YOUNG & CO.'S BREWERY, P.L.C.
INTERIM RESULTS FOR THE 26 WEEKS ENDED 30 SEPTEMBER 2024
STRONG PROFIT PERFORMANCE
SUPPORTED BY CITY PUBS INTEGRATION
|
2024 |
2023 |
% |
|
£m |
£m |
change |
|
|
|
|
Revenue |
250.0 |
196.5 |
+27.2 |
|
|
|
|
Adjusted operating profit1 |
38.1 |
31.0 |
+22.9 |
|
|
|
|
Adjusted EBITDA1 |
59.0 |
47.9 |
+23.2 |
|
|
|
|
Adjusted profit before tax1 |
28.3 |
28.0 |
+1.1 |
|
|
|
|
Profit before tax |
25.3 |
24.5 |
+3.3 |
|
|
|
|
Net debt |
255.8 |
110.8 |
+130.9 |
|
|
|
|
Net debt to EBITDA1 2 |
2.6x |
1.3x |
-1.3x |
|
|
|
|
Net debt (including leases) |
346.5 |
184.0 |
+88.3 |
|
|
|
|
Net debt to EBITDA (including leases)1 2 |
3.4x |
2.1x |
-1.3x |
|
|
|
|
Adjusted basic earnings per share1 |
36.72p |
36.08p |
+1.8 |
|
|
|
|
Basic earnings per share |
32.21p |
29.75p |
+8.3 |
|
|
|
|
Interim dividend per share3 |
11.53p |
10.88p |
+6.0 |
|
|
|
|
Net assets per share4 |
|
|
+1.4 |
|
|
|
|
This interim period includes a full half year contribution from the City Pub Group acquisition. |
|||
|
|
|
|
1 Reference to an 'adjusted' item means that item has been adjusted to exclude non-underlying items (see note 2 for adjusted items and note 5 for earnings per share).
2 Net debt to adjusted EBITDA has been calculated based on the last 12 months' actual adjusted EBITDA of
3 The interim dividend, in respect of the period ended 30 September 2024, is expected to be paid on 6 December 2024 (see note 6).
4 Net assets per share are the group's net assets divided by the shares in issue at the period end.
HIGHLIGHTS
· Total revenue for the period up 27.2% to
· Like-for-like revenue growth of 4.4% (5.2% excluding Easter impact) set against the challenging early spring and summer weather, supported by an excellent
· Adjusted operating profit up
·
· Healthy cash generation alongside the planned selective disposal of six pubs has reduced the year end net debt position by
· Interim dividend of
· Like-for-like managed house revenue for the last eight weeks was ahead of last year by 6.0%; and accelerating to 9.2% in the last three weeks, demonstrating the benefit of the Autumn Internationals.
· Successful integration of City Pub Group into the Young's estate, head office synergies have already been realised, and further food and drink margin benefits progressing in line with the acquisition plan.
Simon Dodd, Chief Executive of Young's, 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. Our teams have done a fantastic job, and I'm looking forward to seeing our pubs thrive together"
"I am very pleased with our performance and the progress we have made during the period, which has been achieved despite some challenges. The weather was frustrating yet again, with a wet spring and limited periods of prolonged sunshine during the summer months, however
"The new Government's budget will result in significant increased costs for our industry in the near term through rises in National Minimum Wage and Employer's NI payments. We expect the cost impact to be approximately
"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."
For further information, please contact:
Young & Co.'s Brewery, P.L.C. 020 8875 7000
Simon Dodd, Chief Executive Officer
Michael Owen, Chief Financial Officer
MHP Communications 07736 464749
Tim Rowntree/ Robert Collett-Creedy
Peel Hunt (NOMAD & Joint Corporate Broker) 020 7418 8900
George Sellar/Lalit Bose
Stifel (Joint Corporate Broker) 020 7710 7600
Erik Anderson/Francis North
INTERIM STATEMENT
I am very pleased with the performance of our business during the first half of the year.
Overall, we delivered a strong performance for the period, with total revenue up 27.2% to
Since acquiring the City Pub Group in March, our primary focus has been on integrating the pubs into the Young's estate. Although it is still early days, the integration is complete, bringing all operational control under one Young's structure. When the deal was announced, we outlined several synergies and operational benefits that we aimed to achieve. We have delivered the planned
As expected, the integration of the City Pub Group has had a minor negative effect on margins during this period. The purchasing synergies will not commence until the second half of the year, and operating profit for the first quarter has been impacted by
The City Pub Group acquisition was the largest in our history and it was important that we prioritised its integration into Young's ahead of investments and further acquisitions. However, we are committed to maintaining a premium, well-invested estate, which is core to our continued strong performance, and our strong financial position enabled us to invest
Our achievements this period are fundamentally due to our teams. That's why it's so important for us to have the best possible people working throughout the group. We focus on providing high-quality training programmes and development opportunities to give our people the chance to flourish and further their careers within Young's, and I am extremely proud of the fact that during this period 42% of our operations managers, 86% of general managers and 57% of chefs have been developed and promoted internally.
I would like to take this opportunity to welcome Ian Dyson, who joined the board as a non-executive director on 2 September 2024, with a strong track record in consumer facing industries and PLC experience.
In line with our progressive dividend policy and strong financial performance, the board has decided to raise the interim dividend by 6.0% to
BUSINESS REVIEW
Total managed house revenue, supported by the City Pub Group acquisition, was up 27.3%, and 4.4% on a like-for-like basis (5.2% excluding the Easter weekend impact) compared to the same period last year. Young's now has a total managed estate of 278 pubs, this includes 55 pubs with rooms and a total room count of 1,051. This translates to a combined revenue mix of 63% for drink, food at 29% and accommodation growing to 7%.
