CPC.L Regulatory News (CPC)

The City Pub Group PLC

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

FINAL RESULTS FOR THE YEAR ENDED 29 DECEMBER 2019

The City Pub Group is pleased to announce its audited results for the 52 weeks ended 29 December 2019. The Group owns and operates a predominately freehold estate of 48 wet-led pubs in London, Southern England and Wales.

2019 Results Highlights:

· Further significant growth in trading activity in 2019 with focus on acquiring higher turnover pubs and accommodation capability rising from 54 rooms at the end of 2018 to 172 at year end

· Revenue up 31% to £60.0 million (2018: £45.7 million)

· Like for like sales increased by 1.7% year on year, against a tough comparable period following the World Cup and long, hot summer in 2018

· Significant increase in adjusted EBITDA* up 15.4% to £9.1million (2018: £7.9 million), despite a temporary reduction in margin

· Adjusted profit before tax** up 4% to £5.3 million (2018: £5.1 million)

· Reported profit of £1.3 million (2018: 2.0 million)

· Year-end net debt of £31.0 million

* Adjusted earnings before exceptional items, share option charge, interest, taxation, depreciation and amortisation.

** Adjusted profit before tax is the profit before tax, share option charge and exceptional items.

2020

· 2020 began well, but growth plans immediately curtailed by COVID-19 and closure of estate in March

· Decisive action secured appropriate liquidity well into 2021 and the long-term future of the Company: £35 million RCF and £15 million accordion option agreed; £22 million of equity raised from existing and new shareholders by way of a Placing and Open Offer which has reduced bank borrowing by two thirds

· Measures immediately taken to reduce cost base included: staff furloughed, Director pay cuts, Government assistance secured where possible, supplier discounts, insurance policy claims and successful negotiations with landlords

· Business reset and streamlined with more robust centralised systems in place

· In excellent shape to re-open estate and take advantage of growth opportunities that present themselves in a post COVID-19 era

Clive Watson, Executive Chairman of The City Pub Group, said:

"We are excited about the prospect of reopening, not least because we have an excellent team who are keen to get back to work and keen to show hospitality to customers again. However, we will do it cautiously and above all safely.

We will reopen with a reset, more efficient, streamlined business, reduced capital expenditure and our focus on the existing estate. We have a strong balance sheet not only to endure and prosper again, but also to take advantage of opportunities that arise.

12 June 2020

This announcement contains inside information for the purposes of EU Regulation 596/2014.

Enquiries:

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

Chairman's Statement 2019

2019 saw further significant growth in the Group's trading activities. We continued to expand our pub estate, focusing on bigger sites, in most cases with outside trading areas. We increased the number of letting rooms across the Group from 54 at the end of 2018, to 172 in 2019, and targeted cities where we already have a presence, e.g. Cambridge, Bath, Exeter, as well as acquiring high-quality existing trading units such as The Hoste Arms in North Norfolk.

At the time of the IPO in November 2017, we said we would double the size of our trading estate of 33 sites by mid-2021. During 2019 this strategy was revised to focus more on high-turnover sites which could generate higher levels of unit EBITDA. This revised strategy continues to be the Board's approach. With a strengthened balance sheet following our recent fundraising, we are well placed to take advantage of attractive opportunities whilst maintaining discipline.

2019 was a year of tough comparatives given England's success in the 2018 World Cup and the long, hot summer in that year. The Group also found the last quarter of 2019 challenging as trade was affected by Brexit uncertainties, the general election, poor weather conditions and also the re-opening of the two Jam Tree sites towards the end of November, which resulted in the loss of important Christmas trade.

2020 began well, but with the onset of COVID 19 our growth plans were immediately curtailed. It has been almost three months since the enforced closure of our pubs and I have been incredibly impressed by the way our team members have adapted and worked collectively. Crises often bring out the best in people and our team were quick to react and adapt to the situation. Protecting our people has always been our top priority and I can report that morale remains high amongst our employees and I am confident that we have a very motivated team that is keen to return to running pubs, providing hospitality and serving customers. This will enable us to manage the recovery from closure effectively when restrictions are lifted.

Trading estate

The Group began 2019 with 44 trading pubs and 3 development sites. We now operate 48 pubs with a further 4 sites in development.

In addition, the number of bedrooms, an area of opportunity delivering incremental and high margin income, has risen to 172 and we anticipate operating around 200 by the end of 2021. This was enhanced by the opening and acquisition of pubs with rooms during the course of 2019, such as Pride of Paddington (12), The Hoste (53), Aragon House (15) and Market House (24). We also acquired a property adjacent to the Georgian Townhouse in Norwich, which increased their room letting capacity from 22 to 36.

Construction work was stopped on the Turk's Head in Exeter due to COVID-19 but will resume once the Board considers it safe to do so. It is hoped with the current situation allowing construction work to recommence that this site will be ready to trade by October 2020.

Early-stage development of the former Tivoli site in Cambridge had also been undertaken and the Board intends to restart construction on this site to enable a pre-summer 2021 opening. The site will benefit from an open-roof trading area as well as 3 other trading floors.

A site in Bath, formerly known as The Nest, will begin construction work to also facilitate a pre-summer 2021 opening. This site benefits from a large outside trading area overlooking the city of Bath.

The Group has also exchanged contracts to build a 16-bedroom trading unit in Mumbles near Swansea. Construction on this site is anticipated to start in spring of 2021 and scheduled to open at the beginning of 2022.

Our proven strategy of developing clusters of pubs in targeted cities of England and Wales will continue. By building up clusters, we improve local expertise and create career prospects for our staff, both of which benefit the business enormously.

Our pubs are largely located in Cathedral cities. We now have 18 trading sites in London, 3 in Brighton, 9 in Cambridge and other clusters in cities such as Bristol, Winchester, Exeter and Oxford. We will seek to acquire pubs in those areas where we are already trading, as well as identifying additional cathedral cities across the southern half of England where we can build presence.

