TIDMYNGA
RNS Number : 9104F
Young & Co's Brewery PLC
10 November 2022
YOUNG & CO.'S BREWERY, P.L.C.
INTERIM RESULTS FOR THE 26 WEEKSED 26 SEPTEMBER 2022
ENCOURAGING RESULTS AS OUR TRADING MOMENTUM CONTINUED THROUGHOUT
THE PERIOD REFLECTING A WELCOME RETURN TO A NORMAL PUB
ENVIRONMENT
2022 2021 %
GBPm GBPm change
----------------------------------------- -------- -------- ------
Revenue(1) 186.5 149.6 +24.7
Adjusted operating profit(1) (3) 29.0 27.1 +7.0
Adjusted profit before tax(1) (3) 25.0 21.8 +14.7
Adjusted EBITDA(1 3) 45.0 42.7 +5.4
Net debt 168.1 140.3 -19.8
Net debt to EBITDA(1 2) 2.0x 3.6x -1.6x
----------------------------------------- -------- -------- ------
Operating profit(1) 27.9 27.5 +1.5
Profit before tax(1) 23.9 22.2 +7.7
----------------------------------------- -------- -------- ------
Net cash generated from operations 48.5 71.4 -32.1
Adjusted basic earnings per share(1) (3) 34.54p 28.22p +22.4
Basic earnings per share(1) 32.66p 17.96p +81.8
Interim dividend per share 10.26p 8.55p +20.0
Net assets per share GBP12.11 GBP11.16 +8.5
----------------------------------------- -------- -------- ------
1 The prior period results exclude trading from 56 sites which
formed a majority of the Ram Pub Company segment (sold in August
2021) and were disclosed in last period's interim results as
discontinued operations (see note 5).
2 Net debt (including lease liabilities) to EBITDA has been
calculated based on the last 12 months' actual adjusted EBITDA of
GBP84.8 million (see note 2 for adjusted EBITDA and note 9 for net
debt).
3 Reference to an "adjusted" item means that item has been
adjusted to exclude non-underlying items (see note 2 for adjusting
items and note 7 for earnings per share).
PERFORMANCE HIGHLIGHTS
-- Total revenue for the period was GBP186.5 million, with an
adjusted EBITDA of GBP45.0 million; managed house EBITDA for the
period was GBP55.5 million up GBP3.3 million against last year
-- Like-for-like revenue was ahead of same period in 2019 by
6.2%, and up by 20.4% against last year
-- Adjusted operating profit up 7.0% to GBP29.0 million,
delivering a margin of 15.5%, down from last year's 18.1% which
benefited significantly from the reduced 5% VAT rate (GBP8.2
million) and lower utility costs (GBP1.9 million on a like-for-like
basis)
-- Investment of GBP28.7 million in the period, including four
freehold acquisitions and GBP14.5 million invested in our existing
estate, with a further two acquisitions since the end of the
period
-- Healthy cash generation reduced the year-end net debt by GBP5.7 million to GBP168.1 million
-- Interim dividend of 10.26 pence per share, an increase of
20.0% (1.71 pence) against the last interim dividend
-- Since the period end, managed house revenue for the last 13
weeks was ahead of last year by 6.6%; on a like-for-like basis up
2.0% on last year and ahead of 2019 comparatives by 5.5%
-- A balance sheet that supports our strategy, with the
financial capacity for continued capital investment
Simon Dodd, Chief Executive of Young's, commented:
"I am very pleased with the performance of the business and the
hard work of our teams in the first half of the year. This has been
the first time in three years we have been able to report on a
period without any covid related trading restrictions, with the
business returning to normality.
Recent trading has been robust despite all the economic
uncertainty, and we continue to see our pubs in Central London and
the City bounce back as workers and tourists return, like-for-like
sales since the end of the period were up against last year by
22.0% and 11.1% respectively.
We have continued to reinvest the funds generated by the sale
last year of our tenanted estate, with the welcome addition of four
fantastic freehold pubs combined with the two recent acquisitions,
the Carpenters Arms (Tonbridge) and the Griffin Inn (Fletching),
both wonderful freehold pubs with rooms.
Bookings are already strong for our first full trading Christmas
in three years, which follows closely after the football World Cup.
Although we are conscious of the current macroeconomic conditions,
we have fixed contracts for both drinks and utilities, and, whilst
not immune to the external cost pressures across our supply chain,
we are taking steps to mitigate as far as possible.
Our strategy of operating premium, individual and well-invested
managed pubs is unchanged, and we are confident that it will
continue to deliver superior returns for our shareholders."
For further information, please contact:
Young & Co.'s Brewery, P.L.C. 020 8875 7000
Simon Dodd, Chief Executive
Michael Owen, Chief Financial Officer
MHP Communications 020 3128 8742 / 8147
Tim Rowntree/Robert Collett-Creedy
INTERIM STATEMENT
I am pleased to report a strong set of results, with our
positive trading momentum continuing throughout the first half of
the financial year.
For the 26 weeks our total revenue was up 24.7% to GBP186.5
million (2021: GBP149.6 million), with adjusted profit before tax
up 14.7% to GBP25.0 million (2021: GBP21.8 million), reflecting a
welcome return to a normal pub trading environment. Managed
like-for-like sales were ahead of last year by 20.4% and 6.2%
higher than the same period in 2019.
We have continued to invest the proceeds from the sale of our
tenanted businesses last year, with total capital investment of
GBP28.7 million in the period, including the addition of four
freehold acquisitions. Three of these acquisitions, the Bedford
Arms Hotel (Rickmansworth), Merlin's Cave (Chalfont St Giles) and
the Half Moon (Windlesham) have created the opportunity to
introduce Young's to new trading regions. In September we purchased
our fourth pub, when we exercised our option to acquire the Wild
Duck (Ewen) from the Lucky Onion Group, in addition to the six
businesses we purchased from them in February, further
strengthening our established position in the Cotswolds.
The valuable role our pubs play in their communities, once again
proved vital in recent months by providing such a unique
environment, bringing people together whatever the occasion. In
this historic summer, we both enjoyed and endured prolonged periods
of hot weather, something that our exceptional gardens and outdoor
spaces were perfectly placed to capitalise on. The two additional
bank holidays for the Queen's jubilee and funeral marked poignant
moments of national celebration and mourning, yet for both, the pub
was the perfect setting to raise a glass or two to honour our late
sovereign. Despite the effect of the rail strikes, which inevitably
had an adverse impact on our trade, the positive performance of our
great pubs after two extremely challenging years has been hugely
encouraging.
I am both honoured and delighted to take over the reins as CEO
of Young's and to have the opportunity to continue to grow such a
wonderful and unique business. Once again, I would like to thank
Patrick for his guidance since I joined and for his enormous
contribution to the company over the past 20 years. In September,
we also welcomed Mark Loughborough to the board, following his
promotion to Retail Director. Mark has been with Young's for 11
years in a number of senior roles, most recently as Senior Director
of Operations. His promotion underlines our commitment to a
succession plan that places value on fostering internal
development.
The board has decided to raise the interim dividend by 20.0% to
10.26 pence per share (2021: 8.55 pence per share), and this is
expected to be paid on 2 December 2022 to shareholders on the
register at close of business on 18 November 2022.
BUSINESS REVIEW
Total managed house revenue for the period was GBP186.1 million
(2021: GBP148.9 million), up 25.0% compared with the gradual
unwinding of restrictions last year. We ended the period with 223
managed houses, including 37 hotels, which is up from 219 at the
end of the last period. Adjusted operating profit attributable to
our managed houses was up 7.8% to GBP40.0 million (2021: GBP37.1
million). Operating profit growth against prior year has been
challenged by significant headwinds, such as the return to a
normalised VAT rate (GBP8.2 million) and increased utility costs
(GBP1.9 million on a like-for-like basis).
