Final Results - 53 Weeks to 1 April 2000
Young & Co's Brewery PLC
8 June 2000
YOUNG & CO.'S BREWERY, P.L.C.
Preliminary results
For the 53 weeks to 1 April 2000
Key highlights:
* Turnover increased to £91.7 million up 9.9%
* Operating profit increased to £9.9 million up 10.5%
* Profit before tax increased to £8.5 million up 15.2%
* Basic earnings per share of 48.59p up 19.5%
* Adjusted earnings per share of 40.25p** up 10.9%
* Dividend per share increased to 18.10p up 6.5%
* Assets per share increased to £10.86 up 3.3%
* Total beer production up 26% and own beer production up 5.6%
* New cask ale (Triple 'A') launched in April - aimed at younger
market
* £12.3m invested in pub acquisitions and refurbishments during
the year
* Gearing at 22% provides plenty of scope for further investment
** Adjusted to exclude profit on sale of property in 1999 and 2000.
Commenting on the results, John Young, Chairman of Young's Brewery
said:
'This is our third successive year of double-digit growth at
Young's and is the result of our strategy of maximising returns on
existing assets, disposing of our under-performing ones, making
strategic investments against consistent selection criteria,
developing sales through all trade channels and minimising the
cost base of the brewery. We have increased beer production and
most notably are bucking the market trend with healthy increases
in our own beer brands. The recent launch of Triple 'A' will
further assist this process and introduce a new generation of beer
drinkers to Young's beers. We have plenty of scope for further
investment, which, together with operational improvements, give us
confidence for continued progress in the coming year.'
For further information:
Pat Read, Chief Executive 020 8875 7000
Peter Whitehead, Finance Director
Young & Co's Brewery
James Longfield, 020 7357 9477
Hogarth Partnership
YOUNG & CO.'S BREWERY, P.L.C.
Preliminary results
FOR THE 53 WEEKS TO 1 APRIL 2000
Operational review
The year finished with profits before tax up 15.2% at £8.5m, basic
earnings per share up 19.5% at 48.59p and, once adjusted for
property sales, increased by 10.9%.
This is the third successive year of double-digit growth at
Young's and is the result of our strategy of maximising returns on
existing assets, disposing of under-performing ones, making
strategic investments against consistent selection criteria,
developing sales through all trade channels and minimising the
cost base of the brewery.
Our results show sustained progress as the actions taken by
management continue to deliver volume, turnover and profit growth.
The annual general meeting on 18 July will be asked to approve a
final dividend of 9.40p, a 6.8% increase over last year, payable
on 20 July to shareholders on the register on 23 June 2000. This
will give an 18.10p dividend for the year, up 6.5% on last year.
Brewing and brands
Total beer sales increased 19% by volume. Beer production was up
26%, largely due to brewing contracts, which has brought about a
welcome reduction in unit costs. This contract beer forms part of
a strategic partnership with major brewers, a partnership that in
turn provides our pubs with high profile lager brands.
Significantly, the production of our own beers was up 5.6%,
defying market trends.
We have always recognised that the long-term success of the
brewery depends on the performance of our own established brands
and on developing new ones. In this regard, we are delighted to
announce that we have launched Triple 'A', a new cask ale aimed at
a new generation of beer drinkers.
Young's Triple 'A' is designed to attract younger pub-goers to
traditional draught ale. It is brewed at 4.0% alcohol by volume,
is served cool, has a smooth, creamy flavour and a slightly fruity
nose.
Triple 'A' was successfully tested in a number of our pubs over a
four month period before being launched through our estate in
April, with initial sales at encouraging levels. It is already
available in some pub groups and will become nationally available
through the free trade and other pub chains during the summer.
We continue to retain focus on tight control of costs within the
brewery and at the end of the year we reduced manning levels once
more through automation leading to voluntary redundancies. The
resulting savings will arise in the current year.
Our beers continue to win awards. In this year's Brewing Industry
International Awards, which were contested by 732 beers from 40
countries, we took two world championships, four gold medals and
two silvers - the best performance by any single brewery.
