Young’s pub chain posts profit drop after poor weather
Young’s pub chain blamed “poor and unpredictable weather” for a fall in profit in its latest half-year results today, but still raised its interim dividend to book its 23rd consecutive rise.
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The figures
Profit before tax dropped 6.4 per cent year on year to £24.3m in the six months to the end of September.
That fall came despite a 7.3 per cent increase in revenue to £168.2m, compared to the same period a year ago.
Net debt rocketed 23.6 per cent to £227.2m as net cash flow rose £3m to £37.7m year on year.
Basic earnings per share fell 8.3 oer cent to 38.16p, down from last year’s 42.5p.
But Young’s still hiked its interim dividend six per cent to 10.57p per share.
Why it’s interesting
Young’s CEO Patrick Dardis said his company had recovered from a weak start to the year as “poor and uncpredictable weather was a far cry from last year’s exceptional early summer sunshine”.
But the May bank holiday weather and a warm September helped like-for-like sales rise 1.1 per cent over the period.
Read more: Young’s hails profit growth and hikes dividend in strong year of growth
Last year the World Cup helped Young’s post strong summer gains, and Dardis said Young’s had struggled to keep pace with those tough comparative sales.
Meanwhile net debt climbed as Young’s was forced to recognise an extra £72.2m in lease liabilities under a change in accounting rules.
What Young’s said
CEO Patrick Dardis said:
I am very pleased with the performance of our business during the first half of the year. In what was a challenging period up against tough comparatives, we continued to grow profits, make acquisitions, invest organically and increase the dividend: a reflection of the consistent execution of our strategy and the hard work of our teams throughout those six months.
The start of the half year was challenging as the poor and unpredictable weather was a far cry from last year’s exceptional early summer sunshine. However, the summer Bank Holiday temperatures and late-September sunshine contributed to strong like-for-like sales growth in the second 13 weeks which helped to balance the first half, with like-for-like sales finishing up 1.1%.
We have added the White Bear, a freehold pub in Tunbridge Wells, into our managed house estate and continue to seek out the right opportunities in exciting new locations where we believe our premium offer will flourish.
Although the upcoming general election prolongs the unpredictability of the political environment, it does not change our approach or confidence in our winning strategy of running high-quality, well-invested premium pubs.
Our expectations for the full year remain unchanged and we remain confident in our ability to deliver long-term growth and sustainable superior investor returns.
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