The decision by Young’s to divest its tenanted division Ram Pub Company is actually part of the pub operator and brewer’s growth strategy, “if it comes to fruition”, chief executive Patrick Dardis has told MCA.

In advance of its full year results published yesterday (20 May), the business confirmed reports that it had appointed Savills to explore a potential sale of the 63 strong estate – though this includes seven pubs that were purchased as freeholds with sitting tenants and will remain within the business.

He revealed that the potential sale has been mooted within the company for the past decade. “We looked at it two and a half years ago with Savills as a desk exercise to understand whether we thought there was an appetite and a value and the answer was then very clearly yes,” he said.

While it had kept the possible sale under review, a complete strategic review carried out during the pandemic made it clear that “now is the right time to do it”.

Ram Pub Company represents 5% of its group pub turnover, so is a small part of the business. “It’s a declining part of our business, and certainly not an arm for growth,” added Dardis.

“We can redirect the money we would normally spend on that business into our managed houses. We can allocate more investment into our existing estate and it gives us more firepower to take up opportunistic freehold acquisitions when they come available,” he explained. “So it’s actually a growth strategy.”

Notwithstanding what happens with the tenanted division, Young’s is looking to “step up” investment in its existing estate, “and we are very acquisitive and keen to grow”. Dardis said that it would take a break from pumping any capex into refurbishments for the rest of this year – in order that it can trade from all of its pubs, but will kick off its investment plan in January next year, with plans to spend +£40m over the course of its 18-month plan.

Burger Shack is back

The business has also earmarked £1.1m for new huts, stretch tents, furniture and heaters for its gardens in order to make them suitable for use in the winter.

While originally positioned with a summer focus, Young’s has relaunched its Burger Shack concept with a new menu and branding and is looking to trade them over December and January as well.

It has so far added another 10 to its outdoor spaces, since 12 April, and Dardis told MCA is was looking to add a further 10 between now and the end of the summer.

The business opened 144 of its pubs on 12 April and reopened its remaining pubs and hotels this week, with Dardis optimistic that Young’s could see “a record summer” as a consequence of the expansion and investment in its gardens and existing estate, the anticipated staycation boom and events such as the European Championships and British Lions tour. “We are very optimistic and excited about this year,” he said.

The opening of all its sites has also meant the end of the furlough scheme at Young’s with all its staff now back. Dardis said the business even gave all of its teams a pay rise in May, following its annual review, and rewarded its general managers and head office staff with a bonus. “I think everybody was surprised by that. We had a lot of emotional people,” he said.

Positives of the pandemic

Dardis said one of the most “refreshing and positive” things to come out of the pandemic, has been the respect shown towards Young’s staff. He said customers “really do appreciate the pub staff and have demonstrated that very clearly in the incredible increase in tips,” he said. “The more the app used, the bigger the tip.”

Young’s had just been working on updating its app, to include things like order and pay at table, when the pandemic struck. Dardis explained that since its introduction, as well as tips to staff having “virtually doubled”, it has also seen a 20% increase in sales of premium products, be that wine, spirits or food, with gin sales still on the up, he added.