Drink sales were the main beneficiary from the softer
comparatives in the early months of last year, with total drink
sales up 30.5%, or 28.0% on a like-for-like basis. In April, we
launched our new draft range, introducing Brooklyn Pilsner and
Pravha, as well as two exciting new ales from Beavertown: Young Sun
- their new keg pale ale - and Rocket Ram, a seasonal special cask
ale. As spring made way to summer, our exceptional gardens,
riverside pubs and well-invested estate offered the perfect relief
from the scorching temperatures. The timely return of Aspall as our
premium draft cider, helped drive growth in the total cider
category, with sales up 61.9%. Draught lager was the other standout
category, up by 29.6% against last year.
Food sales in the period were set against some strong prior year
comparatives that were boosted by last year's VAT benefit. Despite
this, our food sales were up 7.0% in total, equating to 1.5% on a
like-for-like basis, and up by 8.8% compared to 2019. Our focus on
fresh, seasonal and locally sourced British ingredients with
dynamic menus tailored to the individual pub, underscored by our
core classics, continues to pay dividends. Against the backdrop of
well documented cost pressures, we have taken steps to consolidate
and tease out efficiencies in our supply chain. Alongside this, our
executive chef team created the Young's Recipe Book, full of
inspiring dishes for our chefs to draw upon to ensure our food
remains consistent, authentic and premium.
Over the course of the last 18 months, we have added a further
132 bedrooms to our estate, ending the period with a total room
stock of 820. This recent investment coincided with a timely
increase in hotel demand during the period, with strong occupancies
and average room rates enjoyed across all geographies. The trend
for holidaying in the UK remained positive, alongside a pickup in
foreign travel towards the end of the period. Despite no longer
benefitting from the reduced VAT rates of last year, total hotel
sales were up 109.1% with like-for-like sales up by 72.7%. RevPAR
was up to GBP77.11 compared with GBP59.48 last year.
Despite the impact of rail strikes and extra bank holidays,
Central London and City areas continued to bounce back with
returning workers and tourists, with sales returning to 2019 levels
and growing by 81.4% and 46.5% respectively on the comparative
period last year. Our more food orientated pubs and hotels in the
Home Counties and West Country have understandably seen sales drop
back compared to last period, a reflection of last year's lower VAT
rates, but in a testament to how far these businesses have moved
forward, like-for-like sales were 7.4% and 12.2% ahead of 2019
respectively.
At the start of the financial year, we introduced Young's to the
Chilterns, with the purchase of the Bedford Arms Hotel
(Rickmansworth). This impressive 18(th) century pub with 18 rooms
boasts period features throughout, a characterful front terrace and
a wonderful garden. Our second acquisition, Merlin's Cave, in the
nearby affluent commuter town of Chalfont St Giles, opened in
August following significant investment. The pub has an outstanding
garden bordering the River Misbourne, combined with a picturesque
setting on the village green. We later purchased the Half Moon in
Windlesham, which was held by its previous stewards for 113 years
and is a fine example of a characterful country pub, complete with
a large south facing garden. Our acquisition of the Wild Duck, near
Cirencester, adds further to our future growth pipeline. In recent
years, this impressive site has been closed as part of a monumental
back-to-brick renovation and, following our extensive investment,
will reopen as another premium Young's pub in the heart of the
Cotswolds.
Core to Young's strategy has been growth through acquisition
while maintaining the highest degrees of investment within our
existing estate. During the period, we invested GBP5.2 million
completing major projects at the Coborn (Bow), Crown (Bow), East
Hill (Wandsworth), Halfway House (Earlsfield) and the Phoenix
(Victoria), together with some smaller projects at the Blue Boar
(Chipping Norton), Dunstan House (Burnham-on-Sea) and the Orange
Tree (Richmond). Alongside these projects we also invested GBP7.2
million for the ongoing maintenance of our pub estate.
INVESTMENT AND FINANCE
The adjusted earnings per share has risen by 22.4% to 34.54
pence largely due to the impact of the change in corporation tax
rate in the prior period.
At the period end, our net debt reduced to GBP168.1 million from
GBP173.8 million at the year-end, with a positive net cash flow
from operations of GBP48.5 million. During the prior interim period
our net cash flow from operations was GBP71.4 million due to the
large movement in working capital following the reopening of our
pubs after a period of lockdown. Our net debt excluding lease
liabilities sits at GBP96.0 million. Based on the last twelve
month's adjusted EBITDA of GBP86.9 million, our net debt (including
lease liabilities) to EBITDA ratio has now reduced to 2.0 times
(March 2022: 2.1 times). Our cash balance of GBP39.0 million and
drawn down debt of GBP135.0 million provides us with debt headroom
of GBP139.0 million.
Period adjusting items were a cost totalling GBP1.1 million
compared with profit of GBP0.4 million last interim period. We
incurred purchase costs of GBP0.8 million relating to the four
acquisitions made in the period as well as tenant compensation of
GBP0.3 million for the termination of a lease at an unlicensed
property, that formed part of our existing freehold interest at the
Village Inn (Ealing).
The methodology and assumptions prescribed for the purposes of
IAS 19 Pensions accounting mean that the balance sheet surplus or
deficit are inherently volatile and will vary greatly according to
investment market conditions at each accounting date. In recent
months, the uncertainty and market turbulence due to the economic
climate has led to an increase in the discount rate used to 5.6%
(March 2022: 2.8%), as well as a decrease in corporate bond yields,
the rate at which our pension liabilities are discounted. This has
resulted in the net surplus position of our retirement benefit
schemes to reduce by GBP12.0 million to GBP0.2 million since the
year-end.
ESG
As a group, we are committed to operating sustainably and to
continuously find ways to reduce our carbon footprint. Our managed
pubs are at the heart of their communities in which we operate,
bringing people together and giving us the opportunity to improve
the wellbeing of both our teams and our customers.
As a founding member of the Zero Carbon Forum, a group which has
created a "Roadmap for Hospitality to Net Zero" we have aligned
ourselves with the industry's roadmap to become net zero across
scope 1, 2 and 3 emissions by 2040. We actively participate in
their action groups, sharing ideas, collaborating, and collectively
working towards a net zero future. Taking advice from our partners
at Savills Earth, we have grouped our properties based on age,
condition, servicing, and heritage status to guide our net zero
implementation plans. In May, we launched the "Save While You
Sleep" initiative in partnership with the Zero Carbon Forum, to
guide and encourage energy saving opportunities through operational
best practice.
We are passionate about seasonal, premium and sustainable
British produce. In September, we launched our "Food for Thought"
dinner series in partnership with Plymouth Gin, further building on
our support of the Ocean Conservation Trust. Menus were based
around invasive, underutilised and abundant foodstuffs from the UK
to encourage diners to be mindful about their food choices, and
include ingredients such as goat, seaweed, Dorset snails and wood
pigeon.
Further information about our ESG initiatives and our evolving
sustainability strategy will be provided in our 2023 Annual
Report.
CURRENT TRADING AND OUTLOOK
Recent trading continues to show robust performance despite all
the economic uncertainty, with total sales for the last 13 weeks up
by 6.6% and up by 2.0% on a like-for-like basis. Against our
comparatives in 2019, managed like-for-like sales were up by
5.5%.
We are looking to the rest of the year with positivity. London
continues to return to more normal levels of trade with the City up
by 11.1% on last year. Christmas bookings are looking strong, and
we are excited by the prospect of our first full trading Christmas
for three years on the back of the football World Cup, which begins
in November. Our enhanced outdoor spaces, with comfortable heated
areas, positions us perfectly for a prosperous Christmas and New
Year.
Since the period end, we have completed two individual freehold
acquisitions, adding the Carpenters Arms (Tonbridge) in Kent and
the award-winning Griffin Inn (Fletching), in Sussex. These two
premium pubs with rooms perfectly complement our existing estate
and further extend Young's into new territories. We also reached an
agreement with our tenants of Boisdales (Bishopsgate) for the early
termination of the lease. Following a minor investment this will
add to our City presence and provide additional trade in the lead
up to Christmas. We continue to invest in our existing estate to
ensure our pubs remain premium, individual and differentiated with
projects recently completed at the Brook Green Hotel (Hammersmith),
Bull (Streatham), and the Hammersmith Ram (Hammersmith).
