Young’s, the London brewer and pub operator, has reported a 0.7% drop in managed like-for-like sales, but said it had turned in a good performance in the face of the recession.
Announcing its interim results for the half-year to 26 September 2009 the group revealed a 22% rise in profit before tax of £11.4m, up from £9.3m the year before. Revenue was up 1.5% at £67.2m.
The company, which is led by chief executive Stephen Goodyear, said it had also experienced a positive start to its new year – with like-for-like sales up by 0.9% in seven weeks at its managed estate.
Goodyear told M&C Report: “We are in a good position and we would be interested in buying new pubs. We’re not in a numbers game, but the strength of our balance sheet means we can buy pubs in single or lots.
“But not buying in the past half year has meant we could maximise our efforts on our existing estate.”
Young’s said that its focus of “maintaining the premium position” and eschewing heavy discounting, like other operators, had proved to be the right formula.
The company said it had also experienced a positive start to its new year – with like-for-like sales up by 0.9% in seven weeks at its managed estate.
In its managed houses the company saw 2.3% growth in liquor revenue and said like-for-like liquor sales were flat. Food revenues increased by 3.1%, but like-for-likes in this area of the sales mix were down by 0.6%.
The managed pub estate accounts for 88.8% of total revenues and overall revenue there increased by 1.7% to £59.7m.
Despite maintaining “a premium pricing policy”, Young’s said that profitability had been hit by large increases in electricity prices and rates. Food margins had also improved by 2.9 percentage points as the result of better purchasing, it added.
During the past 26 weeks the company has spent £5m improving its pubs, including £900,000 at its tenanted pubs where revenue fell by 0.5% and volume dropped by 0.8%.
It said that Wells & Young’s, the brewing partnership with Charles Wells, had seen revenue increase by 1%, resulting in £1.8m to Young’s adjusted profit before tax.
Young’s also reduced net debt to £64.9m. It has a £90m facility, which does not need to be renegotiated until March 2013.
The company’s basic earnings per share surged 37.5% to 17.43p and it paid an interim dividend of 6.24p per share, an increase of 2%.
