Young's: sales flat, profits up
Young's, the London brewer and pub operator, has this morning announced a 1.4% rise in pre-tax profits to £19.4m, with like-for-like sales flat on last year.
Despite a tough year, which saw operating profits fall 1.2% to £20.3m in the face of increased overheads and weaker accommodation sales, Young's said it was buoyed by recent trading — with like-for-like sales up 2.2% at its managed pubs in the past eight weeks.
Unveiling full year results for the period to 29 March, the company, which operates 120 managed pubs and 99 tenanted, said sales had pushed ahead 1.1% to £127.5m.
In its managed house arm, which accounts for 88.5%, revenues rose 1.3% to £112.9m and ebitda was up 1.5% to £33m. It said average ebitda per pub — before rents — was £308,800.
Cask ale sales now represented 35.4% of draught beer volumes.
The company said it had benefited from a focus on e-marketing, with over 300,000 people now receiving regular information about events and offers, such as its successful Dine with Wine campaign, within Young's managed pubs.
It said it continued to eschew significant price discounting, given its desired premium positioning.
During the period it spent £6m on its managed division, carrying out major work at eight London pubs. Young's said that it had seen average ebitda returns of 21% on similar work carried out in 2009.
Within its managed pub arm, the company operates 348 letting bedrooms. It said the hotel side of the business had proved difficult with revenue per available room (revpar) down 6.1% to £38.62, the result of reduced room rates. The second half had shown some improvement however, with revpar up 2.4% against the second half of 2009.
During the period it upgraded a third of these, spending £2.2m, meaning that in the past two years half the room stock had been touched by the capital investment programme.
In its tenanted division, which accounted for 11.2% of total revenues, operating profits fell 7.9% to £5.4m, a result of a fall in volume plus the fact that Young's had not passed through all supplier price and duty increases to its tenants.
Tenated ebitda was £6.5m — or £66,100 per pub.
At Wells & Young's Brewing Company, the firm's joint venture with Charles Wells, profits were up 3.6% to £2.0m, after adjusting for losses against Cobra, a beer it brewed under contract that underwent a pre-pack administration. This resulted in a change of ownership and the loss of the contract.
Young's said export volumes at WYBC grew 9.1%.
During the course of the year net debt was lowered £3.1m to £62.2m. The group said it remained conservatively geared (36.9%) and more than half of its debt was secured to 2018 and beyond.
