The City Pub Group has warned that its earnings will come in slightly below expectations after a series of “one-off factors” dented its profitability.
The owner and operator of 47 premium pubs across Southern England and Wales, revealed that for the 52-week period ending 29 December 2019 turnover was up 31% to £59.8m, with like-for-like sales also up by 1.7%.
However, it said a number of one-off factors combined in the latter part of Q4 “subdued” trading over the important festive period. The group explained that The Rugby World Cup “did not have the impact” it expected and “political uncertainty” culminating in the election held back sales until the result was known.
It added that “unhelpful weather” during November and December and disruptions on South West trains throughout December due to industrial action also impacted sales, especially at its London estate.
The City Pub Group now anticipates adjusted EBITDA to come in slightly below market expectations of £9.7m-£9.9m at around £9.1m-£9.2m.
A statement in the update read: “The group has a strong business model that is quick to respond to the more normal trading conditions now prevailing. Efforts to refocus on operating margins are already underway and this year’s performance should see the benefits of this. In addition, there are two underperforming sites that have been earmarked and actively marketed for disposal.
“In 2020, the company will benefit from a full years’ trading from the pubs opened in 2019 such as Aragon House, Parsons Green, which has been the most successful pub the Company has ever opened, the Hoste, Burnham Market, the Market House, Reading, and the Pride of Paddington. There are also 3 large sites in development, which will open later in the year; Turks Head, Exeter, Cambridge and the former Nest site, Bath – September 2020.”
It added: “The group is focussed on completing these development sites for trading and maximising the profitability of the existing estate and, as previously announced, will take a prudent and selective approach to acquisitions. We remain confident in delivering continued growth and performance in 2020 and beyond.”