City Pub Company is eyeing younger pub-goers for further growth after announcing a 34 per cent jump in turnover today.
The 33-strong group said that revenue had reached £37.4m for the whole of 2017, in its first trading update since its IPO at the end of last year.
This was largely due to expansion, but like-for-like sales at comparable sites also increased by 3.8 per cent.
Since the end of the period, contracts for three more sites have been agreed, with anticipated refurbishment costs of £2.6m. Another two are currently being refurbished, putting the total estate at 38, with 23 freehold and 15 leasehold.
Shares in the company rose over one per cent to 169.5p today, though have yet to return to IPO highs of 181p.
Why it's interesting
City Pub Company has earned praise from analysts, who see it as an opportunity to tap into the higher end of the pub market, with millennials as a particular focus.
Earlier this month, Berenberg made the company one of its top picks in the sector along with Fuller's, citing "well-invested, differentiated offerings that tap into consumer trends towards premium alcohol consumption".
This appeared to bear out in a record Christmas, with recent acquisitions outperforming management expectations.
Executive chairman Clive Watson told City A.M. today that the group's new pub in Parson's Green, which will open in March with a fully vegan menu, will tap into this demographic.
"You talk to young people and they say 'we're vegan', and they are the customers going forward," he explained.
He hopes that the pub will give the group expertise in vegan food and drink, which can then be rolled out with the goal of making a third of the menu in every pub vegan.
"I think you could take this to places like Bath, Brighton Cambridge, places we're already located."
The group will also follow JD Wetherspoon and other pub and bar operators in ditching plastic straws over the next three months, as well as other unnecessary packaging. "It's really important for our industry to lead the way on this one," he commented.
One of Watson's co-founders David Bruce announced today that he will step down as chairman to focus on other commitments, which include the chairmanship of West Berkshire Brewery. Meanwhile former Punch Taverns COO Neil Griffiths joins the board as a non-executive director.
What City Pub Company said
Speaking to City A.M. about the consumer trend to spend more on premium alcohols, Clive Watson said: "I don't just see it surviving, I see it thriving.
"I think a genuine shift away from brands [is happening] in general and particularly in pubs and restaurants. So I see our style of retailing actually gaining more and more as we go forward.
He added: "We've got the experience, we've got the right strategy. We've completed the first lap, there's no dash for growth."