Young’s has reported a “landmark year”, delivering industry-leading profitability.
Despite a challenging economic environment marked by persistent cost inflation, the company reported a robust financial performance for the 52 weeks ended April 1, 2024.
On a comparable 52-week basis, Young’s total revenue increased by 7.4% to £388.8m, while like-for-like revenue grew by 3.4%. The pub group achieved a record adjusted profit before tax of £49.4m, marking a 9.1% increase.
Adjusted EBITDA saw a 7.8% rise to £92.2m, and the managed house adjusted EBITDA increased by 7.1% to £112.7m.
Post-period end, trading remains positive, with total sales for the last nine weeks up 24.4%. Like-for-like sales increased by 2.4%, despite challenging weather conditions compared to the previous year.
“In a landmark year for Young’s, we have reported another excellent financial performance with industry leading profitability. This is once again testament to the excellent work and energy of our teams and our proven strategy of operating premium, individual, differentiated and well-invested pubs and bedrooms,” said CEO Simon Dodd.
The year started strong, bolstered by the King’s coronation bank holiday in May and strong trading in June as customers enjoyed gardens and outdoor spaces during hot weather. However, disappointing weather and rail strikes dampened summer months, despite the excitement of Wimbledon and the Women’s World Cup. Sales later surged with the return of the Rugby World Cup in September, particularly in Young’s heartland of southwest London.
Completing an acquisition of The City Pub Group on 4 March was a “pivotal moment” for the business, adding 55 wet-led pubs and 240 bedrooms to its estate, the largest transaction in Young’s history. This acquisition contributed £7.2m in revenue and £1.7m in EBITDA for the four weeks it was part of Young’s portfolio.
Reflecting on recent investments and acquisitions, Dodd said, “The investments, acquisitions, and City Pub Group transaction provide incredible long-term growth potential.”
“Young’s remains committed to maintaining its premium position in the pub sector with a strategy focused on operating premium, individual, and well-invested managed pubs and bedrooms.”
Looking ahead, Young’s anticipates the net debt to adjusted EBITDA ratio returning to more historical levels by the end of FY25, driven by a full year of additional EBITDA from the City Pub Group acquisition.
“We are making good progress integrating the brilliant teams from City Pubs,” Dodd added. “As they join the Young’s family, we will leverage their successes and insights to enhance our wider estate. I look forward to strengthening our collaboration and evolving our business over the coming years.”
During the 52-week period, drink sales continued to perform well, ahead of last year by 8.0% on a comparable 52-week basis, and up by 3.9% on a like-for-like basis over 52 weeks.
The growth in Guinness continues to lead the way in overall sales growth. Guinness defied the impact of seasonality by maintaining its popularity year-round, with sales up by 29% on last year, overtaking top sellers like Estrella and Peroni.
Meanwhile, food sales continued to grow, up 5.9% and 1.5% on a like-for-like 52-week basis.
Accommodation has become a major revenue driver for Young’s; total room revenue was up 10.2% for the period to £23.7 million. On a like-for-like basis over 52 weeks, room revenue was up by 7.7%, while like-for-like occupancy increased by 0.5% points and average room rates grew by £3.89.
Young’s has also made substantial investments in its existing estate, amounting to £84.5 million, which included £36.5 million for eight new acquisitions and £48.0 million for enhancing current pubs.
In London it added the Crooked Billet (Clapton), The Stag (Belsize Park) and Tattenham Corner (Epsom Downs) which is currently undergoing a major refurbishment before its planned reopening later this year.
It also acquired four strongly performing pubs from Marston’s: the Libertine (Westbourne), the White Hart (Ford), the White Lion (Tenterden) and the Huntsman (Brockenhurst), another new location for Young’s, as well as the Ship Inn (Noss Mayo).
Despite the challenges posed by ongoing cost inflation and economic uncertainty, Young’s remains optimistic about its future prospects. The company has planned several initiatives to leverage upcoming sporting events, including EURO 24, Wimbledon, and the Olympics, which are expected to drive customer engagement and revenue growth. Additionally, the return of the Autumn rugby internationals presents a significant opportunity given Young’s strong rugby heritage.
On the year ahead, Dodd said, “Looking ahead, we face some challenges, but there is plenty for us to be excited about this year.
“Our belief in Young’s long-term growth potential remains as good as ever, and we are confident of our performance in the year ahead,” he added.
The company’s solid balance sheet and consistent cash generation have supported a final dividend recommendation of 10.88 pence, resulting in a total dividend of 21.76 pence for the year, up 6.0%.
