Young's, the brewer and pub operator, has this morning unveiled a 4% increase in first half profit before tax of £11.9m.
It also reported an acceleration in like-for-like sales growth at its managed pubs — with the key performance indicator moving up to 1.8% in the first seven weeks of its second half, up from 0.8% for the 26 weeks to 27 September 2010.
The company's tenanted business maintained its revenue both on a total and like-for-like basis, but profits fell by 4.2% as some support packages were increased.
Like its rival Fuller's, the group reported that it had also benefited from its room stock — with accommodation revenues up some 18.7% and revenue per available up 20.1%.
Income at the group's 121-strong managed division now accounts for 89% of its revenue and it revealed that its operating profit in this part of the company was 2.7% ahead at £15.3m, which was mainly driven by investment in the hotel business and improvements in wage control.
Young's said that its average ebitdar (earnings before interest, tax, depreciation and rent) per same outlet managed house was just ahead of last year at £161,000.
Like other operators in the managed sector it reported an increase in food sales, with a 1.5% hike attributed to a "greater emphasis on our national cuisine and a pub-led celebration of all things British."
Young's invested £6.6m during the period on its managed estate and opened two new sites — The Dial Arch in the Woolwich Arsenal and the Lass O' Richmond Hill. It has also completed major refurbishments at the Coopers' Arms, Chelsea, and the Alexandra in Wimbledon.
Tenants
At its tenanted division, Young's said that profits fell by 4.2% to £2.7m, as it provided additional support to help tenants. It spent £1.4m on acquisitions and developing its existing estate during the period, added the company.
Projects undertaken included the Grand Union, Wandsworth, the Malt Shovel, Dartford, and the Prince of Wales, Merton and Young's is currently finishing developments at the Lamb Inn, Hindon, the King's Arms, Epsom, the Pig and Whistle, Wandsworth and the Plough Inn, Wrington. It also added the White Hart in Witley and Mavericks, which reopened in Southampton, during its first half.
Brewing
At Wells & Young's, its 40% owned brewing partner, revenue increased by 1.5% and profit before tax growth, once adjusted for exceptional items, of 18.0%. Wells & Young's has contributed £2.1m to Young's adjusted profit before tax.
The company also claimed that the announcement re production of Corona and Red Stripe would, "not however have a material impact on Young's profits in the current year and, beyond that, we are confident that Wells & Young's management will respond in such a way so as to minimise any profit shortfall."
Net debt was almost unchanged at £62.6m and its interim dividend increased for the 14th consecutive year, up 2.0% to 6.36p per share.
Caution
Stephen Goodyear, the group's chief executive, said: "Young's has turned in a good result, reflecting a resilient performance in our pubs, and a particularly positive showing from our hotels which have been the focus of recent management attention.
"We have continued to invest both in new sites and in the development of our existing estate.
"Despite this, net debt remained almost unchanged at £62.m
"The second half has started positively with managed house revenue up 3.4% in total and up 1.8% on a like-for-like basis. The extra burden on consumers over the coming months, with tax rises, job losses and the government's austerity programme gives us reason for some caution.
"However, we believe we are well-placed to build on this performance, aided by the quality and premium position of the Young's brand and our London presence and focus."