TIDMCPC
RNS Number : 8339M
City Pub Group PLC (The)
26 January 2021
City Pub Group PLC
( "City Pub group" or "the Group")
Trading Statement
Positioned to emerge strongly
The City Pub Group, the owner and operator of 48 premium pubs
across Southern England and Wales and a further 4 development
sites, announces its year end update for the 52-week period to 27
December 2020.
-- Actions to enhance and improve the business during the
pandemic will enable the Group to rapidly take advantage of pent-up
consumer demand and opportunities that will undoubtedly emerge
-- Management team enhanced with the appointment of Toby Smith as Chief Operating Officer
-- Cash burn reduced to c.GBP300k per month (excluding all
Government grants, with the exception of furlough)
-- Reorganisation of supplier base and streamlined retail offer
completed and ready for reopening
-- Ample liquidity into 2022 with GBP5m of further liquidity
credit approved from the Group's bankers under CLBILS
-- Rapid return to cash generation and profitability expected
upon reopening, driven by enhanced operational model
-- Establishment of new ESG committee and commitment to
strengthen independence and diversity of the board
The Group generated revenue of GBP25.7m in 2020, compared to
GBP60.0m in 2019, representing a 57% decrease. The reduction was a
result of the closures and restrictions on our pub estate for large
parts of 2020.
Following the most recent lockdown, the primary priorities have
been to ensure that cash burn was reduced to the minimum and that
the Group is well positioned to emerge strongly once restrictions
are lifted. The Board has been focused on the following key
areas:
-- Staff costs - With the exception of 8 employees, all staff are furloughed.
-- Directors - Having sacrificed 50% of their salary between
March and June, and 25% between July and October, the directors are
deferring 25% of their salary from 1 January 2021 until the pubs
reopen. This deferral will only be paid once the Group is
generating consistent levels of positive cashflow.
-- Other costs - Whether in head office or at our venues,
virtually all costs have now been reduced and many contracts,
including lockdown clauses, have been renegotiated for the
long-term. This exercise will significantly lower the Group's cost
base when the pubs finally reopen.
-- Capex - Capex has been effectively suspended, except for
minor essential remedial works and a GBP300k upgrade at The Hoste
Arms, North Norfolk, to increase the trading area on the ground
floor and enhance 10 remaining hotel bedrooms. The Hoste Arms
performed exceptionally well over the summer and autumn periods and
it is important that we improve and invest in the Group's strongest
and most valuable assets where appropriate.
-- Landlords - Considerable progress has been made with our
landlords and, on the whole, they have been willing to reach
sensible compromises. In a number of cases we now have minimal
rents in the event of a continued lockdown and have negotiated rent
concessions across a large number of our leasehold properties. T he
Group will continue to consider whether it should permanently
surrender its liabilities on certain leases.
-- Insurance - The ruling by the Supreme Court regarding
Covid-19 insurance claims for those in the hospitality sector is
welcomed by the Board. The process for pursuing claims under our
policy has been initiated and the Board will update shareholders
with progress once settlement has been reached.
The Board would like to record how encouraging it has been that
the Group has had the support of key stakeholders such as suppliers
and landlords in order to reach sensible compromises. The above
measures have significantly reduced the Group's cash burn which is
currently running at c. GBP300k per month, excluding all Government
grants with the exception of furlough, which will further reduce
the cash burn.
In March 2020, the Group raised GBP22m of gross proceeds from an
equity fundraise. Of this amount, GBP10m was utilised to reduce
bank borrowings and the remainder remains on deposit to help
maintain liquidity which is sufficient, if necessary, to last well
into 2022. Current net debt is GBP14m. The Group has also
negotiated a further GBP5m government-backed loan. This will
provide further liquidity and enable the Group to be on an even
stronger financial footing when pubs are permitted to reopen.
The Group strengthened its management team towards the end of
2020 with the appointment of Toby Smith as Chief Operating Officer.
This will result in continued focus on improving operational
performance.
Throughout last year, the supply chain and retail offer were
streamlined and the future focus is to optimise the capacity of the
existing pub estate. The Board is confident that this will be
achieved quickly when pubs reopen. Beyond this, it remains the
Group's long-term commitment to expand the estate and further
enhance its premium position. The Executive team have vast industry
experience, are committed to the long-term ambitions of the Group
and determined to return to generating increasing levels of Group
EBITDA.
The Board is also pleased to announce that it has established a
new committee, which will oversee the Group's ESG policy. Clive
Watson, Executive Chairman, will Chair this committee and progress
in this area will be outlined in the Company's annual report for
the year ended 27 December 2020.
The Group is also actively looking to strengthen the
independence and diversity of its Board. An announcement in this
regard is expected to be made no later than the publication of the
Group's annual results.
Clive Watson, Chairman of City Pub Group said:
"2020 has been a very challenging year, but decisions made since
March 2020 with regards to the fundraising, cost control,
streamlining of the business, and strengthening of the Board has
resulted in a very strong balance sheet, good levels of liquidity,
a strengthening of our business model, a more focussed proposition
and most importantly, pure determination to go out there and do the
business once the pubs reopen. We have the right people in the key
roles, whether in the pubs or head office and a fantastic estate to
trade from. I look forward to a time when I can announce to
shareholders that we are on the acquisition trail again, but this
will only be considered once we are hitting high levels of
optimisation from our existing capacity."
26 January 2021
The information contained within this Announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No.596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019.
Enquiries:
City Pub Group
Clive Watson, Chairman
Tarquin Williams, CFO
Instinctif Partners
Matthew Smallwood
Jack Devoy +44 (0) 20 7457 2020
Liberum (Nomad & Broker)
Chris Clarke
Edward Thomas
Clayton Bush +44 (0) 20 3100 2000
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTDZGZMLKVGMZM
(END) Dow Jones Newswires
January 26, 2021 02:00 ET (07:00 GMT)
City Pub (LSE:CPC)
Historical Stock Chart
From Apr 2024 to May 2024
City Pub (LSE:CPC)
Historical Stock Chart
From May 2023 to May 2024