City Pub to scale back expansion amid Brexit uncertainty
The City Pub Group posted a rise in interim profits on Thursday as it said it would scale back its expansion plans amid Brexit uncertainty.
In the 26 weeks to the end of June, adjusted pre-tax profit rose 19% to £1.9m on revenue of £27.1m up 36%. Like-for-like sales increased 2.6% on the year and adjusted earnings before interest, tax, depreciation and amortisation were 20% higher at £3.6m.
Executive chairman Clive Watson said: "Our targeted expansion of high-quality larger pubs with letting rooms has delivered strong progress for the group in the first half. In the face of robust comparatives, we have delivered good like-for-like growth too. As our development sites begin trading during 2020, they will drive our performance onward. Our momentum has continued into the second half with strong sales growth."
The company, which opened four pubs this year, said it would be taking a more prudent and selective approach to acquisitions amid political and economic uncertainty.
"We cannot ignore the uncertainty in the market due primarily to Brexit and the potential impact of a no seal. We are a management team that is focused on the long-term and as such we believe it is prudent for us to rein in our expansion programme until there is more certainty," Watson said.
Instead, the group will focus on getting its development sites trading, developing its existing estate, reducing debt and improving dividends for shareholders.
"This will further strengthen our position and minimise the impact of any headwinds whilst continuing to deliver significant growth into the future," Watson said.
At 1300 BST, the shares were down 10% at 195p.