Acquisitions / Openings in 2019:

· Pride of Paddington: a leasehold acquired in February 2019 located in a prime position next to Paddington station. We envisage significant growth potential with the opening of Crossrail. The site also benefits from accommodation through its hostel and letting rooms.

· The Hoste Arms, Burnham Market, North Norfolk: an iconic 53-bedroom site with spa, cinema and gym. It is a prominent and popular location only a 45-minute drive from Norwich where we also operate the Georgian Town House which offers 36 bedrooms. These two sites complement each other well in terms of marketing, suppliers, staff and other operational activity. 

· Aragon House, Parsons Green: a large site located on the edge of Parsons Green in south west London, which opened to the public in June 2019. The pub offers a large beer garden and 15 boutique letting rooms.

· Market House, Reading: a former bank that has been transformed into a pub with 24 bedrooms. The business trades across four floors and offers customers a beer garden and roof terrace. The site opened in July 2019.

· Island, Kensal Green: a freehold acquired in July 2019. This site is leased out to another operator who runs this site as a tenanted pub.

Disposals:

· The Grapes, Oxford: this site was sold in February 2019.

Financial Highlights

Summary for the year ended 29 December 2019:

· Revenue up 31% to £60.0 million (2018: £45.7 million)

· Like for like sales up 1.7%

· Adjusted EBITDA* up 15.4% to £9.1 million (2018: £7.9 million)

· Adjusted profit before tax** up 4% to £5.3 million (2018: £5.1 million)

· Reported profit of £1.3 million (2018: £2.0 million)

The Board is pleased with the significant increase in the Group's adjusted EBITDA. Operating margins temporarily decreased from 17.2% to 15.1% reflecting the unwinding of the annual profit share scheme alongside the introduction of a well-received weekly based scheme, and the implementation of a regional-based operational structure developed to manage more efficiently the increasing scale of our estate. This temporary decline in operating margin performance will be reversed when we return to normal trading, partly as a result of the one-off nature of the causes, but also by further streamlining of many of the cost bases in the pubs and at head office. The proportion of room sales in the sales mix will also drive operating margin improvement.

The Directors have taken the prudent step to write down £1.9m across a number of pubs as a property impairment charge.

During the year, we invested £3.4 million into refurbishing and maintaining the existing estate.

COVID-19 and Equity fundraising

The impact of COVID-19 has had a devastating impact on the pub sector, with the enforced closure of all the Company's pubs on 20 March 2020.

The Board acted decisively to secure appropriate liquidity for the business to endure a prolonged period of closure should that be mandated. £15m of new shares were placed with institutional shareholders and approximately a further £7m was raised from existing shareholders in an open offer. This has enabled the business to reduce its bank borrowings by two thirds and as a result has significantly strengthened the Group's balance sheet.

The Board would like to put on record its appreciation for the support it achieved from new and existing shareholders who have helped secure the Company's long term future, as well as the advice received from its Nomad, Brokers and Professional Advisors.

The Board has committed to run the business on a very tight rein and the following actions have been taken to minimise running costs during closure, whilst maintaining the Company's essential needs:

- Pub and head office costs have been reduced to the minimum

- 98% of staff have been furloughed on the Government's Job Retention Scheme

- Directors' pay has been cut by 50% until pubs reopen and there have been other head office salary sacrifices in addition to this

- Retail, Hospitality and Leisure Grants have been applied for where applicable

- Negotiated, where possible, early settlement discounts from suppliers, but at the same time ensured that smaller suppliers are paid in full

- Entered into negotiations with landlords with regards to rent holidays, rent deferrals and changes in terms of the lease. In some cases, where the Group can do so, leases will be reverted to the landlords

- Pursuing claims under our insurance policies where the Company benefits from a loss of trade clause in the event of an outbreak of a notifiable disease

COVID-19 has created immense challenges for our sector but as a result of the Board's quick actions to strengthen the balance sheet through the share placing and decisive actions on cutting costs, the Board believes the Group has significantly mitigated the devastating effect that COVID-19 has had on the pub sector and that it has sufficient financial liquidity to see the Company through to well into 2021.

Bank Facilities

In July 2019, the board entered into a new 5-year banking arrangement with its existing providers, Barclays Bank plc. The Board now has a £35m revolving credit facility with a £15m accordion option. The proceeds from the share placing have been utilised to reduce our bank borrowings by two thirds.

Simultaneously with the share placing, Barclays agreed to waive covenant testing until Q4 2020. Barclays remain very supportive of the Group and the Board would like to put on records their thanks for their quick decision-making process.

Barclays have now agreed to replace the Group's existing financial covenants under its RCF with a Minimum Liquidity Test, requiring cash or facility headroom in the sum of £8m, to be tested quarterly until and including 30 June 2021, after which date the financial covenant tests as currently documented will recommence.

The Board has not opted to revalue its property and fixed assets and the book value of the portfolio on a normalised trading basis is £150m. Current net debt stands at £13m and, with freeholds making up around 90% of the book value, the Company has a very strong asset-backed balance sheet. 

Organisation

COVID-19 has given the Board time to evaluate how the Group can run its operations more effectively. Traditionally, the Group has run its pubs as independent units where a lot of the local decision making was taken at site level. With the changes in technology, especially in relation to digital marketing and online bookings, now is the time to change how the Group manages its day-to-day retail operations.

The Board is currently in the process of introducing a central sales and marketing function. Online sales and telephone sales will now be run centrally at head office and marketing of key events such as Valentine's Day, Six Nations rugby, Easter, Christmas and other events will be done centrally. Pubs will still be able to market local events themselves to maintain individuality and focus.