We won the International Speciality Beers championship and gold
medal with Young's Double Chocolate Stout, which also won a gold
medal in its class. Young's Bitter won the International Keg Ales
championship and gold medal, plus a gold medal in its class.
Silver medals went to Young's Triple 'A' and to Young's Oatmeal
Stout.
Young's won four prizes in the British Bottlers' Institute awards:
a gold medal for Special and diplomas for Light Ale, Old Nick and
Special London Ale, which had earlier been voted Champion Bottle
Conditioned Beer of the Year at the Campaign for Real Ale's Great
British Beer Festival. Young's Double Chocolate Stout also won a
gold medal in the International Beer and Cider competition,
sponsored by the publishers of Off Licence News and The Grocer.
Managed houses and hotels
We have maintained our beer volumes whilst wines and spirits
volume is up by 9% and food by 11%. Total sales in the managed
estate were up 8% with profits up by 3%. This was achieved
despite the impact on trading of pub closures for refurbishment
and the costs associated with new openings.
Five new managed houses were bought during the year for a total
investment of £4.2m. They were the Red Lion, Radlett with 13
bedrooms, the Ship, East Grinstead, the Cock Inn, Boughton
Monchelsea near Maidstone, the Bar Verve, Slough, and Finch's,
Chelmsford. This brings our total managed estate to 118.
The Master Gunner near St Paul's has been sold, but will in due
course reopen as part of the new Paternoster Square development.
Investment in our managed pubs and hotels continues and during the
year we spent a further £5.2m on refurbishment at nine managed
pubs and extensive redevelopments at three pub/hotels. By July we
will have a total of 281 rooms (up 84), with planning permission
granted for a further 96. Occupancy rates at our hotels were
slightly down on last year because some of the new ones are not
yet fully established, but the average spend was up 3%.
Congratulations to Richard Williamson, manager of the Rose and
Crown, Wimbledon, who was a regional winner and one of the
national finalists in the Innkeeper of the Year competition,
organised by the British Institute of Innkeeping.
Tenanted houses
Over the last year we have entered into several joint partnership
investment schemes with our tenants. Some examples of these are:
The Duke of Cambridge, Battersea, The Clock House, Peckham, The
Thatched House, Hammersmith and The Red Cow, Richmond.
We have purchased the Court House, Dartford, which brings our
total tenanted estate to 68.
Beer volumes in our tenanted houses were down by 2% with wines and
spirits up 9%. Profits were unchanged.
The Duke of Cambridge, Battersea, was runner-up in the Times 1999
National Pub of the Year competition. Congratulations to our
tenant, Rupert Clevely, and all his staff.
Retail generally
During the year we spent £12.3m developing our estate with six new
acquisitions and 34 refurbishments ensuring our pubs remain the
best in the country.
Our total estate now stands at 186 pubs and hotels, of which 148
are freehold. Our investment policy regarding new sites is always
location driven. We also seek to take a long-term view on our pub
portfolio and wherever possible, seek to acquire freeholds.
In order to comply with new accounting standards, we have for the
first time provided £0.2m for the depreciation of freehold
property.
We at Young's retain our belief in the benefit of running pubs on
an individual basis, where the licencees are encouraged to use
their skills to meet their customers' requirements. This has led
to the rich diversity of our pubs which is becoming increasingly
popular with customers.
Free trade
Free trade has enjoyed an excellent year with overall volumes up
13% and own beer volumes up 14%. The acquisition of the Waggle
Dance brand has assisted in continued and rapid growth in take
home trade, building on an already well established brand portfolio
which enjoys national status and as already mentioned has received many
awards.
The strength of our brands and the first class service we have
been able to offer our customers have strengthened our overall
presence in the free trade stretching from Land's End to Inverness.
Exports
Overall exports increased by 35% in volume, with a particularly
strong performance in America, where the increase was 42%.
Exports now comprise 5.5% of our own branded production.
Marketing
Our latest advertising featuring our Ram has been displayed on
poster sites throughout London. This campaign has strengthened the
Young's brand, appealing to existing and new drinkers in our tied
and free trade. The development of Triple 'A' is a step towards
ensuring that the next generation of drinkers enjoy real ale.