Pub-level synergies from acquiring the City Pub Group will be realised in line with our plan as we enter the second half of this fiscal year. The combined estate has been navigating significant cost pressures, notably the National Living Wage, which rose by another 9.7% year-on-year, and utilities. The Ram Agency, which offers team members the flexibility to select shifts that suit their needs, while helping us reduce dependency on agency staff and manage our cost base, has continued to help mitigate some of these cost challenges. The Ram Agency now accounts for almost 10% of total employees, covering on average across the period 2,880 shifts and 23,812 hours per month. We have yet to implement this across the former City Pubs estate but will do so to support profit growth in the next fiscal year.
Despite on-going headwinds, total pub EBITDA was up 25.1% to
The poor spring weather combined with the lack of an Easter weekend in the period, meant that the year got off to a much slower start than the prior year. This was further compounded by very few prolonged periods of warm sunshine during the summer months. However,
Our Young's rooms revenue continues to deliver a solid performance with like-for-like growth of 2.7%. This builds on last year's strong performance following the launch of our new rooms strategy, 'Young's Rooms', which celebrates the enjoyment and unique experience of staying in a pub. During the period we continued our investment in pubs with rooms, starting schemes at The Windmill (Clapham), Brewers Inn (Wandsworth) and Coach and Horses (Kew), which was crucial to support future growth, but with an effective 17-week closure period, naturally impacted like-for-like performance during the period. Our like-for-like occupancy, which includes the closure periods, dropped marginally by -0.9%, however with an increase of
England's journey to the final of
Our Spritz summer cocktail menus this year introduced several new drinks to the Young's bar including Allora Spritz, an aperitivo inspired by Procida, Italy's island of lemons and the hugely popular, modern classic, Hugo Spritz. We also elevated our range of low and alcohol-free drinks to offer customers greater choice for different summer drinking occasions with the Elderflower Elixir, a popular choice containing less than one unit of alcohol and the Pentire 0.0 Coastal Breeze complementing our already very popular, Amalfi Spritz.
Our food sales continue to grow, up 2.9% on a like-for-like basis (3.8% excluding Easter impact) and up 22.8% in total including City Pubs. Our overall food strategy remains unchanged, and within this we have a number of pubs that continue to shine. Both the Oyster Shed and Smiths of Smithfield have retained their one rosette and The Alma, which has seen a 570% increase in its Sunday roasts sales, was nominated by Pierre Koffman as the best Sunday roast in London. Our Executive Chef team continue to support our pubs, helping to mitigate food inflation as far as possible by taking a proactive approach to using seasonal and locally-sourced British ingredients. We are hopeful that as we progress through the rest of the year, we will continue to see this ease, with recent food costs flat compared with this time last year.
With a commitment to give back to our communities, we are in the second year of our Wooden Spoon partnership and have already raised
Following the completion of the City Pub Group acquisition in March, it has naturally been a quieter period for investment. Nevertheless, during the period we have invested
Elsewhere, we are on site with major schemes at the Hope and Anchor (Brixton), Libertine (Bournemouth), Brewers Inn (Wandsworth) and Coach and Horses (Kew). Of the City Pubs, we have invested in the Roundhouse (Wandsworth), Phene (Chelsea), Market House (Reading) and are currently on-site at the Pontcanna Inn (Cardiff). These investments start the process of ensuring that City Pubs are elevated to the very highest standard. Consistent with our goal to reduce debt and focus on future growth, we disposed of six non-core pubs during the period for total proceeds of
FINANCE
At the period end, our debt reduced by
The adjusting items of
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 the interim period the net pension scheme surplus has increased to
Our adjusted earnings per share is up 1.8% to
CURRENT TRADING AND OUTLOOK
Recent trading has been strong, with like-for-like trading in the last eight weeks up by 6.0% and accelerating to 9.2% in the last three weeks. We've welcomed back the rugby Autumn Internationals, boosting sales in our south-west London heartland. Christmas bookings are already looking strong, with confirmed bookings up 33% on this time last year, and a real focus on maximising the benefit of City Pubs across the festive period.
Since the period end, we have opened the Tellers Arms, a former bank which has been transformed into a beautiful pub with a rooftop terrace and nine boutique bedrooms right in the heart of Farnham. In the first seven days of opening it took just over
In the second half of the year, we will see further benefit from the City Pub Group acquisition, with the new beer range contributing to improved margins, new food menus and improved operational rigour ensuring we are on track to achieve our planned synergy benefits in full. We will also continue with our targeted investment programme across the entire combined estate, balancing our focus on reducing debt levels and our long-term winning strategy of operating a premium, individual and well invested estate.
The good start to the second half of the year and our future plans provide confidence in our winning strategy. However, the macroeconomic environment together with the latest government budget and the impact this could have on consumer sentiment remains unpredictable. Yet again, we are very conscious of the significant impact new underground rail strikes could have on trade in the lead up to Christmas, a key time of year for the hospitality sector. Despite this we remain focused on delivering the benefits from the City Pub Group acquisition and building on our premium position within the pub and bedrooms sector and are confident in our winning strategy of operating premium, individual and well-invested managed pubs and bedrooms.