However, during these uncertain times, we remain mindful of the
potential impact that macroeconomic factors may have on consumer
sentiment. We are also conscious of the impact further rail strikes
could have on trade in the buildup to the festive period, an
important time of year for the hospitality sector. We are hopeful
that a suitable resolution for both sides can be reached in a
timely manner. The steps we took last year to protect our business
by forward purchasing our energy through to the end of March 2024
has limited the impact from utility cost increases. We are not
immune to the external cost pressures across our supply chain, but
we are taking steps to mitigate, as far as possible, the impact of
the current inflationary environment on our cost base. Following
the recent appointment of the new Prime Minister, we now hope for a
period of stability and will closely monitor for any future policy
changes from the UK Government.
Young's is a long-term business having traded for over 191
years. Our well invested pub estate with an asset value of GBP824.1
million, underpins the significant recovery potential post covid
which includes unlocking further value from our recent investments.
The business is cash generative with a robust balance sheet. We
have a long track record of delivering results and our
differentiated offering has helped us face the most demanding
market conditions in the past. We remain focused on maintaining our
premium position within the pub sector and are confident in our
winning strategy of operating premium, individual and well-invested
managed pubs, crucial to our continuing success and the delivery of
superior returns for our shareholders.
Simon Dodd
Chief Executive
9 November 2022
Group income statement
For the 26 weeks ended 26 September 2022
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
Notes GBPm GBPm GBPm
--------------------------------------- ----- --------- --------- ---------
Continuing operations
Revenue 3 186.5 149.6 309.0
Other income 4 - 3.8 5.0
Operating costs before adjusting
items (157.5) (126.3) (262.6)
--------------------------------------- ----- --------- --------- ---------
Adjusted operating profit 29.0 27.1 51.4
Adjusting items 2 (1.1) 0.4 0.3
--------------------------------------- ----- --------- --------- ---------
Operating profit 27.9 27.5 51.7
Finance costs (4.2) (5.2) (9.5)
Finance credit/(charge) for pension
obligations 12 0.2 (0.1) (0.1)
--------------------------------------- ----- --------- --------- ---------
Profit before tax from continuing
operations 23.9 22.2 42.1
Income tax expense 6 (4.8) (11.7) (17.2)
--------------------------------------- ----- --------- --------- ---------
Profit after tax for the period
from continuing operations 19.1 10.5 24.9
--------------------------------------- ----- --------- --------- ---------
Discontinued operations(1)
Profit after tax for the period
from discontinued operations 5 - 9.5 9.5
--------------------------------------- ----- --------- --------- ---------
Profit for the period attributable
to shareholders of the parent company 19.1 20.0 34.4
--------------------------------------- ----- --------- --------- ---------
(1) Discontinued operations during the 52 week period ended 28 March
2022 related to the sale of 56 tenanted pubs.
Pence Pence Pence
------------------------------------------ ------ ----- -----
Earnings per 12.5p ordinary share
Basic 7 32.66 34.20 58.83
Diluted 7 32.64 34.20 58.80
------------------------------------------ ------ ----- -----
Earnings per 12.5p ordinary share for continuing
operations
Basic 7 32.66 17.96 42.58
Diluted 7 32.64 17.95 42.56
------------------------------------------ ------ ----- -----
Group statement of comprehensive income
For the 26 weeks ended 26 September 2022
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
Notes GBPm GBPm GBPm
------------------------------------------ ----- ---------- ---------- ----------
Profit for the period 19.1 20.0 34.4
------------------------------------------ ----- ---------- ---------- ----------
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss:
Unrealised gain on revaluation of
property - - 28.7
Remeasurement of retirement benefit
schemes 12 (12.8) 1.1 17.2
Tax on above components of other
comprehensive income 6 3.2 (14.9) (25.3)
Items that will be reclassified
subsequently to profit or loss:
Fair value movement of interest rate
swaps 6.2 1.2 5.2
Tax on fair value movement of interest
rate swaps 6 (1.5) (0.1) (1.1)
------------------------------------------ ----- ---------- ---------- ----------
(4.9) (12.7) 24.7
Total comprehensive income attributable
to shareholders of the parent company 14.2 7.3 59.1
------------------------------------------------- ---------- ---------- ----------
Total comprehensive income/(loss) attributable
to shareholders of the parent company from
continuing operations
-------------------------------------------------
14.2 (2.2) 49.6
------------------------------------------ ----- ---------- ---------- ----------
Total comprehensive income attributable
to shareholders of the parent company from
discontinued operations - 9.5 9.5
------------------------------------------------- ---------- ---------- ----------
Group balance sheet
At 26 September 2022
Restated Restated
Unaudited unaudited audited
at 26 Sep at 27 Sep at 28 Mar
2022 2021 2022
Notes GBPm GBPm GBPm
----------------------------------- ------ --------- --------- ---------
Non-current assets
Goodwill 11 32.5 32.5 32.5
Property and equipment 10 824.1 732.7 808.0
Right-of-use assets 11 145.0 149.0 147.0
Derivative financial instruments 5.4 - 2.2
Retirement benefit schemes 12 1.8 - 14.3
----------------------------------- ------ --------- --------- ---------
1,008.8 914.2 1,004.0
----------------------------------- ------ --------- --------- ---------
Current assets
Inventories 5.4 4.3 4.7
Trade and other receivables 7.7 3.9 8.9
Income tax receivable 6.0 6.5 6.2
Derivative financial instruments 2.6 - -
Cash 39.0 68.2 34.0
----------------------------------- ------ --------- --------- ---------
60.7 82.9 53.8
----------------------------------- ------ --------- --------- ---------
Total assets 1,069.5 997.1 1,057.8
----------------------------------- ------ --------- --------- ---------
Current liabilities
Borrowings (30.0) - (30.0)
Lease liabilities 11 (5.2) (4.9) (4.9)
Derivative financial instruments - (1.6) (0.3)
Trade and other payables (48.6) (39.3) (43.7)
(83.8) (45.8) (78.9)
----------------------------------- ------ --------- --------- ---------
Non-current liabilities
Borrowings (104.0) (133.7) (103.8)
Lease liabilities 11 (67.9) (69.9) (69.1)
Derivative financial instruments - (0.4) -
Deferred tax liabilities (104.1) (90.0) (104.2)
Retirement benefit schemes 12 (1.6) (4.5) (2.1)
(277.6) (298.5) (279.2)
----------------------------------- ------ --------- --------- ---------
Total liabilities (361.4) (344.3) (358.1)
----------------------------------- ------ --------- --------- ---------
Net assets 708.1 652.8 699.7
----------------------------------- ------ --------- --------- ---------
Capital and reserves
Share capital 13 7.3 7.3 7.3
Share premium 13 7.8 7.7 7.7
Capital redemption reserve 1.8 1.8 1.8
Hedging reserve 6.4 (1.3) 1.7
Revaluation reserve 249.4 228.2 249.4
Retained earnings 435.4 409.1 431.8
----------------------------------- ------ --------- --------- ---------
Total equity 708.1 652.8 699.7
----------------------------------- ------ --------- --------- ---------
Prior period comparatives have been restated (see note 1).
