The group has agreed to sell 56 of the 63 tenanted pubs to Punch Pubs & Co and to retain the remaining seven sites for the long term.
Young’s will sell most of the Ram Pub Company’s sites for a total consideration of £53m in cash, having generated earnings before interest, taxation, depreciation and amortisation (EBITDA) of £4.7m for the year ended 31 March 2019.
The Ram Pub Company registered revenue of £3.3m, with an adjusted operating loss of £700,000, during the 52 weeks to 29 March 2021.
Managed estate
Net proceeds from the sale would help the company strengthen its balance sheet and make it possible to invest further in its managed estate, Young’s said.
Its managed estate of around 200 sites yielded revenue of £87m, with an adjusted operating loss of £18.6m, the company’s most recent financial results revealed.
The company will also focus on the acquisitions of freehold managed pubs for the most part and expects to see its head office costs reduced following the disposal.
Young’s chief executive Patrick Dardis the company’s “sole focus” will now be on the operation of premium freehold managed pubs and hotels.
Additional firepower
The operator invested £16m into improving the pubs in its managed estate and bought two sites in Greenwich and St Albans during the lockdown.
“We have a proven history of making attractive returns from investing in high-quality pubs and this disposal will provide us with additional firepower to upgrade our existing pubs and capitalise on attractive acquisition opportunities that may come to the market,” Dardis added.
“We are delighted to be welcoming back our customers and are already seeing encouraging trading, despite some restrictions remaining.
“The board is confident Young’s will emerge from the pandemic in a stronger position and is excited about the future of the business."
The disposal is expected to complete on 9 August 2021.
