City Pub Group on Tuesday warned that the coronavirus crisis will hit profits, but outlined plans to cut costs in a bid to soften the blow of falling sales.
The AIM-listed pubs operator saw comparable sales decrease 4.5% in the 11 weeks to March 15, although total turnover was up 11%. The shares tumbled 25% to 61p.
Chairman Clive Watson said a number of sites had suffered from sport fixtures, including Six Nations games, being postponed. The rugby matches normally pull in plenty of punters.
The firm predicts a “material reduction” to its expectations for 2020.
House broker Liberum reckons that profits could be just over £5 million, compared with the initial £11.5 million forecast. However, it predicts a return to normal profits in 2021.
The City Pub Group said measures will be introduced to ensure it “emerges out of the Covid-19 crisis in stronger yet leaner shape”.
Directors will take a 25% pay cut, there will be some staff cuts and a review of trading hours.
