Yahoo Finance May 17 indoor reopening will see pubs return to making money, says City Pub Group boss
Clive Watson is the AIM-listed group’s executive chairman
(City Pub Group)City Pub Group saw shares rise on Tuesday morning as the London-listed group's boss, Clive Watson, said he expects its 45 wet-led pubs to start trading cash positively from May 17 - the day Boris Johnson has confirmed indoor service can restart.
Watson said the group’s 24 pubs reopened on April 12 have seen sales at 77% of 2019 levels, and that all remaining sites will reopen on the 17th, when executives hope to see a "very good" boost from groups of 30 being allowed to gather outside.
He told the Standard: "We will be generating positive cash from May 17.
"There is huge pent-up demand... Once you can guarantee big groups inside as well [from June 21] then I think trade will quite rapidly get back to 2019 levels."
The pub group today reported a £5.1 million loss for the year to December 27, down from a £5.3 million profit in 2019.
It completed an equity raise in March 2020 and said it now has £15 million of unused facilities, which it plans to use to expand its estate to over 100 sites. The group was slightly protected from the worst of the Covid hit due to having majority freehold sites, and did not draw on Government-backed loans in the period.
Watson said the group has streamlined since Covid hit, worked on its City Club app, increased its levels of accommodation and "really improved our beer gardens and our menus".
The executive chairman said he is "really pleased" with the financial performance given the circumstances, and said: "We've really reset the whole business, it's much leaner, it's match fit now for the upturn, hopefully for the V-shaped recovery."
Liberum analyst Anna Barnfather said City Pub Group's expansion potential is "underpinned by having the lowest leverage across the pub space".
Shares in the company surged 4.1% in early trading on Tuesday.
Revolution Bars also sees a roadmap boost...
Shares in fellow hospitality firm Revolution Bars group also rose this morning, surging by 12.5% after it hiked its full-year outlook on hearing the Prime Minister’s announcement.
Revolution said it saw an “extremely strong” al-fresco reopening, with 25 reopened sites making 48% of 2019 sales between April 12 and May 9, despite operating at just 15% of total capacity.
Chief executive, Rob Pitcher, said that the 66-site chain will reopen all venues still closed on May 17 in a “landmark” day and also hailed “huge pent up demand”.
But Pitcher noted that Revolution venues will still only be able to trade at 50% capacity next week, and that his team “look forward to the full benefits still to come when all restrictions are lifted in mid- June”.
Long periods shuttered have hit the chain hard. It slid to a £17.7 million pre-tax loss for the half year to December 26, and had net bank debt at £28.5 million by May 10, with total available facilities of £40.2 million.
The group said: “Together with continued tight cost control and better-than-anticipated support from third parties, we now expect that our full-year performance for the year ending June 30 2021 will be ahead of previous management expectations.”
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