Simon Dodd
Chief Executive
14 November 2024
Group income statement
For the 26 weeks ended 30 September 2024
|
|
Unaudited |
Unaudited |
Audited |
|
|
26 weeks |
26 weeks |
52 weeks |
|
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
|
2024 |
2023 |
2024 |
|
Notes |
£m |
£m |
£m |
Revenue |
3 |
250.0 |
196.5 |
388.8 |
Operating costs before adjusting items |
|
(211.9) |
(165.5) |
(331.5) |
Adjusted operating profit |
|
38.1 |
31.0 |
57.3 |
Adjusting items |
2 |
(3.0) |
(3.5) |
(28.7) |
Operating profit |
|
35.1 |
27.5 |
28.6 |
Finance income |
|
0.1 |
- |
- |
Finance costs |
|
(9.9) |
(3.1) |
(8.1) |
Finance income for pension obligations |
11 |
- |
0.1 |
0.2 |
Profit before tax |
|
|
|
|
|
25.3 |
24.5 |
20.7 |
|
Income tax expense |
4 |
(5.0) |
(7.1) |
(9.6) |
|
|
|
|
|
Profit after tax for the period |
|
20.3 |
17.4 |
11.1 |
|
|
|
|
|
Attributable to: |
|
|
|
|
Owners of the parent |
|
20.0 |
17.4 |
11.1 |
Non-controlling interests |
|
0.3 |
- |
- |
|
|
20.3 |
17.4 |
11.1 |
|
|
|
|
|
|
|
Pence |
Pence |
Pence |
Earnings per 12.5p ordinary share |
|
|
|
|
Basic |
5 |
32.21 |
29.75 |
18.89 |
Diluted |
5 |
32.20 |
29.74 |
18.88 |
Group statement of comprehensive income
For the 26 weeks ended 30 September 2024
|
|
Unaudited |
Unaudited |
Audited |
|
|
26 weeks |
26 weeks |
52 weeks |
|
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
|
2024 |
2023 |
2024 |
|
Notes |
£m |
£m |
£m |
|
|
|
|
|
Profit for the period |
|
20.3 |
17.4 |
11.1 |
|
|
|
|
|
Other comprehensive income |
|
|
|
|
Items that will not be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
|
|
Unrealised gain on revaluation of property |
|
- |
- |
22.9 |
Remeasurement of retirement benefit schemes |
11 |
- |
(6.5) |
(5.3) |
Tax on above components of other comprehensive income |
|
- |
1.6 |
(6.1) |
|
|
|
|
|
Items that will be reclassified subsequently to profit or loss: |
|
|
|
|
Fair value movement of interest rate swaps |
|
(2.1) |
0.2 |
(2.1) |
Tax on fair value movement of interest rate swaps |
|
0.5 |
- |
0.5 |
|
|
(1.6) |
(4.7) |
9.9 |
|
|
|
|
|
Total comprehensive income for the period |
|
18.7 |
12.7 |
21.0 |
|
|
|
|
|
Attributable to: |
|
|
|
|
Owners of the parent |
|
18.4 |
12.7 |
21.0 |
Non-controlling interests |
|
0.3 |
- |
- |
|
|
18.7 |
12.7 |
21.0 |
|
|
|
|
|
All of the results above are from continuing operations. |
|
|
|
|
Group balance sheet
At 30 September 2024
|
|
Unaudited |
Unaudited |
Audited |
|
|
at 30 Sep |
at 2 Oct |
at 1 Apr |
|
|
2024 |
2023 |
2024 |
|
Notes |
£m |
£m |
£m |
|
|
|
|
|
Non-current assets |
|
|
|
|
Goodwill |
9 |
76.3 |
30.7 |
77.4 |
Property and equipment |
8 |
1,044.0 |
865.1 |
1,036.9 |
Investment properties |
|
4.3 |
- |
4.3 |
Right-of-use assets |
9 |
174.2 |
144.1 |
183.2 |
Derivative financial instruments |
|
- |
2.2 |
2.9 |
Retirement benefit schemes |
11 |
2.6 |
- |
1.8 |
|
|
1,301.4 |
1,042.1 |
1,306.5 |
Current assets |
|
|
|
|
Inventories |
|
6.6 |
5.4 |
6.5 |
Trade and other receivables |
|
16.1 |
9.9 |
15.9 |
Income tax receivable |
|
- |
- |
5.0 |
Derivative financial instruments |
|
2.0 |
3.0 |
0.2 |
Cash |
|
0.1 |
0.8 |
16.9 |
|
|
24.8 |
19.1 |
44.5 |
Asset held for sale |
10 |
0.6 |
3.1 |
2.2 |
|
|
25.4 |
22.2 |
46.7 |
Total assets |
|
1,326.8 |
1,064.3 |
1,353.2 |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Borrowings |
|
(43.0) |
(20.0) |
(71.5) |
Lease liabilities |
9 |
(6.6) |
(4.7) |
(6.8) |
Trade and other payables |
|
(61.6) |
(42.4) |
(69.7) |
Income tax payable |
|
(1.7) |
(0.5) |
- |
|
|
(112.9) |
(67.6) |
(148.0) |
Non-current liabilities |
|
|
|
|
Borrowings |
|
(212.9) |
(91.6) |
(213.2) |
Lease liabilities |
9 |
(84.1) |
(68.5) |
(85.0) |
Derivative financial instruments |
|
(0.9) |
- |
(0.2) |
Deferred tax liabilities |
|
(127.7) |
(103.5) |
(129.9) |
Retirement benefit schemes |
11 |
(1.5) |
(2.0) |
(1.7) |
|
|
(427.1) |
(265.6) |
(430.0) |
Total liabilities |
|
(540.0) |
(333.2) |
(578.0) |
Net assets |
|
786.8 |
731.1 |
775.2 |
|
|
|
|
|
Capital and reserves |
|
|
|
|
Share capital |
12 |
7.8 |
7.3 |
7.8 |
Share premium |
12 |
7.8 |
7.8 |
7.8 |
Other reserves |
|
38.0 |
1.8 |
38.0 |
Hedging reserve |
|
0.8 |
4.2 |
2.4 |
Revaluation reserve |
|
277.6 |
260.9 |
277.6 |
Retained earnings |
|
451.5 |
449.1 |
438.0 |
|
|
783.5 |
731.1 |
771.6 |
Non-controlling interests |
|
3.3 |
- |
3.6 |
Total equity |
|
786.8 |
731.1 |
775.2 |
|
|
|
|
|
Group statement of changes in equity
For the 26 weeks ended 30 September 2024
Notes |
Share capital and premium |
Other reserves |
Hedging reserve |
Revaluation reserve |
Retained earnings |
Non-controlling interest |
Total equity |
|
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
|
|
|
|
|
|
|
|
At 1 April 2024 |
|
15.6 |