By adopting a central sales and marketing approach, the Group will be able to use its database more effectively over the next 3 months, and will also improve the functionality of its City Club app. The Group will work closely with key brands, existing and new, to continue its premium offering.

There will be little additional cost, as much of this functionality sales and marketing has previously been done regionally.

This will free up time for the retail operations, enabling them to focus more on execution of the offer with a more streamlined, but premiumised, offer. The Group also expects to see savings elsewhere in systems, finance, unit employee costs and other regional costs.

It is the Board's belief that there is unutilised capacity within its current estate which can be utilised more effectively when we return to normal trading conditions.

Other measures which are being implemented include zero-budget policies, streamlining the Company's supply chain, and renegotiating construction costs, particularly on the equipment side.

COVID-19 has given the Group a one-off opportunity to re-set the way the business is run. Pubs will continue to be operated on an individual basis but with the support of a more robust central system. This will enable the Group to raise the bar for its retailing standards across the estate.

Dividends

The Board believes that future acquisitions should be funded out of the free cash flows generated by the Group's operations and not through increased debt. Therefore, the Board does not recommend a dividend for this year and is unlikely to resume dividend payments until trading is back to optimum levels.

AGM

The AGM this year will be a virtual meeting due to COVID-19 and will be held at 12pm on Monday 27 July 2020.

Outlook

COVID-19 has caused significant disruption to our growth plans and may change the dynamics of the sector going forward. The length of time we have had to be closed has caused challenge not only financially, but also for our people. We are grateful for the Government support, particularly most recently the extension to CJRS through to October. We are encouraged by the Government's recent statement that the first tentative steps, outside only and with social distancing, may come into effect from 4 July. However, it could be a while until there is full recovery and we have already prepared for the possibility of a second wave.

Given the continued uncertainty around timing of a full re-opening and customer behaviour, the Group is not in a position to provide financial guidance at this stage. We will continue to be agile and adapt as necessary, but with challenge comes opportunity and it is the Board's primary resolution to ensure that when trading does commence, the Group's pub estate will be match-fit for purpose and our people will return full of vigour and enthusiasm.

We will reopen with a more efficient, streamlined operation, reduced capital expenditure and our focus being on increasing utilisation of the current estate. The Group benefits from having a strong, asset backed balance sheet, low fixed costs as a percentage of historic sales and liquidity that will allow us to endure. Improvement in the effectiveness of our sales and marketing team together with our strategy to further premiumise our pubs will strengthen our position in the sector.

I would like to thank the Group's staff, Directors, suppliers, advisors, bankers and our shareholders for all their support since lockdown. In the last 30 years, I have faced several major sector challenges but nothing like COVID-19. However, I do believe that there is light at the end of the tunnel, and I am confident that the City Pub Group is well financed, well run and will take its opportunities to emerge as a force within our sector.

Consolidated statement of comprehensive income

for the 52 week period ended 29 December 2019

All activities comprise continuing operations.

There are no recognised gains or losses other than those passing through the consolidated statement of comprehensive income. The notes form part of these financial statements.

Consolidated statement of financial position

as at 29 December 2019

The notes form part of these accounts.

Approved by the Board and authorised for issue on 11 June 2020.

Clive Watson Tarquin Williams

Chairman Chief Financial Officer

Company No. 07814568

Consolidated statement of changes in equity

for the 52 week period ended 29 December 2019

The notes form part of these accounts.

Consolidated statement of cash flows

for the 52 week period ended 29 December 2019

The notes form part of these accounts.

Notes to the financial statements

for the 52 week period ended 29 December 2019

1 Company information

The financial statements of The City Pub Group plc (as consolidated "the Group") for the 52 week period ended 29 December 2019 were authorised for issue in accordance with a resolution of the directors on 11 June 2020. The Company is a public limited company incorporated and domiciled in the UK. The Company number is 07814568 and the registered office is located at Essel House 2nd Floor, 29 Foley Street, London, England, W1W 7TH.

The Group's principal activity is the management and operation of public houses. Information on the Company's ultimate controlling party and other related party relationships is provided in Note 28.

Exemption from audit

For the period ended 29 December 2019 The City Pub Group plc has provided a guarantee in respect of all liabilities due by its subsidiary The City Pub (West) Limited (Company No. 07814571), Gresham Collective Limited (Company No. 01508725), BNB Leisure Limited (Company No. 02450551), Flamequire Limited (Company No. 01834157), Randall and Zacharia Limited (Company No. 08465216) and Chapel 1877 Limited (Company 04545416) thus entitling them to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies.

2 Significant accounting policies

2.1 Basis of preparation

This preliminary announcement does not constitute the Group's full financial statements for the year ended 29 December 2019. The auditors have reported on the Group's statutory accounts for the year ended 29 December 2019 under s495 of the Companies Act 2006, which do not contain statements under s498(2) or s498(3) of the Companies Act 2006 and are unqualified. The statutory accounts for the year ended 29 December 2019 will be filed with the Registrar of companies in due course.

The consolidated financial statements of The City Pub Group Plc ("the Group") have been prepared in accordance with International Financial Reporting Standards ("IFRSs"), as adopted by the EU, IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

IFRS is subject to amendment and interpretation by the IASB and the IFRS Interpretations Committee, and there is an on-going process of review and endorsement by the European Commission. These accounting policies comply with each IFRS that is mandatory for accounting periods ending on 29 December 2019.

The financial statements have been prepared under the historical cost convention as modified for financial instruments at fair value and in accordance with applicable accounting standards.

2.2 Statement of Compliance

The financial statements of the Company and Group are prepared in accordance with applicable International Financial Reporting Standards ("IFRS") as adopted by the European Union.

2.3 New and Revised Standards

IFRS in issue but not applied in the current financial statementsThe following IFRS and IFRIC Interpretations have been issued but have not been applied by the Group in preparing these financial statements, as they are not as yet effective. The Group intends to adopt these Standards and Interpretations when they become effective, rather than adopt them early.

