City Pub Group has announced its intention to make an offer for the shares it doesn't own in Mosaic Pubs by the middle of 2023 and consolidate the estate with its own.
In March, the business announced the disposal of six sites predominantly on the south coast for approximately £17m. The board felt that this money could be reinvested into higher growth assets and used to increase its stake in the 10-strong Mosaic Pubs portfolio.
The company recently increased its stake in Mosaic from 25% to 36% for around £4.1m and said the estate would "complement our existing pub estate and will help drive further growth in 2023".
Meanwhile, City Pub Group said trading over the last nine weeks was 98% of 2019 and the business was confident that trade will exceed 2019 levels by the end of the second quarter.
The 41-strong group released its audited results for the 52 weeks ended 26 December 2021 today, in which it reported a 37% increase in revenue to £35.4m; pre-tax profit of £1m, compared to a £5.1m loss in 2020; and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £3.8m.
Despite soaring energy, food price, labour and building costs, the group said it was "inappropriate and counterproductive" to keep increasing prices "anti-competitively", and therefore margins will be impacted in the short term.
Clive Watson, chairman of City Pub Group said: "Following the reversal over the festive season, trading is now beginning to build in momentum and we look forward to an uninterrupted summers' trading. We are emerging from the pandemic in the strongest financial position that we have ever been in and therefore have signalled our intention to recommence dividends in the autumn.
"We have a very strong platform from which to grow and much to look forward to despite the inflationary headwinds our development sites are coming on stream, Mosaic will be fully acquired next year adding 10 high-quality pubs, our new concept will begin trading and we can take full advantage of, adhering to our strict criteria, freehold acquisition opportunities that arise."
Following the disposal of the six pubs in March, the company had current net debt of around £2m and £35m banking facilities.
Pictured: City Pub Group's Chapel 1877, Cardiff (https://www.facebook.com/Chapel1877RestaurantAndBarCardiff/photos)