- Young’s completed largest deal in its history last year as it eyes further growth
Young & Co’s Brewery is hoping to capitalize on a bumper sporting summer after a “historic” year for the pub group.
The London-listed company posted adjusted pre-tax profit of £49.4m for the year to April 1, up from £45.2m a year earlier and beating consensus estimates. £43.7 million.
Young’s was boosted during the period by the £158m acquisition of The City Pub Group in November, which added 55 pubs to be built and an estate comprising 288 premises.
Sports boost: Young says this summer’s sports festival should give it a boost
The firm said the deal, which was the largest in its 193-year history, generated £7.2 million in revenue and profits before £1.7 million in the four weeks after it was completed on the 4th. of March.
Boss Simon Dodd described the acquisition of City Pub Group as “a real milestone for Young’s” after a “landmark year”.
He added: “Our investment in future growth did not stop with the acquisition of The City Pub Group; during the period we acquired eight excellent pubs, made further investments in our existing property and upgraded our technology to improve the customer experience and turn a profit. of productivity”. .’
Looking ahead, Dodd said Young’s “faces some challenges” as the broader industry continues to struggle with consumer pressure and wage growth.
But he told shareholders that “there are a lot of things to be excited about this year.”
Dodd said: “This summer we have a festival of sport, starting with the Euros, Wimbledon and the Olympic Games, followed by the return of the autumn rugby internationals, which provides a fantastic opportunity given our rugby heritage.”
The group recommended a final dividend of 10.88 pence per share, resulting in year-on-year growth of 6 per cent for a total dividend of 21.76 pence.
Young’s shares fell 2.4 per cent to 964 pence late on Wednesday morning, having fallen more than 20 per cent in the last 12 months and more than 40 per cent in the last five years.
Analysts at Peel Hunt said Young’s suffers from “one of the lowest valuations in the pub sector”. despite being “one of the best-performing operators” thanks to “record customer scores” and “the lowest number of GM vacancies.”
The broker also expects Young’s net debt to fall over the next year, meaning the pub group “could be in a position to make further acquisitions over the next three years”.
Peel Hunt maintained its “buy” rating on Young’s shares with a price target of 1,400 pence.