· IFRS 16, "Leases", effective date 1 January 2019

· IFRIC 23 "Uncertainty over Income Tax Treatments" (effective 1 January 2019 and not yet endorsed by the EU)

· "Amendments to IFRS 9: "Prepayment Features with Negative Compensation", "Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures", "Annual Improvements to IFRS Standards 2015-2017 Cycle" and "Amendments to IAS19 - Plan Amendment, Curtailment or Settlement" (effective 1 January 2019 and not yet endorsed by the EU)

IFRS 16, "Leases"

IFRS 16 will be effective for the annual period beginning on 30 December 2020 and adoption of the standard will impact the treatment of leases currently treated as operating leases, by bringing lease liabilities and an associated asset into the statement of financial position. The biggest impact relates to property leases for the Group's Leasehold property sites and Head Office. Based on the provisional assessment of the new standard, the Group expects the following impact to the period ending 27 December 2020: recognition of a right-of-use asset of between £18.5m to £22.5m and lease liabilities, to be split between current and non-current, of between £18.5m to £22.5m. In addition, the Group expects reduced lease operating expenses in the region of £2.0m to £2.2m, offset by increased depreciation and interest charges in the region of £2.1m to £2.5m, thereby increasing EBITDA. Profit before tax will be lower in the initial years, after transition, as a result of the effective interest unwind on reducing liabilities rather than having a straight-line expense under IAS17. Cash flows from lease payments for qualifying leases will now be presented as financing cash flows instead of operating cash flows without changing any timing of cash flows.

2.4 Predecessor value method

During the period ended 31 December 2017 the Company undertook a common control combination, through the issue of new Ordinary Shares, B-Ordinary Shares and Convertible Preference Shares in exchange for 100% of the Ordinary Shares, B Ordinary Shares and Convertible Preference Shares of The City Pub Company (West) Limited an entity under common control. The Directors considered the business combination to be a common control combination, as the combining entities were ultimately controlled by the same parties both before and after the combination and the common control was not transitory. As a common control combination, the transaction was outside the scope of IFRS 3 ("Business Combinations") and the Directors therefore considered the nature of the transaction, which was eligible for Merger Relief under the Companies Act, and decided that the predecessor value method would be most appropriate for preparing those and subsequent Group financial statements.

The predecessor value method involves accounting for the assets and liabilities of the acquired business using existing carrying values rather than at fair values, as a result no goodwill arose on the combination. The use of the predecessor value method gave rise to an "other reserve", which represents the share premium of the subsidiary entity on consolidation.

The financial results of subsidiaries are included in the consolidated financial information from the date that control commences until the date that control ceases. The consolidated financial information presents the results of the companies within the same group. Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial information.

2.5 Going concern

In July 2019, the Group agreed a new £35m revolving credit facility with Barclays bank plc and an accordion option of another £15m all on improved terms. This is initially a 3-year deal, but with the options to extend for two additional years, so potentially taking the facility out to July 2024.

The impact of COVID-19 has had a devastating impact on the pub sector, with the enforced closure of all pubs on 20 March 2020.

The Board acted decisively to secure the appropriate liquidity for the business to endure a prolonged period of closure should that be mandated. £15m of new shares were placed with Institutional Shareholders and a further £7m was raised from existing shareholders in an open offer with total funds raised of £22m pre expenses, which was received in April 2020. This has enabled the business to reduce its net debt by two thirds and as a result has significantly strengthened the Group's balance sheet.

Simultaneously with the share placing Barclays agreed to waive covenant testing until Q4 2020. Barclays remain very supportive of the Group.

Barclays have now agreed to replace The City Pub Group plc's RCF's existing financial covenants with a Minimum Liquidity Test in the sum of £8m to be tested quarterly until and including 30 June 2021, after which date the financial covenant tests as currently documented will recommence.

During the fundraising process, the Board assured shareholders that it would run the business on a very tight rein and would take actions to minimise running costs during closure whilst maintaining the company's essential needs.

We have reduced Pub and head office costs to the minimum. Some 99% of staff have been furloughed on the governments Job Retention Scheme. The Directors' pay has been cut by 50% until pubs reopen and other head office salaries have been reduced. We have applied for Grants where applicable. At the current time, we have not looked to access funds via the Government's Coronavirus Large Business Interruption Loan Scheme (CLBILS), but this is an option that remains available. The Group have negotiated settlement discounts from some larger suppliers, but at the same time ensured that smaller suppliers are paid in full. We are in negotiations with landlords with regards to rent holidays, rent deferrals and changes in terms of some leases. The Group is pursuing claims under our insurance policies where the Company benefits from a loss of trade clause in the event of an outbreak of a notifiable disease.

COVID-19 has created immense challenges to our sector but as a result of the Board's quick actions to strengthen the balance sheet through share placing and decisive actions on cutting costs - variable or fixed -, the Board believes the Group has significantly mitigated the devastating effect that COVID-19 has had on the pub sector and that it has sufficient financial liquidity to see the Company through to well into 2021.

We have performed a number of scenarios to consider the potential impact of COVID-19 on the Group's results. In preparing our forecasts, we have assumed that the pubs would be fully closed for a period of over 4 months and that some pubs would be able to reopen from 1st August. We have not assumed that there will be additional closures due to a second wave of the Coronavirus. We anticipate that it may take considerable time before trade is back to the pre-COVID19 levels.

Based on the current financial projections to 30 June 2021 and having considered the facilities available, the Board is confident that the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, the Board consider it appropriate for the Group to adopt the going concern basis in preparing its financial statements.

2.6 Revenue

Revenue represents external sales (excluding taxes) of goods and services net of discounts. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration receivable net of trade discounts and VAT.

