Circular re GPG resolution
Young & Co's Brewery PLC
26 June 2001
26 June 2001
YOUNG & CO'S BREWERY P.L.C.
RECOMMENDS REJECTION OF GUINNESS PEAT PROPOSAL
In a circular to shareholders, the Board of Young & Co's Brewery P.L.C.
('Young's') has recommended rejection of the latest resolution proposed by
Guinness Peat Group plc ('GPG').
The circular contains the following letter from Chairman John Young:
'Dear shareholders,
As you may be aware, Guinness Peat Group plc ('GPG'), holding 10.06% of the
voting shares and acting through a nominee company, has again requisitioned
that a resolution be put to the Annual General Meeting. It is entitled to do
so under Section 376 of the Companies Act 1985. This resolution, together
with a letter from its UK Executive Director, Mr Blake Nixon, is set out in
full in the accompanying pages.
In this year's resolution, GPG is calling for the Directors to formulate
proposals for the Company to be transferred to the sole ownership of the Ram
Brewery Trust and the Young family directors.
The Board has noted the unusual nature of this resolution, which appears to
have been designed to enable GPG to sell its shareholding in Young's, rather
than for the long term benefit of the Company.
The Board has not received any approach from the Young family or connected
persons about taking the company private. Indeed, having received a copy of
the proposals from GPG, the trustees of the Ram Brewery Trust and relevant
Young family directors have stated that they would vote against any
resolutions for their implementation.
Accordingly no offer exists and with no support from the relevant
shareholders, the proposals contained in GPG's resolution cannot be
implemented. Your directors therefore recommend that shareholders vote
against this resolution.
Mr Nixon's letter contains a further attack on the performance of the business
and accuses the Board of inaction and of a failure to state its strategy. It
gives no credit for the sustained progress that has been achieved by Young's
over recent years. It also fails to acknowledge the fact that the Board has
been consistently pursuing a straightforward strategy to improve performance.
This strategy has been clearly communicated to all shareholders, including GPG
with whom we have had regular meetings going as far back as 1997.
We have successfully grown our sales by means of a combination of targeted
investment in our existing pub estate, carefully selected acquisitions of new
high quality pubs and increased marketing and distribution to enhance the
appeal and availability of Young's beers in the free trade. This, together
with the brewing contracts we have secured from other brewers, has enabled us
to improve significantly the volume through the Brewery and has delivered
considerable financial progress across the Group over the past four years,
including:
* a 28% increase in turnover
* a 26% improvement in operating margin
* a 61% increase in operating profit
* a 79% increase in adjusted* profits before tax
* a 91% increase in adjusted* earnings per share
(* excludes profits from sales of properties)
In line with this improvement, we have also increased dividends over the
period by more than double the rate of inflation.
We still have plenty of financial muscle to continue to deliver our strategy
and, as stated in the Annual Report, 'We are committed to continuing this
progress and to go on examining all investment opportunities that will enhance
shareholder value'.
It is clear that the proposals in GPG's resolution would not be implemented.
Accordingly, the resolution DOES NOT have the support of your directors and is
being put to shareholders solely to comply with Section 376. Your directors
recommend that shareholders VOTE AGAINST this resolution as they intend to do
in respect of their own beneficial holdings.'
-ends-
For further information:
James Longfield/John Olsen
Hogarth Partnership 0207 357 9477
Note to Editors:
The Young & Co's Brewery P.L.C. Annual General Meeting will take place at 11:
30am on Tuesday July 17 at the Wandsworth Town Hall, Wandsworth, London SW18.
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