The operator of more than 200 pubs across the south east, Young’s announced its intention to raise up to 19.9% of its share capital through a placing, which it hoped would provide the Group with the “financial flexibility to drive its continued success and faster growth”.
Young’s placed a total of 4,263,453 shares at 1,160p each and 4.9m non-voting shares at 735p per share as it raised gross proceeds of approximately £85.5m – with an additional £2.7m coming from retail investors.
The new shares represent in the region of 19.2% of the total existing issued ordinary share capital of Young’s prior to the placing.
According to its statement announcing the proposed placing, the net proceeds will be used to restart Young’s investment into its pub estate when its sites reopen in August, strengthen its balance sheet, and pursue an “opportunistic” acquisitions strategy post-lockdown.
As reported by The Morning Advertiser (MA), Young’s recently revealed that the closure of its pubs for the final 10 days of its financial year to 30 March 2020 cost an estimated £13m shortfall in revenue.
The operator also reported total group revenue for the same period was up by 2.6% year-on-year to £311.6m with managed house revenue increasing by 3% to £299.1m, which Young’s said was supported by a significant contribution from Redcomb Pubs following its acquisition in January 2019.
However, last month, Young’s revealed it was in the process of securing £100m in funding in addition to £30m it raised through the Government’s Covid Corporate Financing Facility (CCFF) in a bid to weather the Covid-19 pandemic.
On top of Government support, Young’s also raised £70m through a £50m loan facility with Natwest and HSBC and a new £20m revolving credit facility with Natwest.