When City Pub Group (CPC) went public in November last year, executive chairman Clive Watson said that the company would double the size of its estate, then made up of 33 pubs, by 2021. Mr Watson says that the group is ahead of schedule on meeting that goal, and now expects to achieve it 12 months early, by mid-2020. The company is expanding outside its London and Southeast roots. Mr Watson said he’d consider any cathedral city with a vibrant business community and a university.
New openings helped to push up both group sales and cash profits by around a quarter, though the flip side is increased depreciation charges and financing commitments, with further expansion funded through a combination of internal cash flow and debt. Mr Watson said the group is in the process of renegotiating its debt facilities, hoping to increase it by £10m to £40m, though so far only £14m has been used. The leverage ratio of net debt to cash profits is around two times, which Mr Watson said is a reasonable ratio considering the group’s asset backed, freehold estate.
Analysts at Liberum expect pre-tax profits of £5.4m during 2018, giving EPS of 7.9p, compared to £3.2m and 2.9p in 2017.
| CITY PUB GROUP (CPC) | ||||
| ORD PRICE: | 236p | MARKET VALUE: | £ 134m | |
| TOUCH: | 232-240p | 12-MONTH HIGH: | 253p | LOW: 160p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | NA | |
| NET ASSET VALUE: | 125p | NET DEBT: | 10% | |
| Half-year to 01 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 16.1 | -0.08 | -0.2 | nil |
| 2018 | 20.0 | 0.93 | 1.3 | nil |
| % change | +24 | - | - | - |
| Ex-div: | na | |||
| Payment: | na |