38.0 |
2.4 |
277.6 |
438.0 |
3.6 |
775.2 |
Total comprehensive income |
|
|
|
|
|
|
|
|
Profit for the 26-week period |
|
- |
- |
- |
- |
20.0 |
0.3 |
20.3 |
Other comprehensive income |
|
|
|
|
|
|
|
|
Remeasurement of retirement benefit |
|
|
|
|
|
|
|
|
schemes |
11 |
- |
- |
- |
- |
- |
- |
- |
Net movement of interest rate swaps - |
|
|
|
|
|
|
|
|
cash flow hedge |
|
- |
- |
(2.1) |
- |
- |
- |
(2.1) |
Tax on above components of other |
|
|
|
|
|
|
|
|
comprehensive income |
|
- |
- |
0.5 |
|
- |
- |
0.5 |
Total comprehensive income |
|
- |
- |
(1.6) |
- |
20.0 |
0.3 |
18.7 |
Transactions with owners recorded directly in equity |
|
|
|
|
|
|||
Dividends paid on equity shares |
|
- |
- |
- |
- |
(6.8) |
- |
(6.8) |
Share based payments |
|
- |
- |
- |
- |
0.3 |
- |
0.3 |
Disposal of non-controlling interests |
|
- |
- |
- |
- |
- |
(0.6) |
(0.6) |
|
|
- |
- |
- |
- |
(6.5) |
(0.6) |
(7.1) |
At 30 September 2024 |
|
15.6 |
38.0 |
0.8 |
277.6 |
451.5 |
3.3 |
786.8 |
|
|
|
|
|
|
|
|
|
At 3 April 2023 |
|
15.1 |
1.8 |
4.0 |
260.9 |
442.4 |
- |
724.2 |
Total comprehensive income |
|
|
|
|
|
|
- |
|
Profit for the 26-week period |
|
- |
- |
- |
- |
17.4 |
- |
17.4 |
Other comprehensive income |
|
|
|
|
|
|
|
|
Remeasurement of retirement benefit |
|
|
|
|
|
|
|
|
schemes |
11 |
- |
- |
- |
- |
(6.5) |
- |
(6.5) |
Fair value movement of interest rate swaps |
|
|
|
|
|
|
|
|
|
- |
- |
0.2 |
- |
- |
- |
0.2 |
|
Tax on above components of other |
|
|
|
|
|
|
|
|
comprehensive income |
|
- |
- |
- |
- |
1.6 |
- |
1.6 |
Total comprehensive income |
|
- |
- |
0.2 |
- |
12.5 |
- |
12.7 |
Transactions with owners recorded directly in equity |
|
|
|
|
|
|||
Dividends paid on equity shares |
|
- |
- |
- |
- |
(6.0) |
- |
(6.0) |
Share based payments |
|
- |
- |
- |
- |
0.2 |
- |
0.2 |
|
|
- |
- |
- |
- |
(5.8) |
- |
(5.8) |
At 2 October 2023 |
|
15.1 |
1.8 |
4.2 |
260.9 |
449.1 |
- |
731.1 |
Group statement of cash flow
For the 26 weeks ended 30 September 2024
|
|
Unaudited |
Unaudited |
Audited |
|
|
|
26 weeks |
26 weeks |
52 weeks |
|
|
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
|
|
2024 |
2023 |
2024 |
|
|
Notes |
£m |
£m |
£m |
|
Operating activities |
|
|
|
|
|
Net cash generated from operations |
7 |
45.2 |
41.3 |
86.0 |
|
Tax received/(paid) |
|
0.9 |
(7.0) |
(12.6) |
|
Net cash flow from operating activities |
|
46.1 |
34.3 |
73.4 |
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Proceeds from disposal of property and equipment1 |
|
3.9 |
- |
3.3 |
|
Purchases of property and equipment |
8 |
(21.7) |
(23.8) |
(48.5) |
|
Business combinations, net of cash acquired |
8 |
- |
(15.3) |
(144.5) |
|
Direct costs incurred in acquisition of leases |
|
(0.2) |
(0.4) |
(9.9) |
|
Proceeds from disposal of subsidiary2 |
|
2.3 |
- |
- |
|
Net cash used in investing activities |
|
(15.7) |
(39.5) |
(199.6) |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Issued equity, net of transaction costs |
12 |
- |
- |
- |
|
Interest paid |
|
(5.7) |
(2.8) |
(7.5) |
|
Equity dividends paid |
6 |
(6.8) |
(6.0) |
(12.4) |
|
Payments of principal portion of lease liabilities |
|
(3.0) |
(3.3) |
(6.1) |
|
Repayments of borrowings3 |
|
(28.5) |
(2.1) |
(41.1) |
|
Transaction costs incurred on borrowings |
|
(3.2) |
- |
(2.0) |
|
Proceeds from borrowings4 |
|
- |
9.5 |
201.5 |
|
Net cash flow (used in)/from financing activities |
|
(47.2) |
(4.7) |
132.4 |
|
|
|
|
|
|
|
(Decrease)/increase in cash |
|
(16.8) |
(9.9) |
6.2 |
|
Cash at the beginning of the period |
|
16.9 |
10.7 |
10.7 |
|
Cash at the end of the period |
|
0.1 |
0.8 |
16.9 |
|
|
|
|
|
|
|
1 During the current period to 30 September 2024, |
|||||
|
|||||
2 During the current period to 30 September 2024, the group sold its 53% shareholding in The Pioneer (City) Pub Company Limited, for a total consideration of
|
|||||
3 During the current period to 30 September 2024, the group paid down
|
|||||
4 During the prior 52-week period to 1 April 2024, the group entered into a new |
|||||
|
|||||
|
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTS
This interim report was approved by the board on 13 November 2024. 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 UK-adopted International Accounting Standards. These standards are applied from 2 April 2024 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 1 April 2024 (UK-adopted International Accounting Standards). 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 4, taxation, where the tax charge for the half year to 30 September 2024 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 (£m) rounded to the nearest
Statutory accounts for the period ended 1 April 2024 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.
