City Pub Group reports sales and profit growth in First Half: The City Pub Group, which operates 42 predominantly wet-led pubs, has reported sales rose 24% to £20.0 million (2017: £16.1 million) in the 26 weeks to 1 July 2018. Adjusted Ebitda was up 25% to £3.0 million (2017: £2.4 million). Adjusted profit before tax was up 73% to £1.6 million (2017: £0.9 million). In the 11 weeks trading since 1 July sales are up 24%. Nine pubs opened in 2018. The company stated: “This increased number of sites and wet-led focus of the business resulted in substantial Ebitda and sales growth. Progress has continued into the second half with sales up by 24%.With a further four sites in development, further sites in the hands of solicitors and others in negotiation, the business is ahead of its strategy to double in size to 65-70 sites by 2021 and anticipates operating more than 50 pubs by mid-2019. The group’s innovative Profit Share Scheme will continue and from 2019 employees are set to benefit from it on a more frequent, semi-annual, basis.” Clive Watson, executive chairman of The City Pub Group, said: “The strategic expansion of our high-quality drink-led estate has been key to the strong progress we have made in the first half. We were well positioned to capitalise on the excellent weather and our sports orientated pubs have benefitted significantly from the World Cup. The nine new sites that we have brought on stream over the course of 2018 have contributed to the increase in sales and group Ebitda which is reflected in today’s results. The momentum from the first half has continued into the second half and in the eleven weeks since 1 July we have seen sales increase by 24%. We are ahead of our original target to double the number of pubs operated by 2021 and expect to have 50 by mid-2019. This will be assisted by softening conditions in the acquisitions market and limited competition for sites. We are confident of meeting market expectations for 2018 and believe we have the right team and strategy to continue making progress.” He added: “These results have been achieved through acquisitions and investments made in 2017 and organic growth across the rest of the estate. The company benefited from the good weather across the summer and our wet-led sport pubs from the World Cup. As we have continued to acquire new sites the group has taken advantage of economies of scale driving an improved financial performance. The board is pleased with the significant increase in the group’s adjusted Ebitda performance. Operating (Ebitda) margins have increased from 15.0% to 15.1% (restrained by higher PLC costs as a result of the AIM listing). Margins are anticipated to increase further as the central overhead base becomes more efficient. The City Pub Group has grown from a start-up in 2011 to an estate of 42 pubs operating today through selective acquisition of predominately single sites. These are then refurbished, their offer targeted specifically to their local marketplace and managed by well incentivised operators who have a passion for delivering a consistent, high quality experience for customers. The group has a strong balance sheet and low gearing with current borrowings of only £14 million, which roughly equates to the value of our freehold backed sites that are currently closed and being developed. Net debt to Ebitda is around two times and this is anticipated to reduce significantly once the four development sites are open and trading. The group has in place a £30 million revolving credit facility expiring in July 2021. We are currently reviewing options for increasing and extending the length of our banking facilities.”

Diageo – the year has started well: Diageo has told shareholders that its trading year has started well. Chief executive Ivan Menezes said: “The year has started well and performance is in line with our expectations. We continue to execute our strategy with discipline and agility and despite seeing increased volatility in some markets we continue to expect organic net sales growth in F19 to be broadly in line with last fiscal year and consistent with our medium-term guidance of mid-single digit growth. We are focused on delivering both growth and efficiency, allowing us to continue to reinvest in the business to support the long-term growth of our brands. We continue to expect to grow organic operating margins in line with our guidance of 175bps of margin expansion in the three years ending 30 June 2019. In recent weeks, we have experienced some increased emerging market foreign exchange volatility, which has been partially offset by a strengthening of the dollar. Based on current rates we currently expect exchange to have a negative impact on net sales of £175m and a negative impact on operating profit of £45m for the fiscal year.”