Revenue principally consists of drink, food and accommodation sales, which are recognised at the point at which goods and services are provided and rental income which is recognised on a straight line basis over the lease term. Revenue for bedroom accommodation is recognised at the point the services are rendered. Loyalty card revenue is immaterial and therefore no change in accounting policy is considered necessary.

2.7 Cost of sales

Costs considered to be directly related to revenue are accounted for as cost of sales. Costs of goods sold are determined on the basis of the cost of purchase, adjusted for movements of inventories. Cost of services rendered is recognised at the time the revenue is recognised.

2.8 Operating profit

Operating profit is revenue less operating costs. Revenue is as detailed above and as shown in note 4. Operating costs are all costs excluding finance costs, costs associated with the disposal of properties and the tax charge.

2.9 Exceptional items

The Group presents as exceptional items those significant items of income and expense which, because of their size, nature and infrequency of the events giving rise to them merit separate presentation to allow Shareholders to understand better the elements of financial performance in the period, so as to facilitate comparison with prior periods to assess trends in financial performance more readily. These items are primarily pre-opening costs (including acquisition costs) and non-recurring costs, which are not expected to recur at a particular site.

2.10 Finance income and expense

Finance income is recognised as interest accrues (using the effective interest method) on funds invested outside the Group. Finance expense includes the cost of borrowing from third parties and is recognised on an effective interest rate basis, resulting from the financial liability being recognised on an amortised cost basis, including commitment fees. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale.

2.11 Taxation and deferred taxation

The income tax expense or income for the period is the tax payable on the current period's taxable income. This is based on the national income tax rate enacted or substantively enacted with any adjustment relating to tax payable in previous years and changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applicable when the asset or liability crystallises based on current tax rates and laws that have been enacted or substantively enacted by the reporting date. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.

A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future reversal of temporary differences can be deducted. The carrying amount of deferred tax assets are reviewed at each reporting date.

2.12 Financial instruments

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs. Subsequent measurement of financial assets and financial liabilities is described below.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement the Group classifies its financial assets into the following categories: those to be measured subsequently at fair value (either through other comprehensive income (FVOCI) or through the income statement (FVPL)) and those to be held at amortised cost.

Classification depends on the business model for managing the financial assets and the contractual terms of the cash flows.

Management determines the classification of financial assets at initial recognition. The Group's policy with regard to financial risk management is set out in note 19. Generally, the Group does not acquire financial assets for the purpose of selling in the short term and does not have any financial assets measured at fair value through the income statement (FVPL) or at fair value through other comprehensive income (FVOCI) in either the current or prior year.

The Group's business model is primarily that of "hold to collect" (where assets are held in order to collect contractual cash flows).

Financial assets held at amortised cost

This classification applies to the Group's trade & other receivables which are held under a hold to collect business model and which have cash flows that meet the solely payments of principal and interest (SPPI) criteria. At initial recognition, trade and other receivables that do not have a significant financing component, are recognised at their transaction price. Other financial assets are initially recognised at fair value plus related transaction costs; they are subsequently measured at amortised cost using the effective interest method. Any gain or loss on derecognition or modification of a financial asset held at amortised cost is recognised in the income statement.

Impairment of financial assets

A forward-looking expected credit loss (ECL) review is required for: debt instruments measured at amortised cost or held at fair value through other comprehensive income; loan commitments and financial guarantees not measured at fair value through profit or loss; lease receivables and trade receivables that give rise to an unconditional right to consideration.

IFRS 9's impairment requirements use more forward-looking information to recognise expected credit losses - the "expected credit loss (ECL) model". This replaces IAS 39's "incurred loss model". The Group's instruments within the scope of the new requirements included trade and other receivables.

Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

As permitted by IFRS 9, the Group applies the "simplified approach" to trade and other receivable balances and the "general approach" to all other financial assets. The simplified approach in accounting for trade and other receivables records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses. The general approach incorporates a review for any significant increase in counterparty credit risk since inception. The ECL reviews include assumptions about the risk of default and expected loss rates.

The nature of the Group's trade and other receivables are such that the expected credit loss is immaterial in the current and prior year, therefore no additional disclosures are considered necessary within the credit risk section of note 19.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and other short term highly liquid deposits with original maturities of three months or less.

Classification and subsequent measurement of financial liabilities

The Group's financial liabilities include trade and certain other payables. Financial liabilities are measured subsequently at amortised cost using the effective interest rate.

Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial period, which are unpaid.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

Classification of Shares as Debt or Equity

When shares are issued, any component that creates a financial liability of the Group is presented as a liability in the statement of financial position; measured initially at fair value net of transaction costs and thereafter at amortised cost until extinguished on conversion or redemption. The corresponding dividends relating to the liability component are charged as interest expense in the Income Statement. The initial fair value of the liability component is determined using a market rate for an equivalent liability without a conversion feature.

The remainder of the proceeds on issue is allocated to the equity component and included in shareholders' equity, net of transaction costs.

The carrying amount of the equity component is not remeasured in subsequent years. The Group's ordinary shares are classified as equity instruments. For the purposes of the disclosures given in note 22, the Group considers its capital to comprise its ordinary share capital, share premium and accumulated retained earnings. There have been no changes to what the Group considers to be capital since the prior year.

Share repurchases

Where shares are repurchased wholly out of the proceeds of a fresh issue of shares made for that purpose, no amount needs to be transferred to a capital redemption reserve as there is no reduction in capital as a result of the purchase and issue of shares.

2.13 Business combinations and goodwill

Other than the group re-organisation that took place prior to Listing, business combinations, which include sites that are operating as a going concern at acquisition and where substantive processes are acquired, are accounted for under IFRS 3 using the purchase method. Any excess of the consideration of the business combination over the interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised in the statement of financial position as goodwill and is not amortised. To the extent that the net fair value of the acquired entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised immediately in the profit or loss.

