommodation business which delivers an incremental income stream."

The group, which said it was optimistic about its prospects for this year, exchanged on two freehold sites since the year-end, one in Norwich and one in Exeter, for £3m in cash. The site in Norwich is an extension to its existing operation, The Georgian Townhouse, while the site in the centre of Exeter will give it extended presence in that city.

In addition, City Pub is currently refurbishing three large sites in Parsons Green, Reading and Cambridge.

Berenberg, which rates the stock at 'buy', said: "We continue to believe the company can create substantial value from both its development assets and further acquisitions over the next few years as it continues to deploy its balance sheet."

It added that 2019 should be "another transformational" year for the company thanks to its strong pipeline.

At 1100 GMT, the shares were up 6.1% to 209p.