City Pub Group trading hits pre-Covid levels in H1

City Pub Group has announced that trading volumes have returned to pre-pandemic levels in the first half of the year and remain stable despite a “very challenging” environment.

In the six months to 26 June, 2022, trading was on an upward trajectory, with revenues of £26.1m, up from £8.9m the year prior. Meanwhile, profit before tax was £1.3m, up from a loss of £2m in H1 2021. 

Since the last statement in June, the business said it has strengthened its financial position, but despite trade rebounding, it has faced a “rising cost burden”. 

It noted that net debt is “very low”, delivering one of the lowest levels of gearing in the sector, which will allow it to “take advantage of the opportunities that will arise from these most challenging times, when appropriate”.

In the meantime, it said further efficiencies have helped to mitigate inflationary and other cost pressures, adding that it is “well placed with a strong platform from which to develop and grow in due course”.

Looking ahead, trading across the summer since the half year end has remained positive. City Pub Group added that following the government’s announcement of the Energy Price Cap, it anticipates that trading will remain “resilient” for the rest of the year.

In the face of current macroeconomic challenges, the group’s focus is currently on the existing estate, albeit with intention to purchase further shares in the Mosaic Pub and Dining Group (currently have a 37% stake) to give control in 2023.

Clive Watson, chairman of City Pub Group said: Trading volumes, as anticipated, have returned to pre Covid levels and are holding up in a very challenging cost environment. Inflation continues to impact our business.

“The disposal of six pubs in April for £17m has put the company in an even stronger position with very low net debt and what we believe is amongst the lowest gearing in the sector, however we continue to urge the Government to do more for hospitality particularly on business rates and providing 2-3 year visas to alleviate the labour shortages.”

He added: “City Pub Group is a dynamic business which benefits from having a wonderful estate of high-quality freehold pubs. From our position of strength, we will adopt an entrepreneurial approach to retailing and embrace technology. We will continue to run our existing business ever more efficiently, our current focus, before turning our attention to building the company by acquisition when the time is right.”