Thursday 19 September 2019 8:47 am

City Pub Group to scale back acquisitions amid Brexit worries

One of the UK’s listed pub chains signalled it would scale back on buying new establishments as the company waits for the Brexit storm to blow over.

City Pub Group said this morning it will “take a much more prudent and even more selective” approach to acquisitions.

Read more: High spirits: City Pub Group cheers investors with sales rise as expansion continues

Instead the company will focus on developing its existing pubs until today’s political and economic uncertainty has passed.

“We cannot ignore the uncertainty in the market due primarily to Brexit and the potential impact of a no deal,” said chief executive Clive Watson.

“We are a management team that is focused on the long-term and as such we believe it is prudent for us to rein in our expansion programme until there is more certainty.”

It came as the company showed a 19 percent increase in pre-tax profits to £1.9m over the first six months of the year.

Revenue grew 36 per cent to £27.1m while like-for-like sales outpaced the market.

Shares in the company fell 6.44 per cent to 203.5p.

Anna Barnfather, an analyst at Liberum, said that a new regional management and a weekly staff bonus had weighed on margins “but will drive future growth.”

Read more: City Pub Group share price rises as it returns to profit after 2017 loss

She said that management would now turn its attention to building local custom and growing the existing estate.

“The group has grown rapidly in recent years with a number of development sites with significant potential to concentrate on in the short term.”