Fourth year of double-digit growth for Young's

London brewer Young's has "plenty of financial muscle" to continue investing in its pubs and beers, it said today.

It revealed that pre-tax profits for the year to March 31 were up by over 20 per cent to £10.3m and turnover rose by six per cent to £96.9m.

Chairman John Young said his family's firm was "excited" about the opportunities in the market for vertically integrated brewers.

"Despite the appalling weather, we have continued to make good progress across the business, reporting our fourth successive year of double-digit growth," he said.

He added that a new credit facility and a low level of borrowings meant "we have plenty of financial muscle to continue to deliver our strategy".

Sales volumes of its beers, such as its Bitter, Special and year-old Triple A, were flat compared to last year, although the overall on-trade market for real ale is in decline. Within its tied tenanted estate, there was a "modest decline" in beer volumes, although this was offset by strong performance for wines and spirits.

However, volumes at its brewery in Wandsworth, south London, were up by 5.8 per cent because of new contracts, including a major deal with Scottish Courage.

Volumes of beers to the freetrade were up 10 per cent over the year, including an eight per cent increase in national accounts.

"The national brewers' declining interest in cask ale provides an exciting opportunity for Young's to increase production of its existing brand portfolio while seeking new prospects to expand it," Mr Young said.

The company has boosted its estate to 201 pubs through £7.4m of acquisitions, including 15 in the South West bought for £5.8m from Bristol brewer Smiles.

It also channeled £9.6m into improving its existing portfolio of managed houses and tenancies, spending £7m on major refurbishments of 11 pubs and seven hotels.

Further deals have just been completed to buy two pubs in Hendon, north London, and Bognor Regis, West Sussex. It is also in talks to buy another five outlets.

Mr Young said: "We have further strengthened the business with record levels of investment and the extension of our trading area following the Smiles acquisition."

Related stories:

Young's goes for the net (June 4, 2001)

Smiles estate sold to Young's (November 20, 2000)