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. Goodwill is carried at cost less accumulated impairment losses. Refer to Note 11 for a description of impairment testing procedures.

2.14 Property, plant and equipment

Property, plant and equipment, other than freehold land, are stated at cost or deemed cost less accumulated depreciation and any impairment in value. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, with effect from the first full year of ownership, as follows:

Freehold properties To residual value over fifty years straight line

Leasehold properties Straight line over the length of the lease

Fixtures, fittings and equipment Between four and ten years straight line

Computer equipment Between two and five years straight line

No depreciation is charged on freehold land. Where there is no depreciation on historic freehold buildings as a result of a high residual value/long useful lives, the freehold building is subject to an impairment review. Residual values and useful lives are reviewed every year and adjusted if appropriate at each financial period end.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the profit or loss.

2.15 Investments in subsidiaries

The Company recognises its investments in subsidiaries at cost, less any provisions for impairment. Income is recognised from these investments only in relation to distributions receivable basis from post-acquisition profits. Distributions received in excess of post-acquisition profits are deducted from the cost of the investment.

2.16 Impairment of goodwill, property, plant and equipment and investments in subsidiaries

For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of a related business combination and represent the lowest level within the Group at which management monitors goodwill.

Cash-generating units to which goodwill has been allocated (determined by the Group's management as equivalent to its operating segments) are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset's (or cash-generating unit's) carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group's latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect current market assessments of the time value of money and asset-specific risk factors.

Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment loss is reversed if the asset's or cash-generating unit's recoverable amount exceeds its carrying amount.

2.17 Inventories

Inventories are counted independently and stated at the lower of cost and net realisable value. Cost is calculated using the First In First Out method. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs to sell.

2.18 Leasing

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. These are the only types of lease utilised by the entity. Operating lease payments for assets leased from third parties are charged to profit or loss on a straight line basis over the period of the lease, on an accrued basis.

2.19 Share-based employee remuneration

The Company operates equity-settled share-based remuneration plans for its employees. None of the Company's plans are cash-settled.

All goods and services received in exchange for the grant of any share-based payment are measured at their fair values.

Where employees are rewarded using share-based payments, the fair value of employees' services is determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions). The fair value is determined by using the Black-Scholes method.

All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to share-based payments reserve. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest.

Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any adjustment to cumulative share-based compensation resulting from a revision is recognised in the current period. The number of vested options ultimately exercised by holders does not impact the expense recorded in any period.

Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, are allocated to share capital up to the nominal (or par) value of the shares issued with any excess being recorded as share premium.

2.20 Investment in own shares (JSOP)

Shares held in the City Pub Group Joint Share Ownership Plan ("JSOP") are shown as a deduction in arriving at equity funds on consolidation. Assets, liabilities and reserves of the JSOP are included in the statutory headings to which they relate. Purchases and sales of own shares increase or decrease the book value of "Own shares" in the statement of financial position. At each period end the Group assess and recognises the value of "Own shares" held with reference to the expected cash proceeds and accounts for any difference as a reserves transfer.

3 Significant judgements and estimates

The judgements, which are considered to be significant, are as follows:

Judgement is required when determining if an acquisition is a business combination or a purchase of an asset. Each acquisition is assessed individually to determine which is the most appropriate classification.

Judgement is used to determine those items that should be separately disclosed to allow a better understanding of the underlying trading performance of the Group. The judgement includes assessment of whether an item is of a nature that is not consistent with normal trading activities or of a sufficient size or infrequency.

Judgement is required when accounting for hive ups that are operationally enacted and that determines when control has passed. See note 13.

The estimates, which are considered to be significant, are as follows:

The Group determines whether goodwill is impaired on an annual basis and this requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. This involves estimation of future cash flows and choosing a suitable discount rate. Full details are supplied in note 11, together with an analysis of the key assumptions. The impairment of property, plant & equipment also requires an estimate of value in use.

The assessment of fair values for the assets and liabilities recognised in the financial statements on the acquisition of a business and additional consideration, and the date that control is obtained, require significant judgement and estimation. Management assess fair values, particularly for property, plant and equipment, with reference to current market prices. See note 26 for business combinations and property purchases made in the year.

4 Segmental analysis

The Group focuses its internal management reporting predominantly on revenue, adjusted EBITDA (being earnings before exceptional items, share option charge, interest, taxation and depreciation) and operating profit.

The Chief Operating Decision Maker ("CODM") receives information on each pub and each pub is considered to be an individual operating segment. In line with IFRS 8, each operating segment has the same characteristics and therefore the pubs are aggregated to form the reportable segment below.

Revenue, and all the Group's activities, arise wholly from the sale of goods and services within the United Kingdom. All the Group's non-current assets are located in the United Kingdom.

Revenue arises wholly from the sale of goods and services within the United Kingdom.

5 Profit on ordinary activities before taxation

The profit on ordinary activities before taxation is stated after charging/(crediting):

6 Interest payable and similar charges

During the period £275,000 of interest was capitalised (2018: £259,000).

7 Tax charge on profit on ordinary activities

(a) Analysis of tax charge for the period

The tax charge for the Group is based on the profit for the period and represents:

(b) Factors affecting total tax for the period

The tax assessed for the period differs from the standard rate of corporation tax in the United Kingdom 19.00% (2018: 19.00%). The differences are explained as follows:

8 Exceptional items

9 Dividends

Dividends paid during the reporting period

The Board declared a dividend of 2.75p (2018: 2.25p) per 50p Ordinary share for shareholders on the share register as at 31 May 2019, which was approved at the Annual General Meeting and paid on 1 July 2019. The Group received valid elections for the scrip dividend alternative in respect of 8,255,345 ordinary share of 50 pence each, which lead to a total of 103,777 new ordinary shares being allotted by the Company to shareholders who elected to receive the scrip dividend alternative.

