Young's confident in British thirst despite market concerns
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Brewer and pub operator Young & Co’s reported another period of “strong performance” in its first half on Thursday, with total revenue up 6.0% to £144.1m.
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The company said that, in the 26 weeks to 2 October, its adjusted operating profit was 10.3% higher than the same period last year at £27.8m, while its reported operating profit eked out gains of 0.4% to £25m.
Adjusted profit before tax was ahead 11.2% at £24.9m, while reported profit before tax remained flat at £22.1m.
Young’s said adjusted basic earnings per share rose 13.4% to 41.15p, while basic earnings per share slid 7.1% to 35.62p.
Its board declared an interim dividend of 9.41p per share, a 6% improvement on the interim distribution last year, and the 21st consecutive year-on-year interim dividend increase according to the board.
“We are very pleased with our excellent performance during the period, which once again underlines the strength and effectiveness of a consistent, premium strategy and customer-focussed approach,” said chief executive Patrick Dardis.
“The pub is still the go-to place in Britain for drinking and eating out and, while much has been written about the challenges facing the pub industry, we believe that providing customers with well-invested pubs, a quality offer and outstanding customer service is key to our success.”
On the operational front, Young’s said its tenanted division, Ram Pub Company, outperformed the market with like-for-like sales up 1.6%, although total tenanted sales were impacted by a number of transfers to the company’s managed house division.
It made an investment of £14.3m into a number of “significant” redevelopments in its estate, as well as the additions of the Bull in Bracknell and the Chequers in Hanham Mills.
The board confirmed the acquisition of the iconic 'SMITHS' of Smithfield site, and its sister venue in Cannon Street, were completed this week.
It said cash generation remained strong at £33.2m, with net debt falling 7.0% to £117.7m, improving its net debt-to-adjusted EBITDA ratio to 1.7x.
Young’s reported strong trading in the first six weeks of the second half, with managed house revenue up 7.0% in total and 4.9% on a like-for-like basis
“Despite the continuing unpredictability of our trading environment, we have made a strong start to the second half of the year,” Patrick Dardis explained.
“We are delighted to have acquired the iconic 'SMITHS' of Smithfield, which sits in the heart of the City, as well as its sister venue in Cannon Street, since the period end.”
Dardis said both sites were a “fantastic fit” with Young’s portfolio of premium managed sites, with their focus on steaks, breakfasts, craft beer and quality drinks, adding that the board was “very excited” about the potential for the company to build upon the acquisition’s existing offer going forward.
“Our expectations for the full year remain unchanged and we are confident about our long-term prospects thanks to our premium offer, well-invested and prime located pubs, and the talented teams we have in place across our business.”