Continued press and poster campaigns supporting Triple 'A' in
addition to the rest of the Young's product range will run
throughout the next year.
Cockburn & Campbell
Profits from our wines and spirits division rose by 17%, the
result of increases in volume and more competitive buying
opportunities presented by the weak euro.
Young's own whisky, The Royal & Ancient, won the gold medal for
blended whiskies in the 1999 International Wine and Spirit
competition.
Outlook
In spite of a year of high capital expenditure, gearing at the end
of the year is 22% with interest cover at 4.1 times. This
provides us with an excellent platform for targeted expansion in
our London heartland, the Home Counties and in particular the
commuter towns. This room for investment, together with further
developments in our existing estate and operational improvements,
give us confidence for further progress in the coming year.
YOUNG & CO.'S BREWERY, P.L.C.
GROUP PROFIT AND LOSS ACCOUNT
For the 53 weeks ended 1 April 2000
2000 1999
£000 £000
------------------------------------------------------------------
Turnover 91,652 83,372
Net operating costs (81,729) (74,395)
------------------------------------------------------------------
Operating profit 9,923 8,977
Profit on sales of properties 1,035 713
------------------------------------------------------------------
Profit on ordinary activities
before interest 10,958 9,690
Net interest charge (2,416) (2,272)
------------------------------------------------------------------
Profit on ordinary activities
before tax 8,542 7,418
Tax on profit on ordinary
activities (2,402) (2,231)
------------------------------------------------------------------
Profit on ordinary activities
after tax 6,140 5,187
Preference dividends on
non-equity shares (113) (107)
------------------------------------------------------------------
Profit attributable to
ordinary shareholders 6,027 5,080
Ordinary dividends
on equity shares (2,264) (2,201)
------------------------------------------------------------------
Retained profit for the
financial period 3,763 2,879
------------------------------------------------------------------
Pence Pence
------------------------------------------------------------------
Basic earnings per 50p ordinary share 48.59 40.66
Diluted basic earnings per 50p ordinary share 48.12 40.48
------------------------------------------------------------------
Adjusted earnings per 50p ordinary share 40.25 36.30
==================================================================
YOUNG & CO.'S BREWERY, P.L.C.
BALANCE SHEETS
At 1 April 2000
Group Company
-------------------------------------------------------------------
2000 1999 2000 1999
£000 £000 £000 £000
-------------------------------------------------------------------
Fixed assets
Tangible fixed assets 175,460 167,251 175,460 166,551
Investments 1,983 1,300 2,025 2,100
-------------------------------------------------------------------
177,443 168,551 177,485 168,651
-------------------------------------------------------------------
Current assets and liabilities
Stocks 4,637 4,438 4,637 4,384
Debtors 6,862 5,816 6,862 5,218
Cash 651 4,035 651 4,021
-------------------------------------------------------------------
12,150 14,289 12,150 13,623
-------------------------------------------------------------------
Creditors: amounts
falling due
within one year 17,792 14,729 17,834 17,191
-------------------------------------------------------------------
Net current liabilities (5,642) (440) (5,684) (3,568)
-------------------------------------------------------------------
Total assets less
current liabilities 171,801 168,111 171,801 165,083
Creditors: amounts falling
due after more than
one year 30,224 30,341 30,224 30,341
Provisions for liabilities
and charges 5,565 5,521 5,565 5,498
-------------------------------------------------------------------
136,012 132,249 136,012 129,244
===================================================================
Capital and reserves
Called-up share
capital: equity 6,475 6,475 6,475 6,475
non-equity 1,361 1,361 1,361 1,361
Share premium account 1,425 1,450 1,425 1,450
Revaluation reserve 91,544 91,587 88,831 88,874
Profit and loss account 35,207 31,376 37,920 31,084
-------------------------------------------------------------------
Equity shareholders' funds 134,651 130,888 134,651 127,883
Non-equity shareholders' funds 1,361 1,361 1,361 1,361
-------------------------------------------------------------------
136,012 132,249 136,012 129,244
===================================================================
YOUNG & CO.'S BREWERY, P.L.C.
