17th Mar 2020 11:14
(Alliance News) - City Pub Group PLC on Tuesday said it will take a number of steps to cut costs as recent trading has been hurt by the Covid-19 outbreak.
The company also said that it expects a material reduction to its estimates for 2020 despite difficulty in accurately assessing the extend of Covid-19 impact on trading and financial performance.
Shares in the company were down 30% at 57.75 pence each in London on Tuesday morning.
For the first 11 weeks to March 15, the pub operator posted a 4.5% drop in like-for-like sales from the year ago period. Turnover rose 11%.
The London-based company said it plans to cut employee costs, reduce variable costs such as Sky/BT Sport charges, slash director salaries by 25% and reduce non-productive trading hours to emerge "stronger" and "leaner" from the pandemic.
The company is also entering into negotiations with its landlords to seek rent holidays for the next 3 to 6 months.
"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," City Pub said.
The company currently has a net debt of GBP32 million against a portfolio of freehold assets worth GBP116 million as at December-end.
By Tapan Panchal; [email protected]
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