UK: Young & Co.'s H1 flat, despite challenges

By | 20 November 2008

Young & Co.'s Brewery has posted a steady set of half-year results in what the company has described as "an increasingly challenging market".

The UK pub operator said today (20 November) that operating profit for the 26 weeks to the end of September inched up by 0.4% year-on-year to GBP12.2m (US$18.1m), on the back of a 3.7% lift in sales, which came in at GBP66.3m.

Managed house revenue was up by 4.9% to GBP58.8m, thanks to recent acquisitions and investments of around GBP18.5m in the business during the period. "This top-line growth, despite the well-documented pressure on consumer spending, offsets the inflationary pressures on operating costs from utilities, wages and food and above inflation increases in duty," the company said. "We believe we have responded well to this year's challenges."

In Young's tenanted division, however, sales were flat at GBP7.4m. "The impact of the smoking ban, duty increases and subsequent reductions in consumer spending have all hit trade and our tenants' businesses," the company noted. "We are engaged with our tenants and, where necessary, agreeing workable and realistic plans for the future. Despite these challenges we managed to maintain operating profit at GBP3m."

"We have delivered a strong set of results in an increasingly challenging market," said Stephen Goodyear, Young's chief executive. "The effect of the poor summer weather was compounded by the twin pressures of the economic slowdown, as consumers everywhere reined back their spending, and dramatic increases in operating costs. Against this backdrop, Young's has shown its mettle.

"Market conditions remain extremely challenging and were compounded in recent weeks by the unprecedented events in the financial markets during September and October. This is reflected in our trading for the first seven weeks, with managed house sales up 1.6% but down 3.3% on a same outlet like-for-like basis. In the circumstances, we believe that this is a creditable performance.

"Young's is a long-term business, having traded for over 175 years and through other recessions. We have a cash-generative business, well-invested estate, great pubs in great locations and a conservative balance sheet. We believe this provides a sound platform for the immediate and long-term future of the business."

The company has increased its interim dividend by 2% to 6.12p per share. Payment will be made on 19 December to shareholders of register on 5 December.

Sectors: Beer & cider, Soft drinks, Spirits, Water, Wine

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