Young & Co.'s Brewery, P.L.C. Class A · LSE:YNGA
Young & Co.'s Brewery, P.L.C. Class A — H1 2007 Earnings Presentation
33 slides from Young & Co.'s Brewery, P.L.C. Class A's earnings presentation, Nov 16, 2006
Slide 1: Interim Results for the 26 weeks ended 30 September 2006
Interim Results for the 26 weeks ended 30 September 2006 16 November 2006 1
Slide 2: Agenda
Agenda 1. Results review 2. Retail operations 3. Wells & Young's Brewing Company 4. Strategy & outlook 2
Slide 3: 1. Results review
’ 1. Results review EST. ¥ ce Dg yot a [YOUNGS]
Slide 4: Significant events and highlights
Significant events and highlights • Period of enormous change – Formation of Wells & Young’s Brewing Co. – Sale of Ram Brewery site – Death of John Young • Strong Managed pubs performance – Turnover up 15.2% – Operating profit up by 7.1% • Retail investment of £37.4 million • Recent estate valuation
Slide 5: Financial highlights
Financial highlights • Turnover £69.1M up 10.6% • Adjusted profit before tax £5.8M up 4.8% • Adjusted earnings per share 33.83p up 6.4% • Reported profit before tax £42.7M not comparable • Dividend per share 18.00p up 50.0% 5
Slide 6: Young's share price performance
Young’s share price performance Three Three year year share share price price performance performance Y oung's ("A" share) FTSE250 I ndex (rebased) 3,250 3,000 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 Nov-03 M ar-04 Jul-04 Nov-04 M ar-05 Jun-05 O c t-05 Feb-06 Jun-06 O c t-06 Source: Data
Slide 7: Operating exceptional costs
Operating exceptional costs £000’s CGT on ESOP allocated shares 1,060 Property valuations 200 Total exceptional costs £1,260 7
Slide 8: Non-operating exceptional profit
Non-operating exceptional profit £000’s Proceeds from Wandsworth sites 69,000 Net book value of the sites (10,849) Assets held on the sites (11,543) Gain on disposal of Wandsworth sites 46,608 Cost of fundamental reorganisation (4,404) Gain on sale and reorganisation 42,204 8
Slide 9: Period of strong investment
Period of strong investment First half First half Full year 30 Sept 06 1 Oct 05 1 April 06 £M £M £M EBITDA 11.5 11.3 22.2 Cash operating exceptional items - (0.3) (1.9) Working capital movements (2.0) (1.3) 1.5 Interest, tax and dividends (5.3) (4.9) (9.9) Free cash flow 4.2 4.8 11.9 Capital expendi
Slide 10: Step change in dividend
Step change in dividend First half First half Full year 30 Sept 06 1 Oct 05 1 April 06 £M £M £M Net debt £102.3M £53.1M £54.4M Percentage fixed rate 38% 74% 72% Debt/EBITDA* 4.5 2.4 2.5 Interest cover (adjusted) 3.2 times 3.7 times 3.5 times Dividend cover ** 1.9 times 2.7 times 2.4 times * On annua
Slide 11: Revaluation of pub estate
Revaluation of pub estate Valuation NAV Per share £M £ Recent estate valuation (Fleurets) 399 31.87 Increase in value 174 15.01 This valuation has been made in accordance with the RICS Appraisal and Valuation Standards (Red Book) and represents the aggregate sum total of the property assets. This is
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Slide 13: 2. Retail operations
’ 2. Retail operations EST. ¥ A Pe [YOUNGS]
Slide 14: Retail highlights
Retail highlights Retail success from delighting customers with high service standards, quality food, market leading drinks and stylish pubs • 14 new pubs acquired • £32.5M invested on new pubs • Strong sales and profit growth in managed houses • Tenanted estate transfers landmark sites to managemen
Slide 15: Managed house highlights
Managed house highlights • Sales up 15.2% and up 11.2% LFL (7.0% uninvested) – Food sales up 27.2%, the result of clear focus through segmentation – Food sales now 22.4% of managed turnover – RevPAR up 9.0% at £40.73 • Operating profit up 7.1% – Significant impact from changes and investments in the
Slide 16: Managed estate development
Managed estate development • £31.4M invested in the managed estate • Acquired 8 managed pubs • Two new riverside pubs opened Riverside (Vauxhall) and Waterside (Fulham). Waterfront (Battersea) due to open before Christmas • £2.1M invested in major refurbishments on existing sites targeting broader c
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Slide 20: Tenancies
Tenancies • Major changes to tenanted estate – 6 pubs transferred from managed to tenanted – 2 pubs transferred from tenanted to managed – 6 tenanted pubs acquired and 2 sold • Commenced four year refurbishment – To raise the standard of the tenanted estate – £0.5 million invested on 5 tenanted pubs
Slide 21: Estate profile
Estate profile 1 April 30 Sept Transfers 06 + - 06 (net) Managed 112 8 - (4) 116 Tenanted 96 6 (2) 4 105* Total 208 14 (2) - 221* Freehold 164 14 - - 178** * A new tenanted outlet has been created out of an existing pub ** In addition to the 178 freeholds the Company has 10 leases with in excess of
Slide 22: 3. Wells & Young's Brewing Company
3. Wells & Young’s Brewing Company 22
Slide 23: A new force in UK brewing
A new force in UK brewing The Wells & Young’s Brewing Company • Freehold site and modern brewery in Bedford – Eagle Brewery • Strong portfolio of growing beer brands – Young’s Bitter, Wells Bombardier, Young’s Special, Eagle IPA, Waggledance, Kestrel + range of bottle conditioned speciality beers •
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Slide 25: Integration progress
Integration progress • Transfer of sales & marketing teams • Successful beer matching • Portfolio review & customer presentations • Commenced decommissioning of Ram Brewery site • Identification of alternative distribution centre in Croydon • Relocation and installation of specialist brewing equipme
Slide 26: Financial impact on Young's
Financial impact on Young’s • Annualised net profit increase of £2.5M from 1 October • 40% share of any profit improvement of Wells & Young’s – Synergy savings – Scale benefits – Other integration benefits • Cash impacts – £10M cash investment in Wells & Young’s – One-off costs of £8M (including exp
Slide 27: Ongoing relationship
Ongoing relationship • A highly focused drinks business run at arm’s length from its two shareholders • Rolling beer supply agreement • Board representation and shareholder protection rights • Dividend policy – 80% of profits, post pension contributions 27
Slide 28: 4. Strategy & outlook
/ 4. Strategy & outlook | [YOUNGS]
Slide 29: Active operational management
Active operational management • Focused quality retail pub business – 219 pubs in London and Southern England • Premium strategy to provide clear point of differentiation… – Premium end of the market - style, quality and individuality of a Young’s pub – Measure against best individual pub and restau
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Slide 31: Active estate management
Active estate management Organic growth augmented by: • Benefits from recent investments and developments • Ongoing investment in existing estate on high returning projects • Transfers from tenancies to leased • Acquisitions: − Individual pubs or packages that maintain the quality of Young’s estate
Slide 32: Outlook
Outlook • Strong current trading – Sales up 21.9% in 6 weeks to 11 November 2006 – LFL sales up 10.6% on an invested basis • Second half will benefit from – New supply agreement – Improved contribution from JV – Recent investments in the estate • Wells & Young’s commenced trading on 1/10/06 – Positi
Slide 33: Facing the future with considerable confidence
Facing the future with considerable confidence 33
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