Group statement of changes in equity
For the 26 weeks ended 26 September 2022
Share Capital
capital redemption Hedging Revaluation Retained Total
Notes and premium reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------------ ----------- -------- ----------- --------- -------
At 28 March 2022 15.0 1.8 1.7 249.4 431.8 699.7
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Total comprehensive income
Profit for the 26 week period - - - - 19.1 19.1
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Other comprehensive income
Remeasurement of retirement
benefit
schemes 12 - - - - (12.8) (12.8)
Fair value movement of interest
rate swaps - - 6.2 - - 6.2
Tax on above components of
other
comprehensive income 6 - - (1.5) - 3.2 1.7
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Total comprehensive income - - 4.7 - 9.5 14.2
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Transactions with owners recorded directly
in equity
Issued equity 13 0.1 - - - - 0.1
Dividends paid on equity shares - - - - (6.0) (6.0)
Share based payments - - - - 0.1 0.1
0.1 - - - (5.9) (5.8)
At 26 September 2022 15.1 1.8 6.4 249.4 435.4 708.1
-------------------------------- ------------ ----------- -------- ----------- --------- -------
At 29 March 2021 14.9 1.8 (2.4) 253.6 377.5 645.4
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Total comprehensive income
Profit for the 26 week period - - - - 20.0 20.0
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Other comprehensive income
Remeasurement of retirement
benefit
schemes 12 - - - - 1.1 1.1
Fair value movement of interest
rate swaps - - 1.2 - - 1.2
Tax on above components of
other
comprehensive income 6 - - (0.1) (16.5) 1.6 (15.0)
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Total comprehensive income - - 1.1 (16.5) 22.7 7.3
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Transactions with owners recorded directly
in equity
Issued equity 13 0.1 - - - - 0.1
Revaluation reserve realised
on disposal of properties - - - (8.9) 8.9 -
0.1 - - (8.9) 8.9 0.1
-------------------------------- ------------ ----------- -------- ----------- --------- -------
At 27 September 2021 15.0 1.8 (1.3) 228.2 409.1 652.8
-------------------------------- ------------ ----------- -------- ----------- --------- -------
Group statement of cash flow
For the 26 weeks ended 26 September 2022
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
Notes GBPm GBPm GBPm
------------------------------------------- ------ ---------- --------- ---------
Operating activities
Net cash generated from operations 9 48.5 71.4 107.0
Tax paid (3.0) (2.9) (5.1)
------------------------------------------- ------ ---------- --------- ---------
Net cash flow from operating activities 45.5 68.5 101.9
------------------------------------------- ------ ---------- --------- ---------
Investing activities
Proceeds from disposal of property
and equipment(1) - 54.4 59.7
Purchases of property and equipment 10 (18.9) (13.1) (36.9)
Business combinations, net of cash
acquired 10 (9.8) - (36.9)
Net cash used in investing activities (28.7) 41.3 (14.1)
------------------------------------------- ------ ---------- --------- ---------
Financing activities
Issued equity, net of transaction
costs 13 0.1 0.1 (9.7)
Interest paid (2.4) (4.5) 0.1
Equity dividends paid (6.0) - (5.0)
Payments of principal portion of
lease liabilities (3.5) (1.9) (4.1)
Repayments of borrowings(2) - (40.0) (39.8)
Net cash flow used in financing
activities (11.8) (46.3) (58.5)
------------------------------------------- ------ ---------- --------- ---------
Increase in cash 5.0 63.5 29.3
Cash at the beginning of the period 34.0 4.7 4.7
------------------------------------------- ------ ---------- --------- ---------
Cash at the end of the period 39.0 68.2 34.0
------------------------------------------- ------ ---------- --------- ---------
(1) During the prior 52 week period to 28 March 2022 GBP53.0 million
related to the sale of 56 tenanted pubs (see note 5). The remaining balance
related to other disposals of tenanted sites.
(2) During the prior 52 week period to 28 March 2022 the group repaid
GBP30.0 million of Covid Corporate Financing Facility and GBP10.0 million
Revolving Credit Facility.
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTS
This interim report was approved by the board on 9 November
2022. The interim financial statements are unaudited and are not
the group's statutory accounts as defined in s.434 of the Companies
Act 2006.
The accounting policies used in the preparation of the
consolidated interim financial statements are in accordance with
the recognition and measurement criteria of international
accounting standards in conformity with the requirements of the
Companies Act 2006 (UK-adopted International Accounting Standards).
These standards are applied from 29 March 2022 with no changes to
the accounting policies set out in the statutory accounts of Young
& Co.'s Brewery, P.L.C. for the period ended 28 March 2022
(IFRS), except for those noted below. The financial statements have
not been prepared (and are not required to be prepared) in
accordance with IAS 34: 'Interim Financial Reporting', with the
exception of note 6, taxation, where the tax charge for the half
year to 26 September 2022 has been calculated using an estimate of
the full year effective tax rate, in line with the principles of
IAS 34. The accounting policies have been applied consistently
throughout the group for the purposes of preparation of this
financial information.
The interim report is presented in pounds sterling and all
values are shown in millions of pounds (GBPm) rounded to the
nearest GBP0.1 million, except where otherwise indicated.
Statutory accounts for the period ended 28 March 2022 have been
delivered to the Registrar of Companies. The auditor's report on
those accounts was unqualified and did not contain any reference to
any matters to which the auditor drew attention by way of emphasis
without qualifying the report. Further, that report did not contain
a statement under s.498(2) or (3) of the Companies Act 2006.
This interim report has been prepared in accordance with the AIM
Rules issued by the London Stock Exchange.
Restatement of prior periods
In accordance with the requirements of IAS 12: Income Taxes,
management has restated the deferred tax assets as at 28 March 2022
and 27 September 2021 to be presented net against the deferred tax
liabilities. The impact on the group balance sheet at 28 March 2022
is a reduction in the deferred tax asset of GBP4.1 million to
GBPnil and a decrease in the deferred tax liability of GBP4.1
million to GBP104.2 million. This reduces the non-current asset
subtotal by GBP4.1 million to GBP1,004.0 million and the
non-current liability subtotal by GBP4.1 million to GBP279.2
million. The total assets are reduced by GBP4.1 million to
GBP1,057.8 million and the total liabilities are reduced by GBP4.1
million to GBP358.1 million. The overall impact on net assets is
GBPnil. The impact on the unaudited group balance sheet at 27
September 2021 is a reduction in the deferred tax asset of GBP6.3
million to GBPnil and a decrease in the deferred tax liability of
GBP6.3 million to GBP90.0 million. This reduces the non-current
asset subtotal by GBP6.3 million to GBP914.2 million and the
non-current liability subtotal by GBP6.3 million to GBP298.5
million. The total assets are reduced by GBP6.3 million to GBP997.1
million and the total liabilities are reduced by GBP6.3 million to
GBP344.3 million. The overall impact on net assets is GBPnil. There
is no impact to the income statement or cash flow statement in any
period presented as a result of this adjustment.
NEW ACCOUNTING STANDARDS AND ACCOUNTING POLICIES
Other standards
The directors have adopted the following Standards, Amendments
and Interpretations listed below for the first time during the
period. The adoption of these amendments has not had a material
impact on the interim financial statements of the group:
(1) Amendments to IAS 16 - Property, Plant and Equipment:
Proceeds before Intended Use - effective 1 January 2022;
(2) Amendments to IAS 37 - Onerous Contracts - Costs of
Fulfilling a Contract - effective 1 January 2022;
(3) Amendments to IFRS 3 - Reference to the Conceptual Framework
- effective 1 January 2022.
GOING CONCERN
At 26 September 2022, the group had cash in bank of GBP39.0
million and committed borrowing facilities of GBP235.0 million, of
which GBP135.0 million was drawn down. No board decision has been
made on whether to replace the GBP30.0 million term loan that is
due for renewal at the end of March 2023. On this basis, for going
concern purposes, the group has assumed that available facilities
will be GBP205.0 million at the end of the going concern period. In
addition to these committed facilities, the group has a GBP10.0
million overdraft with HSBC, which is not committed, and is
therefore not assumed to continue for the purpose of this
assessment.
As part of the directors' consideration of the appropriateness
of adopting the going concern basis, the group has modelled a base
case and three sensitised scenarios for the going concern period,
which is defined as the 12-month period from the date of approval
of these financial statements to 27 November 2023.
The base case is the board approved forecast to March 2023 as
well as the board approved strategic plan covering April to
November 2023, updated to reflect current cost inflation. The key
judgements applied are the extent of any influence on trade because
of the current economic downturn and its impact on consumers, and
the inflationary cost pressures that the hospitality industry is
currently facing. The base case model assumes the group continues
to trade as now whilst reflecting the inflationary environment that
currently exists across the going concern period. The general
reduction in trade scenario looks at a decline of 20% in sales and
25% in profit across the period. This aims to capture the potential
slowdown in consumer spending influenced by the current cost of
living crisis. The cost inflation scenario includes an average 8%
increase in the food cost base and 10% increase in general pub
operating costs for the period with no retail price increases.
