19th Sep 2019 10:57
(Alliance News) - City Pub Group PLC is to take a more cautious approach going ahead, it said on Thursday, amid rising political and economic uncertainty in the UK.
The pub owner said it will adopt "a much more product and even more selective" policy to acquisitions going ahead.
Focus will instead be on completing ongoing pub developments, reducing debt, and improving the dividend. Net debt currently stands at GBP30 million, with the firm only paying dividends at the end of each year.
"We cannot ignore the uncertainty in the market due primarily to Brexit and the potential impact of a No Deal. We are a management team focused on the long-term and as such we believe it is prudent for us to rein in our expansion programme until there is more certainty. Instead we will focus on getting our development sites trading, developing our existing estate, reducing our debt and improving our dividends for shareholders," said City Pub Group.
"This will further strengthen our position and minimise the impact of any headwinds whilst continuing to deliver significant growth into the future."
For the six months to June, revenue rose 36% to GBP27.1 million, with like-for-like sales increased by 2.6%.
Pretax profit climbed 1.5% to GBP946,000, but adjusted pretax profit was 19% higher at GBP1.9 million.
Sales in the 11 weeks since June have been 35% higher year-on-year, after the opening of some larger pubs.
"Our targeted expansion of high-quality larger pubs with letting rooms has delivered strong progress for the group in the first half. In the face of robust comparatives, we have delivered good like for like growth too," the company said.
"As our development sites begin trading during 2020, they will drive our performance onward. Our momentum has continued into the second half with strong sales growth."
Shares were 9.3% lower on Thursday morning in London at a price of 197.25 pence each.
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