Going concern
At 30 September 2024, the group had cash in bank of
As part of the directors' consideration of the appropriateness of adopting the going concern basis, the group has modelled a base case and two sensitised scenarios for the going concern period. The base case is the board approved forecast to March 2025 as well as the board approved strategic plan covering April to November 2025. The key judgements applied are the extent of any influence on trade due to economic uncertainty and its impact on consumers spending or indeed other one-off demand shocks, and the cost pressures that the hospitality industry is continuing to face.
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 15% in sales and 19% in EBITDA across the period. The cost inflation scenario includes an average 5% increase in the food cost base and 10% increase in general pub operating costs for the period with no retail price increases. 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 comfortable headroom on the group's debt facilities and all banking covenants are fully complied with throughout the going concern period.
The group has also performed a reverse stress test case. The 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. There would need to be a sales reduction of c.40% and profit reduction of c.60% between November 2024 and November 2025 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.
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 can 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 financial statements.
2. ADJUSTING ITEMS AND OTHER FINANCIAL MEASURES
During the period the cash flow impact of adjusting items was |
||||
|
26 weeks |
26 weeks |
52 weeks |
|
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
|
2024 |
2023 |
2024 |
|
|
£m |
£m |
£m |
|
Amounts included in operating profit |
|
|
|
|
Gain on disposal of subsidiary1 |
0.7 |
- |
- |
|
Net profit on disposal of properties2 |
0.4 |
- |
(1.3) |
|
Restructuring costs3 |
(2.9) |
- |
(0.1) |
|
Purchase costs - City Pub Group4 |
(0.9) |
- |
(6.2) |
|
Integration costs - City Pub Group5 |
(0.3) |
- |
- |
|
Impairment loss6 |
- |
(2.1) |
(5.5) |
|
Purchase costs7 |
- |
(0.8) |
(2.2) |
|
Tenant compensation8 |
- |
(0.6) |
(0.6) |
|
Upward movement on the revaluation of properties (note 8)9 |
- |
- |
2.9 |
|
Downward movement on the revaluation of properties (note 8)9 |
- |
- |
(15.7) |
|
|
(3.0) |
(3.5) |
(28.7) |
|
Tax attributable to above adjusting items |
0.2 |
(0.2) |
2.8 |
|
Impact of change in corporation tax rate |
- |
- |
- |
|
|
0.2 |
(0.2) |
2.8 |
|
Total adjusting items after tax |
(2.8) |
(3.7) |
(25.9) |
|
|
|
|
|
1 The gain on disposal of a subsidiary relates to the difference between the consideration received and the assets and liabilities disposed of as part of the disposal of the 53% shareholding in The Pioneer (City) Pub Company Limited. It also includes the derecognition of the non-controlling interest in this subsidiary at the date of disposal.
2 The net profit on disposal of properties related to the difference between cash, less disposal costs, received from the Plough (Beddington), Clock House (East Dulwich), Angel & Greyhound (Oxford) and an unlicensed property (Greenford), and the carrying value of their assets, at the date of disposal. The net profit on disposal of properties also included the loss on reclassification of one property to asset held for sale (note 10).
During the previous 52-week period to 1 April 2024, the profit on disposal of properties related to the difference between cash, less disposal costs, received from the sale of the Salt Room (Islington) and the carrying value of its assets, including goodwill, at the date of disposal. In addition, the loss on disposal of properties related to the difference between the value of right-of-use assets and lease liabilities of the old leases of the Guinea Grill (Mayfair), Wheatsheaf (Esher), Coat & Badge (Putney) and the Fellow (King's Cross), which were replaced with new leases. The net profit on disposal of properties also included the loss on reclassification of two properties to asset held for sale (note 10).
3 Restructuring costs related to severance costs paid to employees of City Pub Group. During the previous 52-week period to 1 April 2024, restructuring costs related to severance costs paid to employees of one of the acquired business combinations.