Dividends not recognised at the end of the reporting period

Since the year end, the Directors are not proposing a dividend due to the COVID-19 pandemic (2018: 2.75p).

10 Earnings per share

Shares held by the City Pub Group plc Joint Share Ownership Plan ("JSOP"), which has waived its entitlement to receive dividends, are treated as cancelled for the purpose of this calculation.

11 Goodwill

The carrying value of goodwill included within the Group and Company statement of financial position is £4,136,000, which is allocated to the cash-generating unit ("CGU") of groupings of public houses as follows:

The CGU's recoverable amount has been determined as the higher of its fair value less costs to sell and value in use based on an internal discounted cash flow evaluation.

The fair value less costs to sell is calculated based on the market value of the associated property.

For the 52 week period ended 29 December 2019, the cash-generating unit recoverable amount was determined based on value-in-use calculations, using cash flow projections based on one year budgets, extrapolated into perpetuity for freehold properties and for the length of the lease for leasehold properties (with key assumptions for both CGU's being the long-term growth rate of 2% and pre-tax discount rate of 10%. Cash flows for the businesses are based on management forecasts, which are approved by the Board and reflect management's expectations of sales growth, operating costs and margin based on past experience and anticipated changes in the local market places.

Sensitivity to changes in key assumptions: impairment testing is dependent on management's estimates and judgements, in particular in relation to the forecasting of future cash flows, the long-term growth rate and the discount rate applied to the cash flows.

The calculations show that a reasonably possible change in performance, as assessed by the directors, would not cause the carrying amount of the CGU to exceed its recoverable amount.

12 Property, plant and equipment

During the period ended 29 December 2019 the group has made a provision for impairment against a number of sites totalling £1,914,000. The value in use represents a Level 3 fair value measurement, with the assets being held at their recoverable amount of £2,545,000.

During the period ended 30 December 2018 the group has made a provision for impairment against a Pub Site in Cambridge, due to poor performance and it has been reduced to its value in use (using assumptions as outlined in note 11). The value in use represents a Level 3 fair value measurement, with the asset being held at its recoverable amount of £340,000. In addition, the group has made a provision for impairment against the Grapes in Oxford, which was written down to its recoverable amount, with its disposal completed on 25th February 2019.

During the period ended 29 December 2019 the group capitalised £275,000 (2018: £259,010) of interest within the Freehold & Leasehold property asset.

13 Investments in subsidiaries

During the year the Company acquired 100% of the share capital of BNB Leisure Limited and Gresham Collective Limited as part of Pub acquisitions - see note 26.

During the year the group liquidated one subsidiary held by the Company at the beginning of the year, being The Inn On The Beach Limited.

During the year the Company hived up the trade and assets of its subsidiary The City Pub Company (West) Limited via an intercompany transfer, which included the transfer of investments previously held by The City Pub Company (West) Limited.

The Company had the following subsidiary undertakings as at 29 December 2019:

The above companies all had the same registered office as the parent company, being Essel House, 2nd Floor, 29 Foley Street, London,W1W 7TH.

14 Inventories

15 Trade and other receivables

16 Current trade and other payables

17 Non-current other payables

Deferred consideration has arisen in relation to the acquisition of both The Hoste and The Pride of Paddington, see note 26, of this deferred consideration £50,000 was due after more than one year and £375,000 was due within one year and included within other payables as at 29 December 2019 (2018: £310,000 of deferred consideration included within current other payables in relation to the Old Fire House).

18 Borrowings and financial liabilities

At 29 December 2019 a revolving credit facility of £32,500,000 (2018: £11,600,000) was outstanding, net of capitalised arrangement fees, Barclays Bank PLC had a fixed charge over certain freehold property as security in respect of this loan. Interest was charged at LIBOR plus a margin, which varied dependent on the ratio of net debt to EBITDA. The revolving credit facility is repayable in July 2022, but can be extended for an additional 2 years.

Reconciliation of liabilities arising from financing activities

The changes in the Group's liabilities arising from financing activities can be classified as follows:

The short-term borrowings brought forward comprised the accrued dividend on Convertible Preference Shares, paid in January 2018.

The changes in the Company's liabilities arising from financing activities can be classified as follows:

The short-term borrowings brought forward comprised the accrued dividend on Convertible Preference Shares, paid in January 2018.

19 Financial instruments and risk management

Financial instruments by category:

Prepayments are excluded, as this analysis is required only for financial instruments.

Statutory liabilities and deferred income are excluded from the trade payables balance, as this analysis is required only for financial instruments.

There is no material difference between the book value and the fair value of the financial assets and financial liabilities disclosed above.

The Group's operations expose it to financial risks that include market risk and liquidity risk. The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous periods.

A1 rating means that the risk of default for the investors and the policy holder is deemed to be very low.

Not rated balances relate to petty cash amounts.

Market risk - cash flow interest rate risk

The Group had outstanding borrowing of £32,500,000 at year end as disclosed in note 18. These were loans taken out with Barclays to facilitate the purchase of additional public houses.

The Group's policy is to minimise interest rate cash flow risk exposures on long-term financing. Longer-term borrowings are therefore usually at fixed rates. At 29 December 2019, the Group is exposed to changes in market interest rates through bank borrowings at variable interest rates. Other borrowings are at fixed interest rates. The exposure to interest rates for the Group's cash at bank and short-term deposits is considered immaterial.

The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of +/- 1% on borrowings in the period. These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate on borrowings for each period. All other variables are held constant.

Credit risk

The risk of financial loss due to a counter party's failure to honour its obligations arises principally in relation to transactions where the Group provides goods and services on deferred payment terms and deposits surplus cash.

