‘Tale of two halves’ as Young’s reports ‘strong’ results

16-Nov-2023 - Last updated on 16-Nov-2023 at 11:45 GMT

Young’s results: Simon Dodd says the pubco is ‘delighted to see London truly back in business’

London-based pub operator Young’s has reported a 12% lift to its adjusted profit before tax and labelled the 26-week period of its financial year as a “tale of two halves”.

The business, which operates about 230 pubs in London and across the south of England, announced revenue had risen 5.4% to £196.5m (2022: £186.5), adjusted profit tax was £28m (2022: £25m) while net debt rose 9.5% to £184m (2022: £168.1m) in its interim results for the 26 weeks ended 2 October 2023.

Simon Dodds, chief executive of Young’s, which has made a bid to acquire City Pub Group, said: “I am pleased to report another strong set of financial results for the first half of the year.

“The period turned out to be a ‘tale of two halves’, as the abundance of sunshine in June gave way to unfavourable weather in the core summer months of July and August.”

He added the business was boosted by hot weather in September and the Rugby World Cup.

London bounce back

It invested a total of £39.1m across its estate pubs including the acquisition of five freehold sites and welcomed four new pubs in the Libertine (Westbourne), White Hart (Ford), White Lion (Tenterden) and the Huntsman (Brockenhurst) while also adding the virtual freehold interest in the Stag (Belsize Park) at the start of the period.

Young’s cited the bounce back of London as key to fiscal growth as like-for-like sales grew by 8.0% and a new accommodation strategy has also improved with like-for-like growth of 10.1% as total occupancy rose by 3.2 percentage points with an increase of £8.34 to average room rates. In total, RevPAR (revenue per available room) was up by £9.74 to £86.85.

Drinks sales performed well with draught volume sales up 8.5% as the business added Beavertown Lunar Haze, Asahi Super Dry and rugby-themed cask ale Drop Gold to its portfolio.

Food sales also helped boost coffers with a 4.4% rise versus the same period last year and up 1.5% on a like-for-like basis.

Meanwhile, total sales for the past six weeks are up by 5.8% and up 3.3% on a like-for-like basis with the Rugby World Cup bolstering trade, in particular through Guinness sales, while Christmas bookings are “already looking strong”.

Major schemes

Since the period end, Young’s has completed two individual freehold acquisitions, adding the Crooked Billet (Clapton) and the Ship Inn (Noss Mayo, Devon), and major investment schemes including the Constitution (Camden), the iconic Clarence (Whitehall) and the Guinea Grill (Mayfair), which, following a new lease extension, will incorporate the neighbouring property as part of the project, with an additional 84 covers and two new private dining rooms, will be completed in the upcoming months.

Dodd said: “Despite it being a challenging first half of the year, we have delivered an excellent profit performance, reaching record levels for an interim period.

“We are delighted to see London truly back in business, which was reflected by our pubs in the City and central London being stand-out performers, comfortably exceeding pre-covid levels as customers enjoyed the Young’s experience.

“While cost pressures across our supply chain remain, we have successfully mitigated headwinds and maintained our industry-leading margins. There are positive signs on the horizon, with cost pressures continuing to ease and stabilise in some areas.”

“Our strategy underpins our consistent delivery of industry-leading results and we remain confident in continuing to deliver superior returns for all our shareholders.”