GROUP CASH FLOW STATEMENT
For the 53 weeks ended 1 April 2000
2000 1999
£000 £000
------------------------------------------------------------------
Net cash inflow from operating
activities 18,164 14,591
Interest received 130 70
Interest paid (2,645) (2,405)
Non-equity dividends paid (113) (107)
------------------------------------------------------------------
Returns on investments and
servicing of finance (2,628) (2,442)
------------------------------------------------------------------
Corporation tax paid (2,349) (1,734)
------------------------------------------------------------------
Purchase of tangible fixed assets (15,563) (10,112)
Sales of tangible fixed assets 1,804 2,707
Purchase of investments (478) -
------------------------------------------------------------------
Capital expenditure (14,237) (7,405)
------------------------------------------------------------------
Equity dividends paid (2,227) (2,137)
------------------------------------------------------------------
Cash (outflow)/inflow before the use
of liquid resources and financing (3,277) 873
(Decrease)/increase in loan capital (87) 2,347
(Decrease) in lease finance (20) (20)
------------------------------------------------------------------
(Decrease)/increase in cash in period (3,384) 3,200
==================================================================
GROUP RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
For the 53 weeks ended 1 April 2000
2000 1999
£000 £000
------------------------------------------------------------------
(Decrease)/increase in cash in period (3,384) 3,200
Decrease/(increase) in debt in period 107 (2,327)
------------------------------------------------------------------
(Increase)/decrease in net debt in period (3,277) 873
Opening net debt (26,437) (27,310)
------------------------------------------------------------------
Closing net debt (29,714) (26,437)
------------------------------------------------------------------
GROUP NET CASH INFLOW FROM OPERATING ACTIVITIES
For the 53 weeks ended 1 April 2000
------------------------------------------------------------------
2000 1999
£000 £000
------------------------------------------------------------------
Operating profit 9,923 8,977
Profit on sales of properties 1,035 713
------------------------------------------------------------------
10,958 9,690
Depreciation 5,980 5,279
Profit disposal of tangible fixed assets (1,224) (721)
(Increase)/decrease in working capital
Stocks (199) (428)
Debtors (1,046) (1,744)
Creditors 3,695 2,515
------------------------------------------------------------------
Net cash inflow from operating activities 18,164 14,591
NOTES
1. Recognised gains and losses
The results above are all in respect of the continuing operations
of the group. There are no recognised gains or losses other than
those disclosed above.
2. Taxation
Corporation tax has been provided at a rate of 30% (1999: 31%) on
the profits for the period ended 1 April 2000.
3. Earnings and dividends on equity shares
2000 1999
Pence Pence
------------------------------------------------------------------
Basic earnings per 50p ordinary share 48.59 40.66
Effect of profit on sales of properties (8.34) (4.36)
------------------------------------------------------------------
Adjusted earnings per 50p ordinary share 40.25 36.30
==================================================================
The weighted average number of ordinary shares in issue is 12,403,737
(1999: 12,493,423).
Diluted earnings per ordinary share are calculated by adjusting
basic earnings per ordinary share to reflect the notional exercise
of the weighted average number of ordinary share options
outstanding during the year. The resulting weighted average number
of ordinary shares is 12,525,792 (1999: 12,550,676).
2000 1999
Pence Pence
------------------------------------------------------------------
Interim dividend 8.70 8.20
Proposed final dividend 9.40 8.80
------------------------------------------------------------------
18.10 17.00
==================================================================
4. Accounts
The above financial information does not amount to full accounts
within the meaning of S.240 of the Companies Act 1985. Full
accounts for the period ended 27 March 1999, including an
unqualified auditors' report, have been delivered to the Registrar
of Companies.
The statutory accounts for the period ended 1 April 2000,
including an unqualified auditors report, will be delivered to the
Registrar of Companies. This preliminary announcement is prepared
on the basis of the same accounting policies as set out in the
previous annual accounts.
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