Young’s to rebrand tenanted estate as Ram Pub Company

Revenue in the year grew 8.8% to £210.8m. Operating profit was up 20.3% to £32.6m. Young’s proposed a 6% increase in its final dividend to 8.07p, resulting in a total dividend of 15.52p (2013: 14.63p), making it the 17th consecutive year of growth.

Meanwhile, managed house revenue in first seven weeks of current financial year was up 8.5% in total, and +7.2% on like-for-like basis. Managed house revenue increased 9.6% to £199m, with same outlet like-for-like sales up 6.7%. Managed house adjusted operating profit was up 13.7% to £45m. Managed total and like-for-like drink sales were up 10.2% and 6.3% respectively.

Beer sales were up 8.8% but food sales outperformed them once more, up 11.2% and 7.6% on a like-for-like basis.

A record £19.8m was invested in the existing estate, with two new managed and three tenanted pubs acquired.

Accommodation​

Young’s reported continued growth in accommodation sales driven by both occupancy and room rates resulted in RevPAR of £52.02, up £2.76. Additional rooms set to open in first half will bring the total number of rooms to 443 (2013: 397). By September, there will be hotel accommodation in 20 pubs.

Young’s said tenanted houses now represent 5.4% of group revenue. As a result of the reduction in the size of its tenanted estate by nine pubs over a two year period, the tenanted division’s sales were down 2.1% and operating profit was down 9.4% at £3.8m.

“As a consequence of our strategic initiatives, we are confident that our tenanted operation will return to growth in the current year”, the company said.

“The next stage of our strategic plan is already underway and by the end of the summer our tenanted operation will be re-launched as the Ram Pub Company, with its own unique identity.

“The new Ram Pub Company will be in place by the second quarter of the new financial year and once rebranded, with a new website and a strengthened support team, will be able to change substantially the way in which we market and communicate with our tenants building on the important business partnerships we cherish.”

Debt​

Net debt reduced both in absolute terms and as a multiple of EBITDA to 2.45 times (2013 2.77 times) that, along with new banking facilities, “gives significant flexibility for further investment”.

Stephen Goodyear, chief executive, said: “This was another excellent year, with strong revenue and profit growth, particularly when compared with last year which included the Olympics. Our focus on London and the south east is a real advantage, as is our very clear positioning at the premium end of the market. The improving economic picture is increasing customer confidence which we are seeing in both footfall and spending patterns, with customers trading up in both drink and food.

“Such is the strength of our cash flow that we have been able to invest £33.6 million during the year, whilst reducing our debt. As a result, there is today real depth and richness to our estate, and we remain ambitious to expand and broaden it further.

Positive​

“Trading since the period end has been positive with managed house revenue in the first seven weeks of the new financial year up 8.5% in total and 7.2% on a like-for-like basis.

“The consistently high level of investment in our estate, combined with the hard work put in by our teams across the group, is clearly paying off. Coupled with the improving economic news flow this gives us every reason to be confident that the current year will be another positive one for Young’s.”