Utility pricing has been held at the base case rates, given the
group has forward bought utilities to March 2024. The group has
assumed capital expenditure levels will continue at historical
levels and no structural changes to the business will be needed in
any of the scenarios modelled.
In the base case; general reduction in trade; and cost inflation
scenarios there continues to be significant headroom on the group's
debt facilities, and all banking covenants are fully complied with
throughout the going concern period.
The reverse stress test focused on the decline in sales and
profit that the group would be able to absorb before breaching any
financial covenants or indeed any liquidity issues (the former
being the main stress point given the debt headroom). There would
need to be a sales reduction of c.45% and profit reduction of c.55%
between December 2022 and October 2023 compared to the base case, a
reduction far in excess of those experienced historically (with the
exception of the restricted covid-19 period), before there is a
breach of financial covenants in the period and is calculated
before reflecting any mitigating actions such as reduced capital
expenditure.
The group has also considered the impact of climate change on
going concern and has determined that there is no impact on the
business during the going concern period. Aligned with the group's
developing ESG strategy this will continue to feature in future
assessments, as the group determines the potential wider impact on
the asset base, capital expenditure and cost of compliance.
Based on these forecasts and sensitivities, coupled with the
current debt levels and the ongoing debt structure in place, the
board is confident that the group is able to manage its business
risks and therefore continue in operational existence for the
foreseeable future. For this reason, the group continues to adopt
the going concern basis in preparing its interim financial
statements.
2. ADJUSTING ITEMS AND OTHER FINANCIAL MEASURES
The table shows adjusting items from continuing
operations.
During the period the cash flow impact of adjusting items was GBP1.1
million (for the period ended 27 September 2021: GBP1.8 million).
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
GBPm GBPm GBPm
--------------------------------------------------- ---------- ---------- ----------
Amounts included in operating profit
Purchase costs(1) (0.8) (0.1) (2.7)
Tenant compensation(2) (0.3) (0.2) (0.2)
Net profit on disposal of properties(3) - 0.7 2.4
Upward movement on the revaluation of properties
(note 10)(4) - - 5.5
Downward movement on the revaluation of properties
(note 10)(4) - - (4.7)
--------------------------------------------------- ---------- ---------- ----------
(1.1) 0.4 0.3
--------------------------------------------------- ---------- ---------- ----------
Tax attributable to above adjusting items - (0.3) (0.6)
Impact of change in corporation tax rate(5) - (6.1) (6.9)
--------------------------------------------------- ---------- ---------- ----------
- (6.4) (7.5)
--------------------------------------------------- ---------- ---------- ----------
Total adjusting items after tax (1.1) (6.0) (7.2)
--------------------------------------------------- ---------- ---------- ----------
During the prior period tenant compensation and purchase costs related
to managed houses. Net profit on disposal of properties related to tenanted
houses. For adjusting items from discontinued operations see note 5.
(1) Purchase costs related to professional fees and stamp duty
land tax arising on the acquisition of the Bedford Arms
(Rickmansworth), Merlin's Cave (Chalfont St Giles) and the Half
Moon (Windlesham). During the previous 52 week period to 28 March
2022, costs related to the purchase of the Bull (Ditchling),
Pheasant Inn (Lambourn), the White Horse (Hascombe), the freehold
of the Lamb (Bloomsbury) and the Lucky Onion group, a group of six
sites acquired on 21 February 2022. This also included lease
extensions of the Cherry Tree (Dulwich), East Hill (Wandsworth) and
Riverside House (Wandsworth). These included legal and professional
fees and stamp duty land tax.
(2) Tenant compensation was paid to the tenants of an unlicensed
property (Ealing) to terminate their lease agreement early. During
the previous 52 week period to 28 March 2022, tenant compensation
of GBP0.2 million was paid to previous tenants of the Grand
Junction Arms (Harlesden) to terminate their lease agreement
early.
(3) During the previous 52 week period to 28 March 2022, the
profit on disposal of properties related to the difference between
cash, less disposal costs, received from the sale of the Lord
Wargrave (Marylebone) and Grove House (Camberwell) and the carrying
value of their assets, including goodwill, at the dates of
disposal, and the surrender premium related to the lease of Prince
William Henry (Southwark).
(4) The net upward movement on the revaluation of properties in
the previous 52 week period to 28 March 2022 related to net upward
movements in excess of amounts recognised in equity. See note 11(1)
in the statutory accounts for the period ended 28 March 2022 for
further details.
(5) An increase in the corporation tax rate from 19% to 25%,
with effect from 1 April 2023, was announced in the March 2021
Budget, and substantively enacted on 24 May 2021. This has resulted
in an increase in the deferred tax liabilities and assets of the
group, to the extent they are not expected to reverse prior to 1
April 2023, with a net charge of GBP6.1 million associated with the
rate change. This was recognised as an adjusting item in the tax
charge for the 52 week period to 28 March 2022 as it was unrelated
to the underlying trading activities of the group.
Other financial measures
The table below shows how adjusted EBITDA, adjusted operating
profit and profit before tax have been arrived at. These
alternative performance measures have been provided as the board
believes that they give useful additional measures of the group's
underlying performance and are the measures that the board uses to
assess the group's performance. Other financial measures in the
prior periods exclude discontinued operations.
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
GBPm GBPm GBPm
------------------------------------------------- ---------- --------- ----------
Profit before tax 23.9 22.2 42.1
Adjusting items 1.1 (0.4) (0.3)
------------------------------------------------- ---------- --------- ----------
Adjusted profit before tax 25.0 21.8 41.8
Net finance costs 4.2 5.2 9.5
Finance (credit)/charge for pension obligations (0.2) 0.1 0.1
------------------------------------------------- ---------- --------- ----------
Adjusted operating profit 29.0 27.1 51.4
Depreciation and amortisation 16.0 15.6 31.1
------------------------------------------------- ---------- --------- ----------
Adjusted EBITDA 45.0 42.7 82.5
------------------------------------------------- ---------- --------- ----------
During the period, GBP40.0 million of adjusted operating profit related
to managed houses (in the period ended 27 September 2021: GBP37.1 million).
Adjusted operating loss of GBP11.0 million mainly related to head office
costs and was unallocated (in the period ended 27 September 2021: GBP10.0
million).
During the period, GBP55.5 million of adjusted EBITDA related to managed
houses (in the period ended 27 September 2021: GBP52.2 million). Adjusted
negative EBITDA of GBP10.5 million mainly related to head office costs
and was unallocated (in the period ended 27 September 2021: GBP9.5 million).
3. REVENUE
The recognition of revenue from continuing operations under each of the
group's material revenue streams is as follows:
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
GBPm GBPm GBPm
----------------------------------------------- ----------- --------- ----------
Sales of goods 174.7 143.6 295.9
Accommodation sales 11.5 5.5 12.3
----------------------------------------------- ----------- --------- ----------
Total revenue from contracts with customers 186.2 149.1 308.2
Rental income 0.3 0.5 0.8
----------------------------------------------- ----------- --------- ----------
Total revenue recognised 186.5 149.6 309.0
----------------------------------------------- ----------- --------- ----------
During the period, GBP186.1 million of revenue related to managed houses
and GBP0.4 million was unallocated (in the prior period ended 27 September
2021: GBP148.9 million and GBP0.7 million respectively). Unallocated
income related to tenanted income and rental income derived from unlicensed
properties.
4. GOVERNMENT GRANTS AND ASSISTANCE
During the prior period, the group was eligible for a number of government
grant schemes which were introduced to mitigate the impact of covid-19.
