16th Jan 2019 12:50
LONDON (Alliance News) - The City Pub Group PLC said Wednesday its full year sales are expected to be higher than the year prior, as volume grew and it continues to acquire new pub sites.
For the year ended December 30, revenue is expected to be 22% higher at GBP45.6 million. The financial year prior - which contained 53 weeks - saw revenue reported at GBP37.4 million.
On a like-for-like basis, revenue was 1.6% higher. The firm added that this growth was driven by higher volume rather than the price hikes which came into effect after the end of the financial year. The benefit of these higher prices are expected to be felt during the course of 2019.
Over the festive period, trading was described as "strong" with like-for-like sales for the six-weeks ended January 6 were 7.0% higher.
Overall, City Pub confirmed that it was trading in line with market expectations in financial 2018 and "remains optimistic about its prospects for 2019."
"Trading was very encouraging over the festive period and throughout 2018, particularly post-Easter," City Pub Executive Chair Clive Watson said. "We have grown very rapidly over the last two years, performed well and our new sites are showing their potential."
After the year end, City Pub has agreed to buy two freehold sites in Norwich in Norfolk and Exeter in Devon for around GBP3 million in cash. The two sites are expected to incur GBP1.1 million in refurbishment costs.
"Our low gearing puts us in an enviable position to take advantage of attractive acquisition opportunities that present themselves," Watson added. "If we enter a period of uncertainty caused by Brexit, there is much we can continue to achieve organically."
Net debt stood at GBP10.5 million at the end of the year, the firm continues to have GBP30 million in total borrowing facilities. It intends to renegotiate this facility in the current year.
"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", Watson continued.
Shares in City Pub were 4.3% higher at 205.50 pence on Wednesday.
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