- First half revenue up 27%
- Strong start to second half
- Budget impact of £11 million
Pubs and hotels group Young & Co (YNGA:AIM) delivered strong like-for-like revenue growth in the first half to 30 September and said recent trading has been strong with an acceleration in like-for-like growth.
Investors gave the company the thumbs-up, marking the shares higher by 18.8p or 2% to 934.8p, though they remain around 17% lower year-to-date compared with a 4% drop in the FTSE AIM index.
The company said the Autumn budget will result in ‘significant’ increased costs for the industry as companies absorb rises in the National Minimum Wage and Employers’ National Insurance.
It estimates an £11 million impact on an annualised basis from next April for the business.
‘We will work to see how we can mitigate these headwinds without passing on all the cost to our loyal customers. We would like to see certainty and delivery of real business rate reform which will benefit all hospitality businesses,’ the company said.
STRONG HALF
Total revenue for the 26 weeks to 30 September increased by 27% to £250 million driven by like-for-like sales growth of 4.4% and a contribution from The City Pub acquisition in March 2024.
Despite increases in the National Living Wage of almost 10% and a quarter of dual running costs from The City Pub acquisition, adjusted operating profit jumped 23% to £38 million, equating to a ‘sector leading’ margin on sales of 15.2%.
Healthy cash generation and income from six pub disposals reduced net debt to £255.8 million excluding leases, representing 2.8 times earnings before interest, tax, depreciation, and amortisation.
The interim dividend was increased by 6% to 11.53p per share.
Recent trading has seen an acceleration in like-for-like managed house revenue growth to 9.2% over the last three weeks, from 6% growth in the last eight weeks of the first half, demonstrating the benefit of the Autumn Internationals.
WHAT DID THE COMPANY SAY?
Chief executive Simon Dodd commented: ‘We’ve achieved a huge amount as a business in the last six months, reflected in another strong set of results.
‘The City Pub Group integration has gone well, with the pub teams welcomed into the Young’s family and all operational control brought together under one leadership team.
‘Given the quality of our estate and on-going strategy, we remain confident in our ability to deliver long-term growth, including achieving the planned synergies from the City Pub Group acquisition.’
