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Tue 9th Apr 2019 - The City Pub Group buys Hoste Arms, Burnham Market for £8.65m
The City Pub Group buys Hoste Arms, Burnham Market for £8.65m: The City Pub Group has exchanged contracts on the iconic Hoste Arms in Burnham Market for £8.65m – completion is the end of this month. The company stated: “(It is) a 53 bedroom site with spa, cinema and gym was last year named in the top ten country hotels in the UK by the Guardian. This will be the largest number of bedrooms in any City Pub Group outlet. It is a prominent and popular location only a 45 minute drive from Norwich where the business’ operates the Georgian Town House which currently has 22 bedrooms and is due to open another ten in 2019. These two sites should complement each other in terms of marketing, suppliers, staff and other operational activity. This site will be acquired for a cash consideration of £8.65m at the end of April 2019 plus further additional significant consideration subject to a sales performance incentive over the next two month period. The site generated an Ebitda of approximately £0.7m for the year ended April 2018.” The company reported sales rose 22% to £45.7m in the 52 weeks ended 30 December 2018, with like-for-like sales growth of 1.6%. Adjusted profit before tax was up 60% to £5.1m. The company, which operates a predominately freehold estate of 44 wet-led pubs, has four further sites are currently in development and two exchanged sites are due to complete imminently, which will bring the size of the total estate to 50. Total dividend is up 22% to 2.75p (2017: 2.25p). The company opened 11 pubs in 2018 and is on track for an estate of 65-70 pubs by mid-2021. The company stated: “To incentivise, retain and recruit staff, the group’s innovative profit share scheme will now to be paid on a weekly, rather than annual basis, for all non-managerial team members. The four development sites acquired previously will come on stream in 2019 and two additional sites are in the purchase process. These new openings are large, high quality, pubs which will help drive the group’s growth. (We are) well-funded for further expansion and to take advantage of softening pub values. £6.2m of new equity raised in October 2018. Low gearing brings flexibility and the ability to act quickly when opportunities arise.” Clive Watson, executive chairman of The City Pub Group, said: “Our strategic expansion has continued at pace with the opening of eleven new pubs in 2018 bringing the total to 44. Our performance has been driven by both organic growth and the new pubs coming on stream. Considering the continued strong performance we are delighted to increase our dividend, by 22% for shareholders. We continue to seek new sites to add to our portfolio and we have already earmarked six new pub openings for this year and are on course to meet our target of doubling the size of the estate to around 65-70 pubs by mid-2021. We believe the combination of further acquisitions, fine tuning the management of our existing estate and the benefits of our new divisional structure will enhance our performance further. We are positioned to meet the number of well-trailed headwinds, not least the challenges brought through Brexit, and to take advantage of the softening market for acquisitions with our robust balance sheet and strong cash generation.” Watson added: “The group began 2018 with 33 trading pubs and four development sites. With 11 openings during the year, another acquisition and a single disposal post year end, we now own and operate 44 pubs with a further four sites in development. In addition, since the year end the number of bedrooms, an area of opportunity delivering incremental and high margin income, has risen to 66 and as our development sites open we anticipate operating over 150 rooms by the end of 2019. Recently, contracts have been exchanged on two further freehold pubs which are expected to complete in April 2019 and add to our growing portfolio in Bath and expand our presence into Norfolk. Once the two exchanged sites have completed, the group will comprise 50 sites. Our pub clusters enable us to gain exceptional local expertise and retain staff by providing improved career prospects and additional focus on operational performance. Our pubs are largely located in cathedral cities and we now have 20 trading sites in London, three in Brighton, nine in Cambridge and other clusters in cities such as Bristol, Winchester, Exeter and Oxford. We will seek to acquire pubs in those areas where we are already trading, as well as identifying additional cathedral cities across the southern half of England where we can build our presence. We are also evaluating expanding our geographical footprint to cities located further north. With an estate which will shortly comprise 50 pubs, the future focus is to acquire and develop larger pubs in or close to prominent cities and by mid-2021 we target an estate of 65-70 pubs.” 

Comptoir Group reports revenue growth: Comptoir Group has reported group revenue increased 16.1% to £34.3m (2017 – £29.6m) in the year to 31 December 2018. Gross profit increased 16.0% to £24.7m (2017 – £21.3m). IFRS loss before tax was £0.21m (2017 – £0.46m profit). Three new restaurants, two ‘owned’ and one franchised opened in the year (2017 – four ‘owned’ restaurant openings). One ‘pop up’ site closed at the end of a short-term lease. 31 restaurants (27 owned and four franchise) were trading as at 31 December 2018 (2017 – 29 restaurants; 26 owned and three franchise). Chaker Hanna, chief executive, said: “Trading for the year to date has continued to be in line with board expectations, and we anticipate this momentum will continue into the second quarter of 2019. Like for like sales growth has continued each month as newer restaurants reach anticipated maturity levels and the company is continuing to take a cautious approach to selecting new site openings, enabling focus on the existing estate and further development of the brand whilst ensuring the most efficient operating model is maintained. The directors believe the group’s current Comptoir Libanais restaurant estate continues to have significant potential for organic growth and will continue to explore further franchise opportunities, alongside the already agreed terms reported at the half-year results to open three additional franchised sites with HMS Host in the second half of 2019; in Ashford (Kent) and our second and third international franchised operations in Dubai and Abu Dhabi Airports.” Hanna added: “During the year, we opened two new Comptoir Libanais restaurants; Birmingham located in Grand Central (March 2018) and London Bridge (November 2018) located in a prime redevelopment of this key central mainline train station, adjacent to an entrance into the station concourse. Both of these new site locations benefit from high city footfall. We are also pleased to report an addition to our franchise sites with a new site opening in Cheshire Oaks (November 2018), operated by HMS Host. In 2018 we took the opportunity to invest in refurbishing some of our existing matured restaurants to give a fresh look and innovation with new designs. This included refurbishment of Yalla Yalla Soho, South Kensington and the extension of the trading area in our Yalla Yalla Winsley Street site into an adjoining space, with a resulting significant increase in available covers at the restaurant. During 2019 we will continue to selectively invest on a return focused basis, in our sites, with six sites earmarked for some capital investment over the year. These sites are Levant, Kenza, Chelsea, Stratford, Kingston and Wigmore Street. In addition to this, following the closure of our Comptoir site in Westfield, Shepherd’s Bush in January 2019 due to the extensive redevelopment of the centre, we are excited to announce that we will be opening a brand new re-positioned Comptoir site on completion of the centre’s development works in May 2019. In line with our approach in 2018, we continue to develop our property pipeline with some caution. One further owned site is currently planned to open in 2019. As reported at the half-year, we continue to work closely with our franchise partners and have already agreed terms to open three additional franchised sites with HMS Host in the second half of 2019; in Ashford (Kent) and our second and third international franchised operations in Dubai and Abu Dhabi Airports.”

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