The City Pub Group targets £30m in a float on Aim this month
The City Pub Group is set to launch its long-awaited float on London's Alternative Investment Market (Aim) by the end of November.
The group, which operates a 34-strong estate of premium pubs across the south of England, will today announce its intention to go forward with an initial public offering (IPO) to raise £30m of primary gross proceeds.
The funds will allow City Pub Group, which changed its name from City Pub Company at the start of the month, to press on with its plan to accelerate expansion across southern England.
With pubs in areas like London, Cambridge and Bath, chairman and co-founder Clive Watson told City AM the firm will continue to target southern cathedral cities, including Cardiff, Swansea, Birmingham and Canterbury, where pubs attract an array of locals, students and tourists.
"I think there are very good opportunities not only to increase sales, but also the size of the estate," Watson said. City aims to double in size over the next three to four years, and the group claims a proven track record with a three-year compound annual growth rate (Cagr) from financial years 2014 to 2016 of 34.9 per cent and 44.8 per cent, respectively.
Despite caution elsewhere on the stock market – mast provider Arqiva and ready meal maker Bakkavor both scrapped their floats last week due to volatility in the market – Watson was confident that now was the time to expand.
"I've been trading in the pub market for 27 years. I recognise there are headwinds, but nothing like in the early '90s or even 2002, 2003 or the credit crunch. I don't recognise the concerns that other people have," he said, adding that certain issues had already been absorbed by pub companies, like business rates and changes to the national living wage.
Watson said time had been called on the pub sector many times in the past, like after the smoking ban, but it was always a "massive overreaction".
He added that trading, particularly in the last four to five weeks after a slower August, was robust, and the company was well set up with good supply deals, experienced management in place and strong acquisition opportunities.
Watson previously founded Capital Pub Company, which he and partner David Bruce floated on Aim and later sold to Greene King in 2011 for £93m.
IPO plans were first announced in 2016 when the company had just 25 pubs under its belt.
Liberum Capital is acting as nominated adviser and joint bookrunner and Berenberg is acting as joint bookrunner in relation to admission.
Read more: City Pub Company closes in on IPO this year