City Pub trades profitably as pubs reopen after COVID-19 restrictions

According to City Pub Group (LON: CPC), early signs of recovery in trading were evident in the three weeks after the British government allowed businesses to resume operations. On a year over year basis, however, it said that its revenue was still down by 37% versus the comparable period of last year. Ryanair also said on Monday that its revenue tanked 95% in Q1.

Shares of the company opened more than 3% up on Monday and jumped another 1% on market open. At 70 pence per share, City Pub Group is currently 65% down year to date in the stock market after recovering from an even lower 45 pence per share in March.

City Pub has reopened 32 of its pubs

Since the 4^th of July, the company that operates a total of 48 pubs in the United Kingdom has reopened 32 of these for the public. In the past three weeks, City Pub said it returned to profit posting total sales of £1.8 million.

The British pub operator said that the rest of its pubs will be reopened in the upcoming two months. The process, it added, could be faster if COVID-19 restrictions are lifted any sooner.

City Pub attributed its profit to operational efficiencies and significant costs reductions, which resulted in boosting cash and profitability at large. The company also highlighted that means of enhancing savings further have been identified at its head office and pubs. The review, City Pub commented, is expected to conclude in September.

In the meantime, City Pub expressed confidence on Monday that it will recover its sales to pre-virus levels at a low-cost base.

City Pub raised £22 million of new equity

The British government resorted to a countrywide lockdown to minimise the fast spread of the novel flu-like virus in late March. Consequently, City Pub raised new equity of £22 million to strengthen its balance sheet as it braced to combat the economic blow from the health crisis. Learn more about the basics of a balance sheet.

According to City Pub Group:

“We are pleased with our encouraging performance to date since reopening, with our staff working under new rules and adapting to the new socially distanced trading environment with pubs operating at reduced capacities. Stand out performances have been delivered by a number of our pus, such as the Hoste, North Norfolk, which is benefiting from a significant increase in domestic tourism.”

At the time of writing, the £73.66 million company has a price to earnings ratio of 22.89.