4 During the current period and the previous 52-week period to the 1 April 2024, purchase costs related to professional fees and stamp duty land tax arising on the acquisition of City Pub Group. See note 8.
5 Integration costs related to the integration of City Pub Group, to align with the rest of the group's operations to achieve common synergies.
6 During the previous 52-week period to 1 April 2024, impairment losses were recognised in relation to goodwill and right-of-use assets (
7 During the previous 52-week period to 1 April 2024, costs related to the purchase of the Libertine (Westbourne), White Hart (Ford), White Lion (Tenterden), Huntsman (Brockenhurst), Ship Inn (Noss Mayo) and the Tattenham Corner (Epsom). These included legal and professional fees and stamp duty land tax.
8 During the previous 52-week period to 1 April 2024, tenant compensation was paid to the tenants of the Clapham North (Clapham) and the King's Head Theatre (Islington) and related to the termination of their leases.
9 The net downward movement on the revaluation of properties in the previous 52-week period to 1 April 2024 related to net downward movements in excess of amounts recognised in equity. See note 9 in the statutory accounts for the period ended 1 April 2024 for further details.
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.
|
26 weeks |
26 weeks |
52 weeks weeks |
|
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
|
2024 |
2023 |
2024 |
|
|
£m |
£m |
£m |
|
Profit before tax |
25.3 |
24.5 |
20.7 |
|
Adjusting items |
3.0 |
3.5 |
28.7 |
|
Adjusted profit before tax |
28.3 |
28.0 |
49.4 |
|
Finance income |
(0.1) |
- |
- |
|
Finance costs |
9.9 |
3.1 |
8.1 |
|
Finance income for pension obligations |
- |
(0.1) |
(0.2) |
|
Adjusted operating profit |
38.1 |
31.0 |
57.3 |
|
Depreciation |
20.9 |
16.9 |
34.9 |
|
Adjusted EBITDA |
59.0 |
47.9 |
92.2 |
|
|
|
|
|
|
During the period, |
||||
|
|
|
|
|
During the period, |
||||
3. REVENUE
The recognition of revenue under each of the group's material revenue streams is as follows: |
||||
|
26 weeks |
26 weeks |
52 weeks |
|
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
|
2024 |
2023 |
2024 |
|
|
£m |
£m |
£m |
|
Drink sales |
158.6 |
123.9 |
242.9 |
|
Food sales |
72.8 |
59.3 |
120.1 |
|
Accommodation sales |
17.3 |
12.6 |
23.7 |
|
Total revenue from contracts with customers |
248.7 |
195.8 |
386.7 |
|
Other income1 |
1.3 |
0.7 |
2.1 |
|
Total revenue recognised |
250.0 |
196.5 |
388.8 |
|
|
|
|
|
|
1 Other income includes rental income and room hire. |
|
|
|
|
|
|
|
|
4. TAXATION
The taxation charge for the 26 weeks ended 30 September 2024 results in an effective tax rate of 19.87% (52 weeks ended 1 April 2024: 46.6%).
|
|
26 weeks |
26 weeks |
52 weeks |
|
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
Tax charged in the group income statement |
2024 |
2023 |
2024 |
|
£m |
£m |
£m |
||
Current tax |
|
|
|
|
|
Corporation tax expense |
5.8 |
6.5 |
8.4 |
|
Adjustment in respect of current tax of prior periods |
- |
- |
(1.4) |
|
|
5.8 |
6.5 |
7.0 |
Deferred tax |
|
|
|
|
|
Origination and reversal of temporary differences |
(0.8) |
0.6 |
1.5 |
|
Adjustment in respect of prior periods |
- |
- |
1.1 |
|
|
(0.8) |
0.6 |
2.6 |
Tax charge in the income statement |
5.0 |
7.1 |
9.6 |
The effective half year current tax rate of 23.01% is down from the 33.82% in the prior 52-week period to 1 April 2024. This is below the statutory rate of 25% (52 weeks ended 1 April 2024: 25%), largely due to the temporary differences arising from the capital allowances 'full expensing' at 100% of eligible expenditure and special rate allowance at 50% of eligible expenditure. It is lower than the prior 52-week period due to utilisation of tax losses brought forward by the entities in the City Pub Group in the 26 weeks ended 30 September 2024.
5. EARNINGS PER ORDINARY SHARE
(a) Weighted average number of shares |
|
|
|
|
26 weeks |
26 weeks |
52 weeks |
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
2024 |
2023 |
2024 |
|
Number |
Number |
Number |
Basic weighted average number of ordinary shares in issue |
62,096,842 |
58,484,602 |
58,762,467 |
Dilutive potential ordinary shares from outstanding employee share options |
|
|
|
9,875 |
20,236 |
36,547 |
|
Diluted weighted average number of shares |
62,106,717 |
58,504,838 |
58,799,014 |
|
|
|
|
(b) Earnings attributable to shareholders of the parent company |
|||
|
|
|
|
|
26 weeks |
26 weeks |
52 weeks |
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
2024 |
2023 |
2024 |
|
£m |
£m |
£m |
Profit for the period |
20.0 |
17.4 |
11.1 |
Adjusting items |
3.0 |
3.5 |
28.7 |
Tax attributable to adjusting items |
(0.2) |
0.2 |
(2.8) |
Adjusted earnings after tax |
22.8 |
21.1 |
37.0 |
|
|
|
|
Basic earnings per share |
|
|
|
|
Pence |
Pence |
Pence |
Basic |
32.21 |
29.75 |
18.89 |
Effect of adjusting items |
4.51 |
6.33 |
44.08 |
Adjusted basic |
36.72 |
36.08 |
62.97 |
|
|
|
|
Diluted earnings per share |
|
|
|
|
Pence |
Pence |
Pence |
Diluted |
32.20 9 |
29.74 |
18.88 |
Effect of adjusting items |
4.51 |
6.33 |
44.05 |
Adjusted diluted |
36.71 |
36.07 |
62.93 |
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 9,875 (2023: 20,236) 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.
