City Pub Company to raise up to £10m more in equity: City Pub Company, the EIS company headed by Clive Watson, has hit current turnover run rate of £6.4 million in the year to the end of June, up from £3.1 million for the comparable year. Ebitda has more than doubled to £677,000 from £320,000. The company is also set to launch a further round of fund raising, looking to raise between £5 million and £10 million. Watson stated: “The important thing is that the positive cashflow generated by the business is increasing, which will help to provide funding for new acquisitions in the future. Across the two companies we now have 17 pubs, of which only eight were trading throughout the first six months of 2014. These results are very encouraging, especially as only half the pubs were up and running during this six-month period. Across the two companies we now have 17 pubs which include – two pubs in Cambridge, Norwich and Bath as well as a further five pubs in London. It’s great we are finding opportunities and with the new fundraising that we are going to launch in April 2015 where we aim to raise £5/10m of new equity and I am confident we will be able to build up a portfolio of 25-30 quality pubs. We are still ahead of the curve where The Capital Pub Company was after it had been trading for two years. We are in control our own destiny and are well set to deliver good growth for our shareholders. My co-executives Rupert Lindsay-Clark and Alex Derrick are now leading the charge, supported by a very experienced head office team and a great bunch of pub managers. As a result of the successful equity fundraisings and each company’s new improved bank facilities, the board is keen to acquire further sites to expand its existing portfolio.” Of new fund-raising, Watson said: “The Board has previously committed to shareholders that there would be no further equity dilution through further EIS fundraisings for either of the two companies. Consequently, the Board has explored options of how it could continue to expand operations across the two companies without resorting to high and expensive bank borrowings. The Board therefore believes it is in the interests of the shareholders to raise further funds through the issue of a new Convertible Preference share. The monies raised through this method would be able to be treated as equity and will be utilised to acquire more high quality pubs to increase the attractiveness of the two companies when seeking to maximise value for shareholders on exit in the future. Whilst the Board has not agreed the exact terms of its Convertible Preference share it is likely that this will yield a coupon of around 6% and a conversion rate of around 170p. It is the Board’s intention that existing ordinary shareholders will have preferential treatment should they subscribe to these Convertible Preference shares, which will provide the dual benefit of a good level of income as well as qualifying for IHT relief. It is anticipated that the Convertible Preference share offer will be launched at the same time that the December 2014 year end accounts are published. We anticipate this to be around mid-April 2015. The Board are very excited about the new fundraising, especially as it has identified several new opportunities for acquisition that would add significant value.” The company also reported on acquisitions and disposals. It stated:

Delaney’s, 41 St Andrews Street, Norwich, Norfolk, NR2 4TP: This is a three storey building located in the heart of Norwich. Contracts have already been exchanged and we are now running the pub on a management contract until completion in the middle of October. As soon as we complete it is our intention to close the pub down for extensive refurbishment and we will put in a brew house operation as part of the new revamped look. It is anticipated that the pub will reopen in early 2015.

The Cock & Bottle, 7 Needham Road, Notting Hill, London W11 2RP: We are hoping to complete on this pub by the middle of October. We will undertake an extensive refurbishment and plan to reopen some time in Spring 2015. 

The Georgian Townhouse, 30-34 Unthank Rd, Norwich, Norfolk, NR2 2RB: This pub, which is located in the golden triangle area of Norwich, has now been reopened and early trading has been very encouraging. The whole of the ground floor bar and dining areas have been totally upgraded and we have added on a new conservatory as well as making the outside garden area into a wonderful place to wine and dine. I would recommend that any shareholder who is in that area try out the offer. 

The Temple Brew House (formerly The Bierpalast), 46 Essex Street, London WC2R 3J: This pub is currently being developed into a brew house operation. It is anticipated that this will reopen in mid-November. 

Daly’s Wine Bar, 210 The Strand, London WC2R 1AP: This is a long established wine bar and restaurant in a very prominent location close to the Royal Courts of Justice. The site is well known to the Directors and we are keen to bring it back to its former glory. However, in light of the refurbishment of The Temple Brew House next door, we have decided to keep Daly’s open until the end of the year and to commence the refurbishment in January 2015. We will reopen Daly’s hopefully by the end of March 2015.

The Three Blackbirds: We have completed the sale of The Three Blackbirds in Newmarket for a consideration of £560,000. The directors felt that this pub, whilst being a very attractive freehold, was no longer achieving the right returns on capital and the Board believes that the sale proceeds will be better deployed elsewhere. 

Alfie’s, 157 High St, Winchester, Hampshire, SO23 9BA: We have now secured a new lease on this pub and we have started the refurbishment of the site with a view to reopening it in mid November 2014. The pub had previously been trading well and we believe that with the benefits of refurbishment and a stronger food offering there will be a good increase in sales.

Henley Brew House: On 12 September we exchanged contracts on the Henley Brew House for a sale price of £875,000. When we first opened this pub it traded very successfully but increased competition in the area meant that the company was not generating the returns on capital which had been anticipated and it was felt best to dispose of this pub and reinvest the capital into future acquisitions.