The group said it now had the 'strongest balance sheet since inception', and that it was well positioned to take advantage of acquisition opportunities when they arose, including the acquisitions of the remaining unsold shares in Mosaic Pub & Dining, which would result in its 10 pubs forming part of the group’s estate.
In City Pub’s full year results for the 26 December 2021, published today (27 April), it reported that it had achieved revenue of £35.4m during the period – up 37% on 2020 revenue of £25.8m.
Adjusted EBITDA was £5.9m (post IFRS 16), compared to £1.2m the previous year, while adjusted profit before tax was £0.9m, compared to a loss of £5.4m in 2020.
The group said it intended to recommence dividends in September, alongside its interim results.
It disposed of six pubs following the year end – five of which were to Portobello Starboard – for a total of around £17.1m. The group currently has net debt of c. £2m, with £35m banking facilities.
City Pub said trading in the most recent nine weeks was at 98% of 2019 levels on a lfl basis, giving it the confident that 2022 trading across the portfolio will exceed 2019 by the end of the second quarter.
The group, which operates 41 pubs, said that by November last year it had been trading ahead of 2019 levels following the lifting of Covid restrictions earlier in the year, but that 'growing momentum was reversed with the outbreak of Omicron'.
City Pub currently has three development sites, in London, Southern England and Wales (Cliftonville Hotel in Cromer, The Nest in Bath and The Tivoli in Cambridge) and has received planning approval for its new concept Damson and Wilde, which is to launch in the former Café Rouge site it acquired in Bury St Edmunds.
It will feature an all-day menu and premium drinks offer, including coffee, with expectations to develop the concept to capitalise on the strengths of the high street.
“Once proven and implemented, we anticipate replicating the all-day format in other pubs which will further help to premiumise them,” it said. “If Damson & Wilde proves to be a success, we will look at expanding this concept but will not be sucked into paying high rents on the High Street which have increased considerably in the last few months.”
A further three sites are at heads of agreement stage.
During the period the business increased its stake in Mosaic Pub & Dining, from 25% to 36%, at a total investment of £4.1m, and said the intention was to acquire the remaining shares not owned in 2023 which would result in the addition of Mosaic’s 10 pubs into the City Pub estate.
Clive Watson, Chairman of City Pub Group said: “We are emerging from the pandemic in the strongest financial position that we have ever been in and therefore have signalled our intention to recommence dividends in the autumn.
“We have a very strong platform from which to grow and much to look forward to despite the inflationary headwinds our development sites are coming on stream, Mosaic will be fully acquired next year adding ten high quality pubs, our new concept will begin trading and we can take full advantage of, adhering to our strict criteria, freehold acquisition opportunities that arise.”