Young's reports healthy profit rise after 'exceptional year'
Revenue grew 8.2% to £193.7m and adjusted operating profits increased 10.6% to £28.9m for the company, which saw like-for-like sales in its managed estate rise 4.6%.
Total revenue in its managed division increased 10% to £181.6m and operating profit in the division grew 12.2%. Like-for-like managed food revenue increased 7.6%, with drinks at +3.2%.
Young’s invested £19.4m in its managed houses – £16.5m in Young’s sites, of which £4.3m was on hotels, and £2.9m within Geronimo. It acquired the Cutty Sark (Greenwich) and the Narrow Boat (Islington) in the period.
There was significant growth in accommodation, with 397 more rooms. Accommodation sales were up 5.5%, with RevPar at £49.26, a rise of 27.6% since 2010.
Youngs’ tenanted estate reduced in size from 97 to 78, with 13 sold for net proceeds of £8.8m and exceptional profit of £2.2m. Revenue in the tenanted division was down 2.4% on a like-for-like basis and in total down 14.3% to £11.6m. Total operating profit before exceptional items reduced by 2.6% on a like-for-like basis and by 19.7% to £4.2m in total.
"Since the year end we have transferred the Marquess Tavern (Islington) and the Three Lords (the Minories in the City) to our Young’s managed operations, and over the coming weeks the Bull’s Head (Barnes) is set to become Geronimo’s third high profile music venue following its successes with the Elgin (Notting Hill) and the Half Moon (Putney).
The remaining 78 pubs generated an average EBITDA per outlet of £68,000. In the retained tenanted estate, £1m was spent last year and £1.4m in earmarked for this year.
Young’s proposed increasing the final dividend to 7.61p, resulting in a total dividend of 14.63p (2012: 13.93p), its 16th consecutive year of dividend growth.
Debt in the period fell to £112.6m, a ratio of 2.6 times EBITDA.
Meanwhile, managed house revenue in first seven weeks of current financial year were up 14.7% in total, or +10.6% on like-for-like basis.
Stephen Goodyear, chief executive of Young’s, said: "An exceptional year in a number of ways, with one-off events such as the Diamond Jubilee and the Olympic and Paralympic Games helping us to deliver strong like-for-like performance in the first half of the year despite some decidedly unseasonal weather, followed by further like-for-like growth when London returned to normal in the second half.
"Once again, our strong operating cash flow has enabled us to invest in improving further the quality of our estate at a time when competitors may be constrained, enabling us to increase our differentiation.
"We have added to our managed estate, both last year and in the early weeks of this, and we are nearing the end of the process of re-shaping our tenanted estate into one that is smaller but of higher quality.
"Trading since the period end has been strong with managed house revenue in the first seven weeks of the new financial year up 14.7% in total and 10.6% on a like-for-like basis, albeit against relatively weak comparatives. Over a thirteen week period, which gives a more rounded picture, like for like trade was up 3.7%.
"Our premium offer, through both Young’s and Geronimo, continues to prove attractive despite the continued caution on the part of the UK consumer. With the quality of our estate, the talent within the business and our balance sheet strength, Young’s remains in a strong position to continue to grow and deliver value to our shareholders."
