Geronimo boosts Young's half year results

Revenue for the half-year to 3 October rose 33.6% to £90.46m, while operating profit was up 21.2% to £15.006m.

However, the company made a pre-tax loss of £16.1m during the year on the back of a £29.1m non-cash charge relating to the revaluation of its property portfolio. The group’s estate was revalued at £497.4m, resulting in a net uplift of £174m to its book value. The group said it now had a revaluation reserve of £203.1m (£157.5n when net of deferred tax). Adjusted profit before tax and exceptional items increased 10.5% to £12.5m. The group invested £12.2m in its estate during the year, which was part funded by disposals and cash generated from operations. At the period end Young’s operated an estate of 245 pubs: 152 managed and 93 tenanted.

It said that total managed house revenue was up 37.9% to £83.08m and operating profit was up 23.1% at £18.78m, driven by the acquisition of Geronimo and the “good performance of the underlying business”.

Managed house like-for-like sales, which exclude Geronimo, were up 4%. Geronimo like-for-like sales, which will not form part of the group’s total like-for-like sales until its next financial year, were up 12.6% compared with the corresponding period. The company said that the performance of its managed operation, which comprises 106 Young’s pubs, 16 hotels and 30 Geronimo pubs, was set against a mixed backdrop of excellent weather at the start and end of the period, the Royal Wedding weekend, the London riots in August and the continued challenging economic conditions.

Young’s said that in line with its competitors, its tenanted pubs have faced difficult trading conditions over recent years and this had resulted in the group taking a long-term, strategic look at the future of the tenanted estate.

It believes that a smaller and better invested estate is the way forward and as a result, sold the Bricklayers Arms in Sydenham, the Charlie Butler in Mortlake and the Castle in Battersea for a total of £2.5m. It said it would make additional disposals from its tenanted estate during the second half of the year.

Stephen Goodyear, chief executive of Young’s, said: “This has been an extremely encouraging six months for Young’s. Our estate has traded very well, the acquisition of Geronimo is proving to be every bit the success we expected, and our hotels business has shown further strong growth.

“Our decision to focus on an estate of premium managed houses, primarily in London and the south of England, is clearly paying off and will help to insulate us against the worst of any further economic downturn. We anticipate a healthy pipeline of opportunities, using our balance sheet strength, to grow further in line with this strategy.

“Trading performance in the early weeks of the second half has continued in a positive vein, and we remain confident in our ability to deliver further long term growth in shareholder value.”