AGM Trading Update

City Pub Group PLC (The)

07 June 2023

 

The City Pub Group PLC

(the "City Pub Group" or the "Group")

AGM Trading Update

Strong Trading

Majority stake in Mosaic enables integration and consolidation and takes estate to over 50 pubs

Trading

City Pub Group, the operator of a high quality, predominately freehold estate of 43 premium pubs, increasing to 52 Pubs including Mosaic, across Southern England and Wales, is pleased to announce that trading continues to be strong for the first 23 weeks ended 4 June 2023 with sales up 20% on 2022. LFL sales improved by 13% on 2022 and would have been higher if not for recent train strikes. The strong LFL performance is being driven by our strategy to further premiumise the estate and a continuous focus on customer service. We expect this trend to continue through H2 and we will also benefit from the new openings from 2022 which have performed well to date.

Costs have remained in line with expectations and there is now clear evidence of abatement in some areas, although food inflation remains high. Additionally, the Group is benefitting from the disposal of the lower margin pubs sold in 2022.

With net debt low at £8m and £25m undrawn on our existing RCF, the Group has the financial flexibility to achieve its goals. Whilst we are looking at acquisition opportunities carefully, we still believe that in the short-term pub prices will fall and we are therefore in no rush to go out and acquire. We will continue to focus on organic growth from our existing estate.

Majority shareholding achieved in Mosaic (9 pubs)

The Board is also pleased to announce that the City Pub Group has now secured 52% of the shares in Mosaic Pub and Dining Group, through the acquisition of existing shares in The Galaxy (City) Pub Company Limited, The Pioneer (City) Pub Company Limited and The Sovereign (City) Pub Company Limited (the "Mosaic Companies") for a total cash consideration of approximately £0.7m, acquired by way of a tender offer from underlying shareholders in the Mosaic Companies comprised of a number of EIS holders. This transaction takes its total investment to £7m. For the year ended 27 March 2022, the Mosaic Companies recorded an audited aggregate loss before tax of £110k, with aggregated net assets as at 27 March 2022 of approximately £10m.

From 26 June 2023, we will assume operational control of the pubs in the Mosaic estate which consists of 9 pubs (7 freehold, 2 leasehold) in London and Birmingham. We are very excited about adding these quality pubs to our existing estate. The integration should be smooth, given our existing supplier crossover and synergies.

Clive Watson, Chairman of City Pub Group said:

"The strategy that we have pursued over that last couple of years is now manifesting itself in our out performance. We have an excellent estate of high-quality premium pubs, well invested, located well and trading strongly. We also have a more efficient business having streamlined the operating structure to meet our existing needs. Our estate is growing through cost effective acquisitions and we have reached a landmark moment for the City Pub Group as we now own and operate more than 50 premium -predominantly freehold - pubs in the south of England and Wales. City Pub Group is in good shape and we remain optimistic about the prospects of the company for the remainder of 2023 and beyond."

7 June 2023

Enquiries:
City Pub Group Clive Watson, Executive Chairman Holly Elliott, CFO	Today: via Instinctif
Instinctif Partners                     Matthew Smallwood Justine Warren Guy Scarborough	[phone]
Peel Hunt (Joint Broker) George Sellar	[phone]
Liberum (Nomad & Joint Broker) Chris Clarke Edward Thomas	[phone]

For further information on City Pub Group pubs visit www.citypubcompany.com

 

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