The City Pub Group Plc - Year End Trading Update
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The City Pub Group plc
("The City Pub Group", the "Company" or the "Group")
Year end trading update
The City Pub Group, the owner and operator of 47 premium pubs across Southern England and Wales, announces its year end update for the 52 week period to 29 December 2019.
Total turnover for the year was £59.8m, an increase of approximately 31% on the prior year. Like for like sales were up by 1.7%. The board is pleased with the overall performance of the Group for 2019.
Having traded well over the majority of the year, frustratingly, a number of one-off factors combined in the latter part of Q4 which subdued trading over the important festive period. The Rugby World Cup did not have the impact that we expected. Political uncertainty culminating in the December Election held back sales until the result was known and unhelpful weather during November and December dampened trading further. There were also disruptions on South West trains throughout December due to industrial action, which had an impact on our London Estate.
The 2018 festive season was very strong for the Group with like for like sales of 7%, meaning that comparatives were strong. Like for like sales over the six-week period ending 5 January 2020 were marginally ahead of prior year demonstrating the appeal of our offers and endorsing the resilience of our model.
During Q4, we also completed the refurbishments of the two former Jam Tree sites. Following some delay they reopened in November, too late to benefit from Christmas bookings, which impacted their profitability. Both sites will benefit from a full years' trading in 2020 as well as better Christmas bookings.
Consequently, due to the one-off factors explained above, adjusted EBITDA (before exceptional items) for the year ended 29 December 2019 is now expected to be slightly below market expectations at between £9.1m and £9.2m, approximately 15% ahead of the prior year.
The Group has a strong business model that is quick to respond to the more normal trading conditions now prevailing. Efforts to refocus on operating margins are already underway and this year's performance should see the benefits of this. In addition, there are two underperforming sites that have been earmarked and actively marketed for disposal.
In 2020, the Company will benefit from a full years' trading from the pubs opened in 2019 such as Aragon House, Parsons Green, which has been the most successful pub the Company has ever opened, the Hoste, Burnham Market, the Market House, Reading, and the Pride of Paddington. There are also 3 large sites in development, which will open later in the year; Turks Head, Exeter - June 2020, former Tivoli site, Cambridge - September 2020 and former Nest site, Bath - September 2020. The Group is focussed on completing these development sites for trading and maximising the profitability of the existing estate and, as previously announced, will a take prudent and selective approach to acquisitions.
We remain confident in delivering continued growth and performance in 2020 and beyond.