Young & Co turns in a 'resilient trading performance'

Announcing its annual results, Young & Co, the London-based pub operator, has turned in what the group's chief executive Stephen Goodyear described as a "resilient performance despite challenging market conditions".

Revealing results for the year to March 29, 2010, Goodyear said the first eight weeks of the current financial year were "encouraging", with managed house like-for-like sales up 2.2 per cent.

But he added: "We remain cautious about the outcome for the year as reduced government expenditure, rising taxes, interest rates and unemployment, which to a large extent have been avoided in this recession, could yet derail the consumers' fragile confidence and spoil economic recovery."

Young's operates 219 pubs in London and the Home Counties, 120 of which are managed houses accounting for 88 per cent of turnover.

Goodyear said in 2009/10 Young's managed pubs saw turnover up 1.3 per cent to £112.9m, with operating profits up 1.4 per cent to £26.3m.

Around £8.2m had been invested in its managed estate, including £2.2m on the refurbishment of a third of its 348 hotel rooms.

Goodyear added that liquor and food sales were both up on last year on a like-for-like basis, driven by sales and marketing initiatives including 'Dine with Wine'.

Combined gross profit margin was also healthier, he said, with better food margins offsetting slightly lower liquor ones, resulting from absorbing some of the duty and supplier price rises.

"We have not indulged in extensive discounting tactics," said Goodyear. "This is something we feel would sit uncomfortably with the premium positioning that gives us a clearly defined position in today's crowded market."

The group's 16 hotels saw a better second half performance, according to the group, although over the year revenues fell 6.1 per cent.

Young's tenanted pubs saw what Goodyear described as a "comparatively strong performance", with like-for-like sales up 1.2 per cent. Volumes were 4.1 per cent lower, due in part to a pub closure in Borough, South London, and one pub transferring to the managed estate.

Operating profits fell nearly eight per cent to £5.4m, the result of the volumes decline and a series of targeted support packages.

Wells & Young's, Young's brewing joint venture with Charles Wells, saw volume brewed and sold "ahead of last year", with the South London operator's share of the profits generated coming in at £2m, up 3.6 per cent.

Despite missing out on some acquisition opportunities last year, notably when Punch Taverns sold a number of its managed pubs, Goodyear said he was "confident opportunities will emerge" in the future, although he warned "we are prepared to be patient"
Results at a glance

Turnover: £127.5m (up 1.1 per cent)

Underlying pre-tax profit: £19.4m (up 1.4 per cent)

Underlying earnings per share: 28.7p (up 3.4 per cent)

Final dividend: 13p (up two per cent)