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Decent write up on Proactive: The City Pub Group snapping up bargains as lockdown ends
- The City Pub Group now trading profitably as restrictions ease
- England’s publicans wait for stimulus package after Super Saturday reopening
- City Pub Group PLC has plenty of potential, according to broker
- City Pub Group raring to go as re-opening date gets nearer, says chairman Clive Watson
The City Pub Group owns and operates an estate of premium pubs across the southern half of England and Wales.
The group’s pub estate comprises 45 free houses located largely in London, Cathedral cities and market towns, each of which is focused on appealing specifically to its local market.
Its portfolio consists of predominantly freehold, managed pubs, offering a wide range of high-quality drinks and food tailored to each of its pubs’ customers.
The City Pub Group PLC (LON:CPC) said it is currently trading profitably and at 90% of 2019 levels.
The publican has reopened 42 out of 48 sites, located across Southern England and Wales, while four are under development and earmarked to open in spring 2022.
The firm said the cost base has been significantly reduced and the performance has been “very pleasing”, however the continuing social distancing rules and absence of large bookings have limited trade.
This became apparent at the start of the European Football Championships, it added, where many customers did not want to watch live sport at pubs because of the social distancing restrictions.
“We look forward to all restrictions being lifted on 19 July and we believe that once restrictions are lifted, trade will build over the remainder of the year to above 2019 levels, although it is difficult to predict at this stage exactly when this might happen,” City Pub said.
The AIM-listed group currently has over £16mln of unutilised banking facilities, is cash generative and is starting to identify new acquisitions.
City Pub also revealed that it has purchased the freehold of the Roundhouse in Wandsworth Common, where it only had four years left on the lease, for a total consideration of £1.1mln.
''We have been very encouraged by how we have traded since reopening despite the continuing restrictions. We are cash generative and trading profitably demonstrating the strength of our business model,” said executive chairman Clive Watson in a release.
"City Pubs has demonstrated its ability to reduce its cost base and streamline operations, which bodes well for the recovery in sales and profit margin as trading restrictions are further lifted," they said.
"We believe City Pubs deserves to trade on a premium to its pub peers given its growth outlook. We expect further momentum will be driven from evidence of the operational improvement coming through with margin progression and upside from future acquisition activity."
https://www.proactiveinvestors.co.uk/companies/news/953444/the-city-pub-group-now-trading-profitably-as-restrictions-ease
Another one Sunday!!! If this doesn't put bucks into the SP, I shall worry.
....shown on all their screens and will not even be standing room. Beer tonight - SP tick up tomorrow!
Trading profitably @90% of 2019 levels, thanks to cost savings. That is very good news.
Saw earlier on Bloomberg News an Investment Manager for BlackRock who used to be an advisor to George Osborne when Chancellor of The Exchequer. He says that Javid is more pro-business than Han****, therefore expected to end restrictions on July 19 as vaccinations are levelling off hospitalisations.
More info from Watson on menu simplification, positive restructuring over the last year and plans to expand to 100 sites:
https://www.morningadvertiser.co.uk/Article/2021/05/13/How-will-City-Pub-Group-look-to-expand-after-lockdown
Good to hear about pub visits from shareholders and that all sounds pretty positive. Regarding the menus across the CPC pubs, I read that Clive Watson said they had reduced them from 45-odd to 2, which would simplify the supply chains and make it easier for kitchen staff to switch venues I guess.
I notice that the upcoming AGM later this month is being held at the Aragon House pub in Parsons Green, I might try to get along to it. I had a look at room bookings and it seems that they look pretty strong.
Visited last night. Scores very highly. Is a microbrewery and has a proper pizza oven and uniformed security guard who is himself very impressed. Exquisite pizza and i saw others being served. (I ate same as I had in Alfies. This was better largely because the base was not instant.) Saturday night and the pub was busy but not to capacity Apparently that occurs when major sport is on. Front garden on the street was full and not unruly. The whole area seemed full of young people. Students get a 15% discount Sun toThurs every week. Purely from a marketing point of view and as a shareholder, they really know what they are doing. Oh and the staff were enthusiasic as well.
Based on their Discounted Cash Flow model the shares are worth 325p
From a few weeks back but didn't spot it being posted...
https://www.proactiveinvestors.co.uk/companies/news/949053/city-pub-group-deserves-premium-valuation-liberum-says-after-better-than-expected-results-949053.html
................with good weather now they will be heaving and the absence of foreign holidays now will make these weeks really massive.
A well timed buy. The weather forecast for the next few weeks is very favourable, offering the prospect of warm and dry weather. Should mean that any trading figures achieved since limited reopening, will be dwarfed over the coming weeks. Summer is well and truly coming.
Great vote of confidence from the chairman. Trading must be looking very strong since the May 17th indoor reopening
Thoughts on what has happened with RBG?
Plenty of drinkers, mainly upper teens to low 30s. Had perfectly decent pizzas and great real ale. Will try the Southampton outlet soon. Likely to be profitable right now but the women are young enough to be my grandchildren!!!
Any tips?
I wouldn’t necessarily rule it out. I would however suggest that you do your own research as well and compare with other competitors. I sold my Wetherspoons a month ago as I read a rumour that indoor table service may remain for many months more. I W on’t be buying nto food and drink establishments until the Indian variant is sorted. Investing in that sector right now is a gamble. Anything that effects indoor food and drink capacity will impact heavily on income and profits.
Anybody got any opinions on taking heed of newspaper tips?
An inevitable loss for the year, but not one that will damage the company. The BoD have demonstrated their competence by preparing for full reopening to maximise every opportunity for increasing sales, whilst reducing costs with improved operation not only this summer but also going forward.
...how these have dropped since I bought in! But I think they are rather volatile and I hope for sharp upward movement after 17th of this month. If this is excluded from what is likely to be a bumper time for other pub chares, it is time to think of running away, rather than hanging on in the hope of a bid.
I realise I rail on about buy and sell volumes versus prices, but today is another example. At 9:30 there were 27/- shares bought versus 1200 sold yet price down 2.75%!! How does an investor
believe in an ordered market?
Looking forward to sampling a beer and meal in each an every one of these establishments to mark my investment of today.
Cheers everyone, all the best.
Likely that sentiment will improve after May 17, assuming the road map is not delayed. The finals should be in June. The figures won't be great (we know that). Would expect some sort of trading update, which will have a greater impact on the SP going forward. With most adults in UK having had the vaccine by the end of July, shareholders can expect business to be booming this summer. Simply because, so many of us will not bother with a foreign holiday this year. Next winter is too far away to worry about. With the high probability of boosters and new vaccines. (can't remember the name but UK have a novel virus on order, 175m doses to be manufactured here in the UK not EU) available by this winter any worries might well prove to be ill founded in any case.
Looks like it is doing :-)
Quite a few of their pubs and eateries open today. Including Alfie's
https://www.alfieswinchester.com
Not all City Pubs open today due to a lack of outside space. The good news though is that what must be the crown jewel in the City Pub estate, The Hoste Arms, luxury hotel, is open for business, including lunch, tea or dinner on the Terrace. Plus the rooms are available available for occupation. They need to be booked but there is some walk-in capacity. City Pub management wisely took advantage of the current lockdown to spend around £300k on the refurbishment of this important revenue earner for the company. Warmer weather this weekend and May 17 and full estate opening to look forward to.
Take a look: https://www.thehostearms.com/