6. DIVIDENDS ON EQUITY SHARES
|
26 weeks |
26 weeks |
52 weeks |
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
2024 |
2023 |
2024 |
|
Pence |
Pence |
Pence |
Final dividend paid (previous period) |
10.88 |
10.26 |
10.26 |
Interim dividend paid (current period) |
- |
- |
10.88 |
|
10.88 |
10.26 |
21.14 |
The table above sets out dividends that have been paid. The final dividend in respect of the period ended 1 April 2024, at a cost of
7. NET CASH GENERATED FROM OPERATIONS AND ANALYSIS OF NET DEBT
|
26 weeks |
26 weeks |
52 weeks |
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
2024 |
2023 |
2024 |
|
£m |
£m |
£m |
Profit before tax |
25.3 |
24.5 |
20.7 |
Net finance cost |
9.8 |
3.1 |
8.1 |
Finance charge for pension obligations |
- |
(0.1) |
(0.2) |
Operating profit |
35.1 |
27.5 |
28.6 |
Depreciation of property and equipment |
16.4 |
13.3 |
27.6 |
Depreciation of right-of-use assets |
4.5 |
3.6 |
7.3 |
Impairment of goodwill and right-of-use assets |
- |
2.1 |
5.5 |
Movement on the revaluation of properties |
- |
- |
12.8 |
Net profit on disposal of property |
(0.4) |
- |
1.3 |
Net profit on disposal of subsidiary |
(0.7) |
- |
- |
Difference between pension service cost and cash contributions paid |
(1.1) |
(0.7) |
(1.4) |
Share based payments |
(0.3) |
(0.2) |
(0.7) |
Movements in working capital |
|
|
|
- Inventories |
(0.1) |
- |
0.1 |
- Receivables |
(0.1) |
(0.4) |
0.5 |
- Payables |
(8.1) |
(3.9) |
4.4 |
Net cash generated from operations |
45.2 |
41.3 |
86.0 |
|
|
|
|
Analysis of group net debt |
|
|
|
|
At 30 Sep |
At 2 Oct |
At 1 Apr |
|
2024 |
2023 |
2024 |
|
£m |
£m |
£m |
Cash |
0.1 |
0.8 |
16.9 |
Current borrowings and loan capital |
(43.0) |
(20.0) |
(71.5) |
Current lease liabilities |
(6.6) |
(4.7) |
(6.8) |
Non-current borrowings and loan capital |
(212.9) |
(91.6) |
(213.2) |
Non-current lease liabilities |
(84.1) |
(68.5) |
(85.0) |
Net debt |
(346.5) |
(184.0) |
(359.6) |
|
|
8. PROPERTY AND EQUIPMENT
|
|
Fixtures, |
|
|
Land & |
fittings & |
|
|
buildings |
equipment |
Total |
Cost or valuation |
£m |
£m |
£m |
At 3 April 2023 |
784.1 |
162.2 |
946.3 |
Additions |
8.3 |
40.2 |
48.5 |
Business combinations |
146.3 |
22.7 |
169.0 |
Disposals |
(3.0) |
(0.4) |
(3.4) |
Transfer out to asset held for sale |
(2.5) |
(0.5) |
(3.0) |
Fully depreciated assets |
(2.3) |
(21.9) |
(24.2) |
Revaluation |
|
|
|
- effect of upward movement in property valuation |
42.8 |
- |
42.8 |
- effect of downward movement in property valuation |
(20.4) |
- |
(20.4) |
At 1 April 2024 |
953.3 |
202.3 |
1,155.6 |
Additions |
4.6 |
17.1 |
21.7 |
Disposals |
(0.9) |
(0.4) |
(1.3) |
Transfer from right-of-use assets1 |
3.2 |
0.4 |
3.6 |
Transfer out to asset held for sale |
(2.6) |
(0.1) |
(2.7) |
Fully depreciated assets |
(0.3) |
(10.6) |
(10.9) |
At 30 September 2024 |
957.3 |
208.7 |
1,166.0 |
|
|
|
|
Depreciation and impairment |
|
|
|
At 3 April 2023 |
28.0 |
75.8 |
103.8 |
Depreciation charge |
1.6 |
26.0 |
27.6 |
Disposals |
- |
(0.1) |
(0.1) |
Transfer out to asset held for sale |
(0.5) |
(0.2) |
(0.7) |
Fully depreciated assets |
(2.3) |
(21.9) |
(24.2) |
Revaluation |
|
|
|
- effect of upward movement in property valuation |
(3.4) |
- |
(3.4) |
- effect of downward movement in property valuation |
15.7 |
- |
15.7 |
At 1 April 2024 |
39.1 |
79.6 |
118.7 |
Depreciation charge |
0.9 |
15.5 |
16.4 |
Transfer out to asset held for sale |
- |
(0.2) |
(0.2) |
Disposals |
(2.0) |
- |
(2.0) |
Fully depreciated assets |
(0.3) |
(10.6) |
(10.9) |
At 30 September 2024 |
37.7 |
84.3 |
122.0 |
|
|
|
|
Net book value |
|
|
|
At 3 April 2023 |
756.1 |
86.4 |
842.5 |
At 1 April 2024 |
914.2 |
122.7 |
1,036.9 |
At 30 September 2024 |
919.6 |
124.4 |
1,044.0 |
|
|
|
|
1 During the current period the group acquired the freehold interest in the Stag (Belsize Park), which was acquired as a leasehold during the prior period.
