City Pub Group warns on profits

City Pub Group warned on profits on Monday as it said the Rugby World Cup did not provide the boost expected, while the weather and political uncertainty also dented sales.

In an update for the year to 29 December, the company said total turnover rose 31% on the previous year to £59.8m, with like-for-like sales up 1.7%. However, a number of "one-off factors" in the latter part of the fourth quarter subdued trading over the important festive period, it said.

City Pub said the Rugby World Cup did not have the impact it expected, while political uncertainty culminating in the December Election held back sales until the result was known. It also pointed to "unhelpful" weather in November and December and disruptions on South West trains in December, which weighed on its London Estate.

The company also said that delayed refurbishments at its two Jam Tree sites led to lost Christmas bookings.

As a result, adjusted earnings before interest, tax, depreciation and amortisation for the year are now expected to be "slightly below" market expectations at between £9.1m and £9.2m, which is down about 15% on the year.

The company also noted that the 2018 festive season was very strong, with like-for-like sales of 7%, meaning that comparatives were strong. Like for like sales over the six-week period ending 5 January 2020 were marginally ahead of the previous year, it said.

At 0940 GMT, the shares were down 8% at 200p.

Russ Mould, investment director at AJ Bell, said: "Today’s profit warning reads like an attempt to play excuse bingo.

"The ultimate result, and what shareholders will really care about, is that 2019 earnings will fall short of expectations, albeit only by a bit.

"Double-digit increases in sales and profit reflect the expansion of the company’s estate, but on a like-for-like basis growth was significantly more modest.

"City Pub is pitched at the higher end of the market and if people are feeling a bit nervous about their money, they might be less likely to frequent somewhere they have to pay up for premium-priced drinks."