The impact of each scheme on the income statement was as follows:
26 weeks 26 weeks 52 weeks
to 26 to 28
Sep to 27 Sep Mar
2022 2021 2022
Income statement line
Government grant scheme impacted GBPm GBPm GBPm
--------------------------- ------------------------ -------- --------- --------
Government grant income Other income - 3.8 5.0
Coronavirus Job Retention Operating costs before
Scheme ('CJRS') adjusting items - 2.6 2.2
--------------------------- ------------------------ -------- --------- --------
Total government grants
rereceived - 6.4 7.2
----------------------------------------------------- -------- --------- --------
The table above shows government grants related to continuing operations.
During the prior period, the group continued to take advantage
of the business rate holiday, saving GBP3.7 million, further
business rate relief under the expanded retail discount, saving
GBP0.7 million and reduced 5% VAT on eligible sales.
There were no such amounts relevant to the 26 week period to 26
September 2022.
5. DISCONTINUED OPERATIONS
On 2 July 2021, the board made the decision to sell most of its
tenanted estate, and the 56 sites were classified as a discontinued
operation. The disposal for a total consideration of GBP53.0
million occurred during the prior 52 week period to 28 March 2022
and was consistent with the group's strategy to target growth
through investment on higher turnover managed pubs and hotels.
With the 56 out of 63 tenanted estate sites being classified as
discontinued operations, the Ram Pub Company segment is no longer
presented in a segmental reporting note. Total revenue generated
from the Ram Pub Company in the prior period was GBP3.2 million, of
which GBP0.6 million related to continuing operations and the
remaining GBP2.6 million related to discontinued operations. The
results from discontinued operations are presented below:
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
GBPm GBPm GBPm
---------------------------------------------- ---------- ---------- ----------
Revenue - 2.1 2.1
Rental income - 0.5 0.5
---------------------------------------------- ---------- ---------- ----------
Total revenue - 2.6 2.6
Operating costs - (1.8) (1.8)
---------------------------------------------- ---------- ---------- ----------
Adjusted operating profit - 0.8 0.8
Adjusting items(1) - 9.0 9.0
---------------------------------------------- ---------- ---------- ----------
Profit before tax - 9.8 9.8
---------------------------------------------- ---------- ---------- ----------
Income tax expense - (0.3) (0.3)
---------------------------------------------- ---------- ---------- ----------
Profit after tax from discontinued operations - 9.5 9.5
---------------------------------------------- ---------- ---------- ----------
(1) Adjusting items related to the difference between cash, less disposal
costs, received from the sale of the 56 sites and the carrying value
of their assets, at the date of disposal. During the previous 52 week
period to 28 March 2022, the adjusting items related to the net upward
movement on the revaluation of properties in excess of amounts recognised
in equity. See note 11(1) in the statutory accounts for the period ended
28 March 2022 for further details.
Earnings per ordinary share for discontinued operations
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
Number Number Number
---------------------------------------------------- ---------- ---------- ----------
Basic weighted average number of ordinary
shares in issue 58,482,021 58,475,877 58,476,259
Dilutive potential ordinary shares from outstanding
employee share options 26,920 4,890 30,877
---------------------------------------------------- ---------- ---------- ----------
Diluted weighted average number of shares 58,508,941 58,480,767 58,507,136
---------------------------------------------------- ---------- ---------- ----------
Pence Pence Pence
---------------------------------------------------- ---------- ---------- ----------
Basic - 16.25 16.25
Effect of adjusting items - (14.88) (14.88)
---------------------------------------------------- ---------- ---------- ----------
Adjusted basic - 1.37 1.37
---------------------------------------------------- ---------- ---------- ----------
Pence Pence Pence
---------------------------------------------------- ---------- ---------- ----------
Diluted - 16.24 16.24
Effect of adjusting items - (14.87) (14.88)
---------------------------------------------------- ---------- ---------- ----------
Adjusted diluted - 1.37 1.36
---------------------------------------------------- ---------- ---------- ----------
The table below shows tax charged on discontinued operations.
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
Tax charged in the group income statement GBPm GBPm GBPm
--------------------------------------------------- ---------- ---------- ----------
Deferred tax
Rolled over gains on disposal of properties - 1.8 1.8
Reversal of temporary differences on revaluations - (1.5) (1.5)
-------------------------------------------------- ---------- ---------- ----------
Tax charge in the income statement - 0.3 0.3
--------------------------------------------------- ---------- ---------- ----------
The net cash flows incurred are as follows:
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
GBPm GBPm GBPm
--------------------------- ----------------- ---------- ----------
Operating - 0.1 0.1
Investing - 52.5 52.5
Financing - (0.1) (0.1)
--------------------------- ----------------- ---------- ----------
Net cash inflow - 52.5 52.5
--------------------------- ----------------- ---------- ----------
6. TAXATION
The taxation charge for the 26 weeks ended 26 September 2022
results in an effective tax rate of 18.5% (52 weeks ended 28 March
2022: 33.7%).
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
Tax charged in the group income statement GBPm GBPm GBPm
------------------------------------------------------ ---------- ---------- ----------
Current tax
Corporation tax expense 3.1 2.1 4.8
Adjustment in respect of current tax of
prior periods - - (0.1)
----------------------------------------------------- ---------- ---------- ----------
3.1 2.1 4.7
----------------------------------------------------- ---------- ---------- ----------
Deferred tax
Origination and reversal of temporary differences 1.7 3.5 6.7
Change in corporation tax rate - 6.1 6.9
Adjustment in respect of prior periods - - (0.8)
1.7 9.6 12.8
----------------------------------------------------- ---------- ---------- ----------
Tax charge in the income statement 4.8 11.7 17.5
------------------------------------------------------ ---------- ---------- ----------
Deferred tax in the group income statement
------------------------------------------------------ ---------- ---------- ----------
Property revaluation and disposals 0.2 - 2.3
Capital allowances 1.2 1.9 2.4
Retirement benefit schemes 0.2 0.1 0.2
Trade losses - 0.6 1.0
Capital losses - 0.8 -
Share based payments 0.1 0.1 -
Change in corporation tax rate - 6.1 6.9
------------------------------------------------------ ---------- ---------- ----------
Tax charge in the income statement 1.7 9.6 12.8
------------------------------------------------------ ---------- ---------- ----------
Deferred tax in the group statement of comprehensive
income
------------------------------------------------------ ---------- ---------- ----------
Interest rate swaps - cash flow hedge 1.5 0.2 1.0
Retirement benefit schemes (3.2) 0.2 3.3
Property revaluation and disposals - 0.2 4.8
Capital losses - (0.2) -
Change in corporation tax rate - 14.6 17.3
------------------------------------------------------ ---------- ---------- ----------
Tax (credit)/charge in other comprehensive
income (1.7) 15.0 26.4
------------------------------------------------------ ---------- ---------- ----------
The income tax charge for the 52 weeks ended 28 March 2022
related to GBP17.2 million from continuing operations and GBP0.3
million from discontinued operations.
The 2021 Budget announced an increase in the corporation tax
rate from 19% to 25% with effect from 1 April 2023. This was
substantively enacted on 24 May 2021. Accordingly, the deferred tax
assets and liabilities at the balance sheet date were calculated at
the substantively enacted rate of 25% at the prior period end, to
the extent they were not expected to reverse before 1 April 2023.
This amount was recognised as an adjusting item in the prior period
(see note 2).
The effective full year current tax rate of 12.6% is up from
8.7% in the prior 52 week period to 28 March 2022. This is below
the standard rate, due largely to the temporary differences arising
from the introduction, with effect from 1 April 2021, of the
capital allowances "super deduction" at 130% of eligible
expenditure and special rate allowance at 50% of eligible
expenditure, substantively enacted on 24 May 2021. The effective
tax rate in the prior period was also impacted by losses brought
forward from the prior year, utilised in the period.
