Lockdown pushes City Pub into the red as revenues slide

Revenues for the year to 27 December tumbled 57% to £25.8m, while the adjusted loss before earnings, interest, tax, depreciation and amortisation was £800,000, compared to EBITDA of £9.1m a year previously.

The adjusted pre-tax loss was £5.1m, compared to 2019’s pre-tax profit of £5.3m, while the pre-tax loss was £7.6m. The pre-tax profit in 2019 was £2.2m.

The Aim-listed group’s estate of 45 wet-led pubs, based in the south of England and Wales, has been effectively closed since November 2020.

However, City said that since outdoor hospitality had been allowed to resume, trading had been “encouraging”. It reopened 24 pubs on 12 April, and trading at those venues is at 77% of 2019 levels.

The company expects to open all 45 sites by 17 May, with a significant number of bookings already taken, and now plans to grow the estate by around 60 sites.

Clive Watson, chief executive, said: “The business has been significantly improved over the past year, placing us in an excellent position to take advantage of the pent-up demand as the country reopens.

“The early signs since we have been allowed to trade outdoors have been very heartening.

“We are a streamlined, well-invested business with a first-rate customer offer. Our pub estate is unique in terms of quality and with the step-change in the business we have an ideal platform to growth successfully in the future.”

During the course of the lockdown, Watson said management had concentrated on minimising costs, improving systems, boosting marketing and building its City Club app.

Anna Barnfather, analyst at Liberum, said: “The recent streamlining of operations, investment in central functions and recent board appointments provides us with confidence that the business can comfortably scale to 100+ pubs. The expansion potential is underpinned by having the lowest leverage across the pub space, and a favourable acquisition market, which play to management’s strength.”

Liberum, which has a ‘buy’ rating and target price of 160p on the stock, is City’s nominated advisor and broker.