Speaking to The Morning Advertiser (MA) after the release of City Pub Group’s 2020 financial results statement – which saw pandemic restrictions hit its revenue to the tune of £34.2m in the 52 weeks ended 27 December 2020 – executive chairman Clive Watson described the confirmation of indoor pub reopening on 17 May as a “relief” but “no great surprise”.
“I think people in this country are on the whole very compliant, so I think it will give them confidence, now they know they can go indoors, to start heading back towards the pub,” Watson told The MA. “So, I think that's good news as well.”
“I think it means that you can now plan ahead for June 21 for those bigger group bookings,” he continued, explaining that the 45 City Pub Group sites due to fully reopen over the coming weeks have already been given a post-lockdown shot in the arm from healthy forward booking numbers.
“Historically that's been a significant part of our business,” Watson adds, “those parties of 20, 30, 40 people, and now I think there'll be more confidence for people to book those types of events in pubs.”
While Watson was fully confident that his staff would deliver amid the most challenging of circumstances – “because they did when we reopened last time” – he adds that he’s been somewhat taken aback by the resilience of pub goers.
“There have been some pretty chilly nights,” he says. “I've looked at some of the figures thinking, ‘really?’ the weather was pretty cold – ‘where's that come from?’
“I think there is what I call ‘cold fatigue’ from customers. I think there are only so many nights people can go out when it's pretty cold, damp and miserable. But now the people are going to be allowed inside, they’ve now got the choice and I think that's going to be really helpful.”
‘Getting the basics right’
In addition to raising £15m from the successful placing of 30,000,000 new ordinary shares on 27 March 2020, City Pub Group worked behind closed doors during lockdown and claims to have “significantly improved” over the past year, and that it now has the platform in place to expand its estate to over 100 sites.
“I think now, we've really worked hard at getting the basics right at head office – making sure that the business is as easy to run as possible, that a lot of the complexity has been taken out,” Watson explains.
“We were running 45 different menus, now we run two menus. Taking a lot of the complexity out of the business has made it much easier, not only running the existing business, but to now bolt on new businesses and assimilate those businesses as quickly as possible.
“Now when we have a call on a Monday morning, the information is all there, we know which direction we want to go. It's much more much better structured, and because we’ve got a strong balance sheet, and a better structured business, that allows us to have ambition to move forward.”
‘Change in emphasis’
The operator – which recently acquired a 49% stake in the Kensington Park Hotel and increased shareholding in Mosaic Pub and Dining Group to 24% – also registered a £5.1m loss compared to a £5.3m profit in 2019.
Following its deal with Mosaic, Watson established that City Pub Group would “continue to look at selective, high quality single pub acquisitions”.
However, against a backdrop of increased investment from the likes of Rooney Anand-led, American-backed RedCat and a flurry of merger and acquisition activity – most recently involving Nightcap’s purchase of Adventure Bar – what does a “high quality” look like to the 45-site Group?
“I think historically, we've gone into the great cities of southern England and Wales, and we've got some great pubs there,” he tells The MA.
“But I think we'll probably vary that to go to large market towns in southern England and Wales – which are still close to London, or Cambridge, or wherever – but won’t necessarily have a cathedral within a mile or have a large university campus.”
As part of this, Watson acknowledges that there has been a “slight change in emphasis” of the sort of customers the Group are looking to target.
“It's not just overseas tourists, students and office workers, it's probably going back more to having a great local pub in a more residential area,” Watson adds. “I think that's the change.
“Having said that, we'll still happy with those places in the heart of Bristol, Exeter or wherever, but not exclusively that. That will also allow us to grow quicker because our target areas have expanded.”
