City Pub Group Plc - COVID-19 update
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City Pub Group PLC (the "Company")
For the first 11 weeks to 15 March 2020, total turnover is up 11% against the same period last year. LFL sales for the same period were down 4.5%.
Recent trading has been impacted by COVID-19 and its wider effects, particularly on sport, and certain sites have witnessed noticeable reductions in trade as a result. However, other of our more prominent local community pubs have been more resilient.
It is difficult to accurately assess the extent to which COVID-19 could impact our trading and financial performance at this time, however we expect a material reduction to our expectations for 2020. In order to ensure the Company emerges out of the COVID-19 crisis in stronger yet leaner shape, management is taking a highly prudent approach with a number of proactive measures to reduce costs and preserve cash, including:
- reduction in employee costs across head office and at site level;
- reduction in other variable costs e.g. Sky/BT Sport, entertainment, where applicable;
- reductions in Director salaries of 25%; and
- reviewing trading hours to reduce non-productive opening times.
Based on the above actions, the Board is confident the Company has sufficient working capital to maintain its operations for at least another six months without further capital, even in the event the Government extends its current guidance and mandates a temporary closure of all pubs and bars. The Company is also entering into negotiations with its landlords to seek rent holidays for the next 3-6 months. The Company's bankers, Barclays, remain supportive. The Company's balance sheet is strong with current net debt of £32 million against a portfolio consisting predominantly of freehold assets with a net book value of £116 million as at 29 December 2019.
The Company's audited accounts for the year ended 29 December 2019 will be published in April at which time the Company will provide a further update.