Young’s toasted a record first half, as one of the sunniest summers on record, the FIFA World Cup and Wimbledon brought drinkers into its premium London pubs.
Revenue rose 10.4% to £291.1m in the 26 weeks to 28 September, with like-for-like sales up 6.4%, and the company’s prized operating margin widened 60 basis points to a sector-leading 16.0%. Adjusted pre-tax profit climbed 19.3% to a record £37.1m.
Investors should note the headline numbers flatter the underlying rate of progress in two ways: statutory pre-tax profit, which includes £3.7m of one-off costs such as fees for the Main Market move and the Cubitt House acquisition, rose a more modest 9.2% to £33.4m.
The notable 35.7% jump in adjusted earnings per share owes much to the group’s share buyback reducing the share count, rather than be driven purely by trading.
That said, take nothing away from the pub group’s performance. Pubs with gardens and riverside spots grew like-for-like sales 7.5%, England World Cup match days added roughly £4.8m of sales, and lager volumes jumped 20%.
Simon Dodd, Chief Executive of Young’s, said: “Boosted by excellent trading across the summer months, supported by record weather and the FIFA World Cup, Young’s has delivered another period of outstanding performance. Our relentless focus on quality meant that when the sun shone and the matches were aired, customers chose Young’s for our premium offer and the fantastic atmosphere created by our brilliant teams.”
However, as the weather boost fades, trading is already normalising with like-for-like growth slowing to 5.1% in the six weeks since period-end, from 7.9% in the final 13 weeks of the half.
The April acquisition of Cubitt House, a collection of nine upmarket London pubs in neighbourhoods such as Mayfair and Chelsea, has been integrated and is contributing, reinforcing Young’s strategy of buying premium, well-located sites.
Young’s dividend
The interim dividend was held at 12.22p following the Main Market move, as Young’s rebalances its payout towards a larger final dividend, moving over time to a one-third/two-thirds split.
With Christmas bookings running 11% ahead of last year and the autumn rugby internationals to come, the board expects full-year results in line with recently upgraded market forecasts.