7. EARNINGS PER ORDINARY SHARE
(a) Weighted average number of shares
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
Number Number Number
------------------------------------------ ---------- ---------- ----------
Basic weighted average number of ordinary
shares in issue 58,482,021 58,475,877 58,476,259
Dilutive potential ordinary shares from
outstanding employee share options 26,920 4,890 30,877
------------------------------------------ ---------- ---------- ----------
Diluted weighted average number of shares 58,508,941 58,480,767 58,507,136
------------------------------------------ ---------- ---------- ----------
(b) Earnings attributable to shareholders of the parent company
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
GBPm GBPm GBPm
------------------------------------------ ---------- ---------- ----------
Profit for the period 19.1 20.0 34.4
Adjusting items 1.1 (9.4) (9.3)
Tax attributable to adjusting items - 6.7 7.8
------------------------------------------ ---------- ---------- ----------
Adjusted earnings after tax 20.2 17.3 32.9
------------------------------------------ ---------- ---------- ----------
Basic earnings per share
Pence Pence Pence
------------------------------------------ ---------- ---------- ----------
Basic 32.66 34.20 58.83
Effect of adjusting items 1.88 (4.62) (2.57)
------------------------------------------ ---------- ---------- ----------
Adjusted basic 34.54 29.58 56.26
------------------------------------------ ---------- ---------- ----------
Diluted earnings per share
Pence Pence Pence
------------------------------------------ ---------- ---------- ----------
Diluted 32.64 34.20 58.80
Effect of adjusting items 1.88 (4.62) (2.57)
------------------------------------------ ---------- ---------- ----------
Adjusted diluted 34.52 29.58 56.23
------------------------------------------ ---------- ---------- ----------
(c) Earnings from continuing operations
GBPm GBPm GBPm
------------------------------------------ ---------- ---------- ----------
Profit for the period 19.1 10.5 24.9
Adjusting items 1.1 (0.4) (0.3)
Tax attributable to adjusting items - 6.4 7.5
------------------------------------------ ---------- ---------- ----------
Adjusted earnings after tax 20.2 16.5 32.1
------------------------------------------ ---------- ---------- ----------
Basic earnings per share
Pence Pence Pence
------------------------------------------ ---------- ---------- ----------
Basic 32.66 17.96 42.58
Effect of adjusting items 1.88 10.26 12.31
------------------------------------------ ---------- ---------- ----------
Adjusted basic 34.54 28.22 54.89
------------------------------------------ ---------- ---------- ----------
Diluted earnings per share
Pence Pence Pence
------------------------------------------ ---------- ---------- ----------
Diluted 32.64 17.95 42.56
Effect of adjusting items 1.88 10.26 12.31
------------------------------------------ ---------- ---------- ----------
Adjusted diluted 34.52 28.21 54.87
------------------------------------------ ---------- ---------- ----------
The basic earnings per share figure is calculated by dividing
the net profit for the period by the weighted average number of
ordinary shares in issue during the period. Diluted earnings per
share have been calculated on a similar basis taking into account
26,920 (2021: 4,890) dilutive potential shares under the group's
SAYE and LTIP schemes.
Adjusted earnings per share are presented to eliminate the
effect of the adjusting items on basic and diluted earnings per
share.
For basic, diluted and the effect of adjusting items on earnings
per share on discontinued operations see note 5.
8. DIVIDS ON EQUITY SHARES
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
Pence Pence Pence
---------------------------------- --------- --------- ---------
Final dividend (previous period) 10.26 - -
Interim dividend (current period) - - 8.55
---------------------------------- --------- --------- ---------
10.26 - 8.55
---------------------------------- --------- --------- ---------
The table above sets out dividends that have been paid. The
final dividend in respect of the period ended 28 March 2022, at a
cost of GBP6.0 million (for the period ended 26 March 2021: GBPnil)
was paid during the period. The interim dividend, in respect of the
period ended 26 September 2022, at a cost of GBP6.0 million (for
the period ended 27 September 2021: GBP5.0 million), is expected to
be paid on 2 December 2022 to shareholders on the register at the
close of business on 18 November 2022.
9. NET CASH GENERATED FROM OPERATIONS AND ANALYSIS OF NET
DEBT
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
GBPm GBPm GBPm
------------------------------------------------ --------- --------- ---------
Profit before tax from continuing operations 23.9 22.2 42.1
Profit before tax from discontinued operations - 9.8 9.8
Finance costs 4.2 5.2 9.5
Finance (credit)/charge for pension obligations (0.2) 0.1 0.1
------------------------------------------------ --------- --------- ---------
Operating profit 27.9 37.3 61.5
Depreciation of property and equipment 12.6 12.4 24.4
Depreciation of right-of-use assets 3.4 3.6 7.1
Movement on the revaluation of properties - - (0.8)
Net profit on disposal of properties - (9.6) (11.4)
Difference between pension service cost and
cash contributions paid (0.6) (0.6) (1.2)
Share based payments - - (0.1)
Movements in working capital
- Inventories (0.7) (1.7) (2.0)
- Receivables 1.1 6.5 1.5
- Payables 4.8 23.5 28.0
------------------------------------------------ --------- --------- ---------
Net cash generated from operations 48.5 71.4 107.0
------------------------------------------------ --------- --------- ---------
Analysis of group net debt
At 26 Sep At 27 Sep At 28 Mar
2022 2021 2022
GBPm GBPm GBPm
---------------------------------------- --------- --------- ---------
Cash 39.0 68.2 34.0
Current borrowings and loan capital (30.0) - (30.0)
Current lease liabilities (5.2) (4.9) (4.9)
Non-current borrowings and loan capital (104.0) (133.7) (103.8)
Non-current lease liabilities (67.9) (69.9) (69.1)
---------------------------------------- --------- --------- ---------
Net debt (168.1) (140.3) (173.8)
---------------------------------------- --------- --------- ---------
10. PROPERTY AND EQUIPMENT
Fixtures,
fittings
Land & &
buildings equipment Total
Cost or valuation GBPm GBPm GBPm
---------------------------------------------- --------- --------- ------
At 29 March 2021 717.9 156.2 874.1
---------------------------------------------- --------- --------- ------
Additions 11.5 25.4 36.9
Business combinations 35.3 1.5 36.8
Disposals(1) (44.2) (10.8) (55.0)
Fully depreciated assets (0.5) (18.3) (18.8)
Revaluation
- effect of upward movement in property
valuation 40.3 - 40.3
- effect of downward movement in property
valuation (10.7) - (10.7)
---------------------------------------------- --------- --------- ------
At 28 March 2022 749.6 154.0 903.6
Additions 5.3 13.6 18.9
Business combinations 8.6 1.2 9.8
Fully depreciated assets - (10.3) (10.3)
---------------------------------------------- --------- --------- ------
At 26 September 2022 763.5 158.5 922.0
---------------------------------------------- --------- --------- ------
Depreciation and impairment
---------------------------------------------- --------- --------- ------
At 29 March 2021 23.7 76.7 100.4
---------------------------------------------- --------- --------- ------
Depreciation charge 1.6 22.8 24.4
Disposals(1) (5.2) (5.3) (10.5)
Fully depreciated assets (0.5) (18.3) (18.8)
Revaluation
- effect of downward movement in property
valuation (4.6) - (4.6)
- effect of upward movement in property
valuation 4.7 - 4.7
---------------------------------------------- --------- --------- ------
At 28 March 2022 19.7 75.9 95.6
Depreciation charge 0.8 11.8 12.6
Fully depreciated assets - (10.3) (10.3)
---------------------------------------------- --------- --------- ------
At 26 September 2022 20.5 77.4 97.9
---------------------------------------------- --------- --------- ------
Net book value
---------------------------------------------- --------- --------- ------
At 29 March 2021 694.2 79.5 773.7
---------------------------------------------- --------- --------- ------
At 28 March 2022 729.9 78.1 808.0
---------------------------------------------- --------- --------- ------
At 26 September 2022 743.0 81.1 824.1
---------------------------------------------- --------- --------- ------
(1) During the prior period, the majority of the disposals related to
the sale of 56 tenanted pubs (see note 5).
