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Booming rosé sales help give City Pub Group confidence to promise dividend return

·2-min read
One of City Pub Group’s pubs  (City Pub Group)
One of City Pub Group’s pubs (City Pub Group)

Strong demand for pink wine for Provence has helped give City Pub Group the confidence to promise a return of a dividend for the first time since Covid struck, despite the cost of living squeeze on customers and rising inflation.

Chairman Clive Watson today said his business planned to “recommence dividends in the autumn” as the group, which owns 41 pubs, reported a 40% jump in sales to £35 million for the year just gone. Losses slimmed down from £7.6 million in 2020 to £3.1 million last year.

“We think now is the right time to reward our shareholders who haven’t had a dividend in two years,” Watson said.

Michael Clifton, consumer analyst at finnCap, said: “The business is in a relatively safe position regarding inflationary pressures, with 3-year supply agreements in place with its major beer suppliers from Dec-21 and energy cost exposure now hedged.”

Chief operating officer Toby Smith said the pub was seeing strong demand for “premium” drinks, highlighting sales of French rosé. Smith said the summer favourite was now in demand all year round and had “stolen a march on gin.” City Pub Group has started stocking magnums of rosé in some of its locations in response to strong demand.

Inflation is causing a cost of living crunch not seen in a generation, which could dent future sales as people tighten their belts. But Smith said he was optimistic about City Pub Group’s prospects.

“When times are tough the pub tens to hold firm,” he said. “It’s the big ticket items that come under pressure.”

Smith said recruitment “remains challenging” but has gotten easier than it was at the end of last year. The company is offering £1,000 referral bonus for people who can refer managers to the business.

City Pub Group is applying for a sponsorship licence from the Home Office that would also make it easier to hire staff from overseas.

“We’ve had applications from people in Canada, the US, but also Indian elsewhere in Asia,” Smith said.

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