Business combinations
The City Pub Group
In the prior period to 1 April 2024, the group acquired the entire issued share capital of the City Pub Group, a premium pub and hotel operator. The total consideration was
Crooked Billet
In the prior period to 1 April 2024, the group acquired the entire issued share capital of Crooked Billet Limited, a subsidiary company which owns and operates the Crooked Billet (Clapton) for a total cash consideration of
Other business combinations
In the prior period to 1 April 2024, the group acquired the Libertine (Westbourne), White Hart (Ford), White Lion (Tenterden), Huntsman (Brockenhurst), Ship Inn (Noss Mayo) and the Tattenham Corner (Epsom), which formed business combinations for a total cash consideration of
Other acquisitions
During the period the group acquired an unlicensed property (Wandsworth) as an asset acquisition for a total cash consideration of
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 1 April 2024 still represents the best estimate of the fair value of the estate at 30 September 2024.
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 1 April 2024. 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
9. 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: |
||||
|
|
|
|
|
|
|
Right-of-use assets |
Lease |
|
|
|
liabilities |
||
|
|
£m |
£m |
|
As at 3 April 2023 |
|
142.9 |
71.7 |
|
Additions |
|
23.8 |
13.9 |
|
Business combinations |
|
33.5 |
16.7 |
|
Lease amendments |
|
1.4 |
1.4 |
|
Depreciation expense |
|
(7.3) |
- |
|
Accretion of interest |
|
- |
2.8 |
|
Payments |
|
- |
(8.9) |
|
Impairments |
|
(3.8) |
- |
|
Lease terminations |
|
(7.3) |
(5.8) |
|
As at 1 April 2024 |
|
183.2 |
91.8 |
|
Additions |
|
0.4 |
0.4 |
|
Lease amendments |
|
2.1 |
2.0 |
|
Depreciation expense |
|
(4.5) |
- |
|
Accretion of interest |
|
- |
2.1 |
|
Payments |
|
- |
(5.1) |
|
Disposals |
|
(7.0) |
(0.5) |
|
As at 30 September 2024 |
|
174.2 |
90.7 |
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 both the current and prior period largely represent upwards market rent reviews.
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 using the budget approved by the board. At 30 September 2024, no impairment has been recognised in respect of the current period (1 April 2024:
At the start of the period, in light of the recent acquisition of the City Pub Group, management reviewed its grouping of CGUs for the purposes of assessing the impairment of goodwill. Based on the result of this review, management has determined that the group now has one group of CGUs, being total managed houses, which aligns with the operating segments identified by management. The key factors considered in management's conclusion include the groupwide synergies created as a result of the City Pub Group acquisition, alongside the group internally reporting and planning resources based on the results of the combined businesses. Before initiating the change in CGU grouping, in accordance with IAS 36, management performed a value in use impairment test on the pre-existing groups of CGUs and determined there to be no impairment of goodwill within any of the groups.
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.
10. ASSET HELD FOR SALE
|
Unaudited |
Unaudited |
Audited |
|
|
at 30 Sep |
at 2 Oct |
at 1 Apr |
|
|
2024 |
2023 |
2024 |
|
|
£m |
£m |
£m |
|
Goodwill |
- |
0.1 |
- |
|
Property and equipment |
0.6 |
3.0 |
2.2 |
|
Property held for sale |
0.6 |
3.1 |
2.2 |
|
|
|
|
|
|
At 30 September 2024 one property was classified as held for sale based on its fit with the remaining group's estate. Sale is expected within 12 months from the reporting date. On reclassifying the property as held for sale a charge of |
||||
11. RETIREMENT BENEFIT SCHEMES
The table below summarises the movement in the retirement benefit schemes in the period.
|
26 weeks |
26 weeks |
52 weeks |
|
|
to 30 Sep |
to 2 Oct |
to 1 Apr |
|
|
2024 |
2023 |
2024 |
|
|
£m |
£m |
£m |
|
Changes in the present value of the retirement benefit schemes are as follows: |
||||
Opening surplus |
0.1 |
3.7 |
3.7 |
|
Current service cost |
(0.1) |
(0.1) |
(0.1) |
|
Contributions |
1.1 |
0.8 |
1.6 |
|
Finance income for pension obligations |
- |
0.1 |
0.2 |
|
Remeasurement through other comprehensive income |
0.8 |
(6.5) |
(4.7) |
|
|
1.9 |
(2.0) |
0.7 |
|
IFRIC 14 adjustment |
(0.8) |
- |
(0.6) |
|
Closing surplus/(deficit) |
1.1 |
(2.0) |
0.1 |
|
|
|
|
|
|
As at 1 April 2024, the group determined that the accounting surplus should be recognised after deducting withholding tax, which would be levied prior to the future refunding of any surplus and would be payable by the Trustees of the Scheme. The pension surplus has therefore been presented on a net basis at 30 September 2024 and at 1 April 2024. |
||||
12. SHARE CAPITAL
Total share capital comprises the nominal value of the share capital issued and fully paid of
13. POST BALANCE SHEET EVENTS
Subsequent to the period end the group sold the Tavern (Cheltenham), which was classified as held for sale at 30 September 2024, for a total cash consideration of
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.