London's economy boosts Capital Pub Company

Despite fears of a downturn in consumer spending nationally, London's 'micro economy' helped boost Capital Pub Company's (CPC) trading in recent months, the group said today.

CPC's chief executive David Bruce said the managed pubco was "lucky to be in the micro economy that is London. We've seen no evidence of a consumer downturn nor, with our pubs' outside facilities, any problems relating to the smoking ban".

He was speaking as the AIM-listed pub operator announced that turnover for the six months to September 29 had grown 36 per cent to £9.2m, with pre-tax profits, excluding profits on disposals, rose 19 per cent to £970,000.

Underlying earnings per share grew 11 per cent to 3.65p, while the interim dividend rose five per cent to 1.05p.

Acquisitions and "improved performance in the existing estate" were behind the figures, Bruce said.

On current trading Bruce said: "In spite of the poor weather, our national football team's recent performances and the smoking ban we've seen no declines in either our food or drink volumes."

CPC acquired four freehold pubs during the period for a total cost of £10.1m, plus it exchanged contracts on another freehold site for £2.2m.

It also recently exchanged contracts with Broken Foot Inns on a leasehold site in Kingston-upon-Thames, the Boaters Inns, for £450,000, which it expected to refurbish at a cost of £200,000.

"There's a possibility we can persuade Kingston Borough Council to sell us the freehold [of the Boaters] one day," Bruce said.

He said the group expected the pub to generate net sales of £200,000 per annum, giving a return on capital of around 30 per cent.

CPC aimed to double the size of its current 27-stong estate "in the medium term", he added.