Young's to lease half of tenanted pubs

Young's is to convert half its tenanted estate to lease

over the next two to three years. The move should see

at least 20 pubs move to 20-year leases in the next two years.

The company's new approach comes as Young's revealed half-year pre-tax profits up 4.8% to £5.8m on turnover up 10.6% to £69m and upped its dividend by 50%.

Chief executive Stephen Goodyear said: "We have identified the pubs we would like to convert to leased, and so far we have discussed this with about six tenants. We want to do as many as possible. It should result in significant improvement in sales and profits."

Goodyear said the company wass also keen to grow opportunities for tenants generally: "We need to invest more here," he commented.

The estate has been revalued at £399m, pushing up net-asset value - the value of its property expressed in share-price terms - by £15.01 to £31.87.

Managed turnover was up 15.2% and tenanted down 1.7%, as a result of several major transfers to managed. Profits at managed pubs were up 7.1% but down 14.7% in tenanted, partly for the same reason. Food grew by 27.2% in managed pubs, and now accounts for 22.4% of managed sales.

Plans are in place for each pub to help cope with the smoking ban. Only nine tenancies do not have outside areas. "While there may be some initial downside from the ban, the medium-to-long-term effects are expected to be positive for Young's," added Goodyear.