City Pub Group shares tumble as it ‘reins in’ expansion plans over Brexit

City Pub Group saw shares slump after it said it was “reining in” expansion plans due to Brexit and the potential impact of a no deal.

Clive Watson, founder and executive chairman of the South East-focused pub group, said the company was “keeping its powder dry” and being more selective with the acquisition of sites to better withstand the impact of a disorderly Brexit.

However, the company, which has 47 pub sites across the UK, said it would turn the “acquisition tap fully on” if the UK secures a positive Brexit deal.

In contrast with pro no-deal Wetherspoons boss Tim Martin, Mr Watson told the PA news agency that the company’s decision to slow down its recent rapid expansion will help it if Brexit impacts consumer confidence.

Mr Watson said: “We cannot ignore the uncertainty in the market due primarily to Brexit and the potential impact of a no deal.

“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.”

The company said it was encouraged by like-for-like sales growth against tough comparatives as overall sales for the first half of the year were boosted by new pub sites.

City Pub Group reported a 36% jump in total revenues to £27.1 million for the half year to June 30, as it was boosted by its expansion plan which including four pub openings over the period.

Like-for-like sales increased by 2.6%, despite going against a period last year boosted by the football World Cup.

The company added that “progress has continued” into the second half of the year, with total sales over the past 11 weeks up 35% against the same period in 2018.

Pre-tax profits increased by 19% to £1.9 million, although operating margins were lower due to one-off infrastructure spending, the company said.

Mr Watson added that the company has also been boosted by investment into its long-standing pub portfolio, as well as boosting its food offering.

He said: “We’ve put money into ensuring we have slick, efficient food operations, as well as ensuring we cover the needs of our customers.

“Vegan and healthy foods continue to be key trends and we are stronger now because we have taken the time to review our offer.”

Shares in the company slipped 9% to 198p on Thursday.