Group policies are aimed at minimising losses and deferred terms are only granted to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures. Individual customers are subject to credit limits to control debt exposure. Credit insurance is taken out where appropriate for wholesale customers and goods may also be sold on a cash with order basis.

Cash deposits with financial institutions for short periods are only permitted with financial institutions approved by the Board. There are no significant concentrations of credit risk within the Group. The maximum credit risk exposure relating to financial assets is represented by their carrying value as at the financial period end.

Liquidity risk

The Group actively maintains cash and banking facilities that are designed to ensure it has sufficient available funds for operations and planned expansions. The table below analyses the Group's financial liabilities into relevant maturity groupings based on the remaining period at the period end date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Capital risk management

The Group manages its capital to ensure it will be able to continue as a going concern while maximising the return to shareholders through optimising the debt and equity balance.

The Group monitors cash balances and prepare regular forecasts, which are reviewed by the board. In order to maintain or adjust the capital structure, the Group may, in the future, return capital to shareholders, issue new shares or sell assets to reduce debt.

20 Fair value measurements of financial instruments

Financial assets and financial liabilities measured at fair value are required to be grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3: unobservable inputs for the asset or liability.

There were no financial asset or liabilities measured at fair value as at 31 December 2017, 30 December 2018 or 29 December 2019.

21 Deferred tax

22 Share capital

During the year, between the 30 May 2019 and 8 October 2019, the Company issued a total of 217,500 new shares to satisfy the exercise of share options. The 217,500 new ordinary shares of 50 pence per share all related to options that had an exercise price of 100.0 pence per share, with the excess over nominal value credited to the share premium account.

On 1 July 2019 103,777 new ordinary shares of 50 pence per share were issued as part of the scrip dividend alternative, with an issue price of 218.7 pence per share, with the premium credited to the share premium account.

The ordinary shareholders are entitled to be paid a dividend out of any surplus profits and to participate in surplus assets on winding up in proportion to the nominal value of each class of share. All equity shares in the Company carry one vote per share.

The ordinary share capital account represents the amount subscribed for shares at nominal value.

Own shares held (JSOP)

The Group announced the establishment of a Joint Share Ownership Plan ("JSOP") in January 2018, as detailed in the Company's AIM Admission Document, to be used as part of the remuneration arrangements for employees. This resulted in the purchase of the Group's own shares and the creation of an Employee Benefit Trust.

The JSOP purchases shares in the Company to satisfy the Company's obligations under its JSOP performance share plan. No shares (2018: 1,925,000) in the Company were purchased during the period at a cost of £nil (2018: £3,272,500).

At 29 December 2019 the JSOP held 1,925,000 ordinary shares in The City Pub Group plc (2018: 1,925,000).

At 29 December 2019 awards over 1,925,000 (2018: 1,925,000) ordinary shares The City Pub Group plc, made under the terms of the performance share plan, were outstanding.

Nature and purpose of reserves

The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

Own shares (JSOP) represents shares in the Company purchased by the Group's Employee Benefit Trust as part of a Joint Share Ownership Plan ("JSOP").

Convertible Preference Shares represents the element of the financial instruments treated as equity.

The other reserve has arisen from using the predecessor value method to combine the results of the Company and its subsidiary The City Pub Company (West) Limited, which was acquired through a share for share exchange as part of the reorganisation of two entities under common control prior to the Company's Listing on AIM. The reserve represents the share premium that exists within The City Pub Company (West) Limited.

Share-based payments reserve is used to recognise the grant date fair value of options issued to employees but not exercised.

Retained earnings include all results as disclosed in the statement of comprehensive income.

23 Staff costs

Number of employees

The average monthly numbers of employees (including salaried Directors) during the period was:

Employment costs (including Directors)

24 Directors' remuneration

Single total figure of remuneration table

The following table shows a breakdown of the remuneration of individual Directors who served in all or part of the year:

Emoluments in respect of the Directors are as follows:

The highest paid Director in the period received remuneration of £173,000; (2018: £184,000). Four directors had equity settled share options in issue at the period end (2018: Four). Additional information on Directors' remuneration is given within the Corporate Governance Report.

25 Share-based payments

The Group provides share-based payments to employees in the form of a Company Share Ownership Plan (CSOP), started in 2016, and a Joint Share Ownership Plan ("JSOP") started in 2018. The Company uses the Black-Scholes valuation model to value both types of share-based payment plan and the resulting value is amortised through the consolidated income statement over the vesting period of the share-based payments.

In prior periods the Group also operated an equity settled share option plan known as the Enterprise Management Incentive Share Option Plan. The Group was required to reflect the effects of share-based payment transactions in profit or loss and in its statement of financial position. For the purposes of calculating the fair value of share options granted, the Black Scholes Pricing Model was used by the Group. Fair values have been calculated on the date of grant. A key input into the model is the share price, on the date of grant of the options. The share price has been estimated based on the most recent subscription for shares. In the prior period a transfer was made between the share-based payment reserve and the retained earnings in respect of the EMI share options that were all exercised during the prior period.

During the period ended 29 December 2019 no options were granted under the CSOP scheme (2018: 922,500) and no awards were made under the JSOP scheme (2018: 1,925,000). A share-based payment charge of £274,000 (2018: £377,000) has been reflected in the consolidated statement of comprehensive income.

Movements in share-based payments are summarised in the table below:

The weighted average remaining contractual life of options outstanding at the end of the period is 3.58 years (2018: 4.98 years).

26 Business combinations

During the period the Group acquired two new sites through business combinations, the fair values of the assets and liabilities acquired, and the nature of the consideration, are outlined within the table below. The Group has included additional disclosure of the significant acquisitions that were included within the current year business combinations.

All of the above acquisitions were part of the Group's continuing strategy to expand its pub portfolio via selective quality acquisitions. Material acquisitions are disclosed below.