Young's brews up a frothy rise in profits

Published on Thursday 19 November 2009 21:18

PUBS and brewing group Young & Co yesterday reported an "encouraging" start to its second half after bucking tough market conditions to deliver a 3.7 per cent lift in interim profits.

The London-based firm – which has 123 managed and 99 tenanted pubs – reported underlying pre-tax profits of 12.3 million in the six months to 26 September.

Young's said like-for-like sales had improved since the half-year, up 0.9 per cent in the first seven weeks across its larger managed pubs arm, which accounts for 88.8 per cent of sales. This sales lift compares with a 0.7 per cent fall in managed house revenues.

Young's said it had "resisted the temptation to chase sales" by slashing prices to preserve its premium position and long-term profits.

The half-year profits rise was also helped by Young's joint venture brewery arm, Wells & Young's, in which it has a 40 per cent share with Charles Wells. The venture, which brews beers such as the widely-available Bombardier, saw a "solid performance" in the first half, contributing 1.8m to pre-tax profits.

The brewery had a good summer, helped by a continued focus on cost-cutting and efficiency. Young's added that further savings have been made by restructuring the brewery's packaging lines.

Stephen Goodyear, chief executive of Young & Co, said: "Trading conditions will undoubtedly remain challenging for the remainder of the financial year.

"However, we have achieved a resilient performance in the year to date."

He said the group's balance sheet was one of the strongest among its peers, opening the door for acquisitions.