Business combinations
During the period, the group acquired the Bedford Arms
(Rickmansworth), Merlin's Cave (Chalfont St Giles) and the Half
Moon (Windlesham), which formed business combinations for a total
cash consideration of GBP9.8 million, which was settled during the
period. When assets are acquired, management determines whether the
assets form a business combination. Business combinations must
involve the acquisition of a business, which generally have three
elements: input, process and output. The final aggregated fair
value of the identifiable assets and liabilities of the acquired
businesses were property and equipment of GBP9.8 million. The group
incurred GBP0.8 million of costs associated with the acquisitions,
which have been recorded within adjusting items (see note 2). In
the prior period to 27 September 2021, the group made no business
acquisitions.
Other acquisitions
During the period the group also acquired the Wild Duck (Ewen)
as an asset acquisition for a total cash consideration of GBP2.7
million. In the prior period to 27 September 2021, the group
acquired the Greenwich Union (Greenwich) for a total cash
consideration of GBP1.5 million.
Revaluation of property and equipment
The values of the group's freehold land, buildings and fixtures
and fittings were reviewed in light of current market factors by
management and by Savills, who perform a desktop review based upon
information provided by the group, pursuant to the group's
accounting policy. The group considers that the valuation reached
at 28 March 2022 still represents the best estimate of the fair
value of the estate at 26 September 2022.
Details of the methodology used in determining the group's
property values are discussed in the group's audited accounts for
the 52 weeks ended 28 March 2022. The key inputs are EBITDA, a
multiplier and, in some cases, underlying property values. A
sensitivity analysis has been conducted on the property estate to
give an indication of the impact of movements in the most sensitive
assumption, EBITDA. The analysis considers this single change with
the other assumptions unchanged. In practice, changes in one
assumption may be accompanied by changes in another. Changes in
market values may also occur at the same time as any changes in
assumptions. This information should not be taken as a projection
of likely future valuation movements. Decreasing or increasing the
EBITDA used in the revaluation by 10% would decrease/increase the
valuation by GBP54.7 million.
11. LEASE LIABILITIES, RIGHT-OF-USE ASSETS AND GOODWILL
Set out below are the carrying amounts of the group's right-of-use assets
and lease liabilities and the movements during the period:
Lease
Right-of-use
assets liabilities
GBPm GBPm
-------------------------------------- ------------------- -----------------
As at 29 March 2021 158.0 80.2
Additions 1.2 1.2
Lease amendments (5.1) (3.3)
Depreciation expense (7.1) -
Accretion of interest - 2.5
Payments - (6.6)
--------------------------------------- ------------------- -----------------
As at 28 March 2022 147.0 74.0
--------------------------------------- ------------------- -----------------
Additions 0.2 0.2
Lease amendments 1.2 1.2
Depreciation expense (3.4) -
Accretion of interest - 1.2
Payments - (3.5)
--------------------------------------- ------------------- -----------------
As at 26 September 2022 145.0 73.1
--------------------------------------- ------------------- -----------------
Right-of-use assets predominantly relate to leasehold
properties, along with motor vehicles and IT equipment.
The depreciation charge is recognised within operating costs in
the income statement.
Lease amendments in the current period largely represent upwards
market rent reviews. In the prior period, lease amendments included
GBP0.7 million of rent holidays treated as lease modifications
which were offset against GBP0.7 million of rent amendments.
During the prior 52 week period to 28 March 2022 lease
amendments included the amounts disposed of in relation to the sale
of 56 tenanted pubs (see note 5) and lease modifications in respect
of changes to lease terms and lease terminations.
Impairment considerations
The group tests goodwill annually for impairment or more
frequently if there are indicators that goodwill may have been
impaired. There will be an impairment if the recoverable amount is
lower than carrying value. Recoverable amount is the higher of
value in use or fair value less costs to sell. The value in use is
calculated based upon, in management's view, the most likely
recovery from the impact of covid-19 in year one, followed by a
return to full trade in year two.
At 28 March 2022, for all cash generating units except Smiths of
Smithfield Limited, cash flows assumed a 1.4% growth (2021: 1.4%)
from a base of expected FY24 EBITDA, derived from the board
approved FY23 budget and the anticipated impact of a return to
normalised trading for some sites. For Smiths of Smithfield Limited
growth rates are higher over a five-year period to reflect the
arrival of Crossrail in 2022 and the opening of the Museum of
London in 2025, and then revert back to a long-term growth rate of
1.4% thereafter. The pre-tax discount rate applied to all cash flow
projections was 9.2% (2021: 8.8%).
The group monitors the latest government legislation in relation
to climate related matters. At the current time, no legislation has
been passed that will significantly impact the group's impairment
review. The group will adjust the key assumptions used in
value-in-use calculations and sensitivity to changes in assumptions
should a change be required.
At 28 March 2022, management performed a sensitivity analysis on
the impairment test. The impairment calculation is most sensitive
to the pre-tax discount rate and EBITDA assumptions. Given the
uncertainty surrounding future trade levels following the impact of
covid-19, several scenarios were modelled. The model included a
number of assumptions, including the recovery from covid-19 and
EBITDA forecasts, and assumptions over the long-term growth of
Smiths of Smithfield Limited.
For Smiths of Smithfield Limited, the headroom would be
eliminated as a result of increasing the pre-tax discount rate to
10.4% or reducing EBITDA by 11.9% from forecast levels. For the
Geronimo Group Limited, Redcomb Pubs Limited, Spring Pub Company
Limited and 580 Limited, management considered the impact of an
increase in either the pre-tax discount rate by 1% or a reduction
of EBITDA by 10% from forecasted levels to be a reasonable change
in assumptions. With the exception of the Spring Pub Company
Limited, the models are not sensitive to these changes in
variables. Specifically, increasing the pre-tax discount rate to
9.9% or reducing EBITDA by 6.7% would result in the elimination of
headroom in Spring Pub Company Limited. Although not considered
probable, if trade continued at the current year level with no
future growth rate, no impairment would be recognised apart from
for Spring Pub Company Limited and Smiths of Smithfield
Limited.
12. RETIREMENT BENEFIT SCHEMES
The table below summarises the movement in the retirement
benefit schemes in the period.
26 weeks 26 weeks 52 weeks
to 26 Sep to 27 Sep to 28 Mar
2022 2021 2022
GBPm GBPm GBPm
------------------------------------------------ ---------- ---------- ----------
Changes in the present value of the retirement benefit schemes are as
follows:
Opening surplus/(deficit) 12.2 (6.1) (6.1)
Current service cost (0.1) (0.2) (0.4)
Contributions 0.7 0.8 1.6
Finance credit/(charge) for pension obligations 0.2 (0.1) (0.1)
Remeasurement through other comprehensive
income (12.8) 1.1 17.2
------------------------------------------------ ---------- ---------- ----------
Closing surplus/(deficit) 0.2 (4.5) 12.2
------------------------------------------------ ---------- ---------- ----------
The GBP12.8 million remeasurement through other comprehensive income
is largely driven by the actual return in assets being less than expected.
This was partially offset by a reduction in liabilities due to changes
in market conditions with a decrease in RPI inflation to 3.30% (28 March
2022: 3.60%) and an increase to the discount rate to 5.60% (28 March
2022: 2.80%).
13. SHARE CAPITAL
Total share capital comprises the nominal value of the share
capital issued and fully paid of GBP7.3 million (2022: GBP7.3
million) and the share premium account of GBP7.8 million (2022:
GBP7.7 million). Share capital issued in the period comprises a
nominal value of GBPnil (2022: GBPnil) and a share premium of
GBP0.1 million (2022: GBP0.1 million).
The shares issued in the period related to the deferred annual
bonus scheme.
14. POST BALANCE SHEET EVENTS
Subsequent to the period end the group acquired the trade and
assets of the Carpenters Arms (Tonbridge) and the Griffin Inn
(Fletching) for a total cash consideration of GBP8.4 million.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR FSAEEUEESEFF
(END) Dow Jones Newswires
November 10, 2022 02:00 ET (07:00 GMT)
Young & Co's Brewery (LSE:YNGA)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Young & Co's Brewery (LSE:YNGA)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
