Young's performing resiliently
London-based pub operator and brewer Young's put in a "resilient in increasingly challenging economic environment" for the half year to 27 September.
Sales across the company were up 3.7% to £66.3m and operating profit up 0.4% to £12.2m.
Turnover in the managed estate was up 4.9% to £58.8m, reflecting acquisitions made with same outlet like-for-like sales up 1.6%. Food sales provided the real growth area — up 9% and food now makes up 25.4% of sales compared to 17.7% five years ago.
"We have seen a number of consumer trends emerging in response to the credit crisis," said chief executive Stephen Goodyear. "Spending patterns are showing a more marked split between the beginning and end of the week, and we have seen a further increase in food sales, as Young's continues to benefit from some customers seeing eating out in pubs as an alternative to more expensive restaurants."
Struggling tenants
But it admitted the tenanted division is "where the difficult market conditions have had the most impact" with sales flat at £7.4m. "The impact of the smoking ban, duty increases and subsequent reductions in consumer spending have all hit trade and our tenants' businesses," said Goodyear. "We are engaged with our tenants and where necessary agreeing workable and realistic plans for the future."
He added: "The effect of the poor summer weather was compounded by the twin pressures of the economic slowdown, as consumers everywhere reined back their spending, and dramatic increases in operating costs. Against this backdrop, Young's has shown its mettle.
"Market conditions remain extremely challenging and were compounded in recent weeks by the unprecedented events in the financial markets during September and October. This is reflected in our trading for the first seven weeks, with managed house sales up 1.6% but down 3.3% on a same outlet like for like basis. In the circumstances, we believe that this is a creditable performance.
"We welcome the recent significant interest rate cut but believe that it will take some time for this to work through into improved consumer confidence. Accordingly, we are not anticipating that trading conditions will improve in the near term."
