Shares in City Pub Group PLC (LON:CPC) ticked higher on Wednesday morning after the ‘premium’ pub operator saw revenues soar by more than a third last year.
Sales jumped to £37.4mln in the 12 months ended December 31, with much of that growth coming from the eight new pubs it added to its portfolio over the year.
READ: City Pub Group smashes through £100mln barrier on AIM debut
Even when those new additions are stripped out, like-for-like sales still managed to eke out growth of 3.8%.
The Christmas period is always a key time for the pub and restaurant industry, and City, which only joined AIM in November, didn’t disappoint.
It told investors that trading over the holiday season was “strong”, with many of the recent openings trading ahead of expectations and a number of pubs delivering record results.
On the back of the “successful” festive period, City said it traded in line with market expectations in 2017 and “remains optimistic” about its prospects for the year ahead.
Plans to double estate within four years
As well as the eight new pubs it acquired last year, City Pub Group also put the wheels in motion to snap up several others as it looks to make good on plans to double the size of its estate over the next few years.
Contracts have been exchanged for new sites in Clapham and Reading and are due to complete later this month, while the board has said it is “close” to exchanging on further pubs.
“Our new openings are performing well and we are excited about our recent high-quality acquisitions,” said executive chairman Clive Watson.
“We continue to seek and find a ready flow of acquisitions to build the group and we are close to exchanging on further units.”
Co-founder departs
City– which has a portfolio of 33 trading pubs across London and the south east – was co-founded back in 2011 by serial pub entrepreneur Clive Watson.
Aside from making appearances on reality TV show Made in Chelsea alongside his daughters Lucy and Tiffany, Watson is well-known in the industry having sold off his Capital Pub Company to Green King PLC (LON:GNK) for £93mln back in 2011.
Watson’s co-founders are pub veteran David Bruce – who he worked with at Capital – and former Fuller’s managing director John Roberts.
The company revealed today that Bruce is to step down to focus on his other interests in the pub and brewing industry.
Taking Bruce’s position as non-executive director is former Punch Taverns chief operating officer Neil Griffiths who will join the board with immediate effect.
“I would like to personally thank David for helping me establish The City Pub Company following the sale of the Capital Pub Company in mid-2011,” added Watson.
“I am delighted that Neil Griffiths has joined our board - his knowledge and experience will be extremely valuable as we aim to double the size of the Group over the next three to four years.”
“Encouraging” update says City broker
“City Pub Group finished last year with a flourish - a total of eight openings and +3.8% like-for-like sales growth lifted revenues by +34% to £37.4mln (est. £37.2mln) for FY17,” wrote Liberum analyst Anna Barnfather.
“Furthermore, it has secured another three sites for 2018 and expects to exchange on several more in short order.
“Hence the group appears comfortably on track to meet our base case assumptions and is well on its way towards the target of doubling in size over the next 3-4 years.
“We find the update encouraging and reiterate our ‘buy’ and target price of 200p.”
Shares rose 1.4% to 170p early on Wednesday.
--Updates for share price and broker comment--
