Changes at Young & Co pay dividends

London pub operator Young & Co said its "strong" first half results reflected the changes the group underwent last year.

Young's chief executive Stephen Goodyear said the strategic changes of last year - the creation of its brewing joint venture Wells & Young's (W&Y) with Bedford group Charles Wells, and a focus on its own retail offer - had paid dividends.

Turnover for the six months to September 29 2007 rose 11.9 per cent to £63.9m, with operating profits up 72.1 per cent to £12.1m.

Managed pub revenue rose 13.6 per cent, with like-for-like growth of 5.7 per cent on an invested basis. Food sales rose nearly 24 per cent, accounting for almost a quarter of the 112-strong managed division's turnover.

Revenue across the 104-strong tenanted and leased business rose 1.6 per cent, or 0.8 per cent on a like-for-like basis.

Goodyear said despite a dreadful summer the group's managed pubs had performed very well, while current trading was "resilient", with managed pub sales up 8.7 per cent, or 8.3 per cent on a like-for-like basis, and the leased and tenanted estate seeing "no significant change".

It was "too early" to talk about the effects of the smoking ban, he added, but acknowledged concerns remained about how it might affect trade over the colder winter months.

Turnover at Wells & Young's brewing operation came in at £108.6m; of the £3m profit the venture generated Young's share was £1.2m, a margin of 1.1 per cent.

Young's finance director Peter Whitehead acknowledged the mark-up on some products was "tiny", but this was due to various supply agreements with the venture's parent companies.

Whitehead said the first year of W&Y was always going to be a transitional period and the group was looking forward to a bigger margin next year.

"W&Y is brewing to capacity and now it's about cost-base adjustments. These things take time to settle down. But we're pleased we did the venture," added Goodyear.

The group had invested £8.4m into its during the period, mainly in redevelopments, smoking solutions and refurbishments.

In terms of growing the size of the Young's estate, Goodyear stressed the group was still on the lookout for acquisitions, "but we're waiting for the right opportunity; I won't be panicked into buying something daft", he added.