Young’s has reported a 7% rise in like-for-like sales across its managed estate in the 26 weeks to the 29 September and said that after the extended summer, trading has continued “very positively into the autumn”.
Managed house revenue in the period climbed up 7.5% to £110m, with managed house operating profit up 7.9%.
It said it had seen “encouraging trading” since the period end, with managed house revenue in the first seven weeks up 10.3% in total, up 8.8% on a like-for-like basis, and said there was further impetus to come from newly acquired sites.
Total revenue increased 7.8% to £116.6m, up 6.9% on a like-for-like basis. Pre-tax profit climbed 26.2% to £18.8m and, once adjusted for exceptional items, was up 15.7% at £18.4m.
Net debt increased to £116.6m owing to investment in both the group’s existing estate and new acquisitions, but continued to fall as a multiple of the last twelve months’ EBITDA (2.36times).
The group said that its tenanted estate, recently re-launched as the Ram Pub Company, returned to growth with total revenue up by 12.3% and by 4.6% on a like-for-like basis
It also said it had seen continued positive momentum in its hotels division, with a further 63 rooms added. Accommodation revenue climbed 19.7%, with RevPAR up 9.3% from £55.22 to £60.37.
In total, the group invested £20.4m across its managed house estate (127 Young’s pubs (including 21 hotels) and 35 Geronimo pubs): £7.2m in Young’s hotels including the Fox & Anchor, £9.9m in Young’s pubs and £3.3m in Geronimo pubs.
It said that these investments had driven strong increases in both revenue and profits in its managed division. Young’s revenue was up 8.6% in total and an impressive 7.9% on a like-for-like basis, and Geronimo’s was up 4.6% in total and 4.3% on a like-for-like basis.
Drink sales across it managed estate were up 6.7% in total and up 6.3% like-for-like, driven by both volume and price. It said that growth was seen across all the main product groups of beer, cider, wine and spirits.
Food sales were up 7.9% in total and 7.3% on a like-for-like basis. Aided by its ongoing pub investment programme, the group said that food continues to outperform drink and now represents 29.5% of the company’s revenue mix.
The group said that the combined impact of the relaunch of its tenanted estate and management initiatives over recent years were showing promising results, with total revenue up 12.3% and operating profit up 21.1%. It now operates 81 tenanted pubs; this is an increase of two on the previous year-end, resulting from four transfers from its managed estate (the Butcher’s Hook, King’s Arms (Epsom), Marquess Tavern (Islington) and the Riverside Inn (Chelmsford)), one transfer in the opposite direction (Lamb Inn) and the sale of the Tamworth Arms (Croydon).
It said that further impetus in the current year will come from the four pubs acquired through 580 Ltd and the Bull and Gate (Kentish Town), the long-awaited opening of which is set for late winter.
Looking further out, the two sites being developed in partnership with Berkeley Homes are likely to open in the late summer next year.
The company said that with its robust balance sheet, it continues to pursue opportunities to acquire both pubs and hotels that fit our profile both in London and the south of England.
Stephen Goodyear, chief executive of Young’s, said: “We are delighted to report another period of very strong trading, with further impressive sales growth from our managed estate and a return to growth in our tenanted division. Our many pubs in riverside locations and with attractive beer gardens have clearly benefited from the long, warm summer. Fundamentally however, our continued like-for-like growth comes from having high quality, well-invested pubs and hotels in a range of great locations, with a premium food and drink offering delivered by talented and motivated teams across both Young’s and Geronimo.
“We acquired two pubs and two development sites during the half, and a further four pubs since the period end. With our strong balance sheet, we continue to pursue opportunities to acquire both pubs and hotels that fit our premium profile.
“After the extended summer, trading has continued very positively into the autumn, and further impetus in the current year will come from the newly acquired pubs as well as from the re-opening of some of those currently undergoing redevelopment. We are confident that the strength of our existing estate, coupled with our appetite to grow further through acquisition, will continue to serve us well for the remainder of the year and beyond.”
