Young & Co.'s Brewery, P.L.C. Class A · LSE:YNGA
Young & Co.'s Brewery, P.L.C. Class A — H1 2010 Earnings Presentation
33 slides from Young & Co.'s Brewery, P.L.C. Class A's earnings presentation, November 2009
Slide 1: Interim results for the 26 weeks ended 26 September 2009
for the 26 weeks ended 26 September 2009
Slide 2: Agenda
Agenda 1. This is Young’s Young s 2. Financial Review 3. Operations Review 4. H2 Priorities and Outlook 2
Slide 3: 1. This is Young's
Slide 4: This is Young's
This is Young’s • One of Britain’s most established pub companiesi withith an estate t t off 221 pubs, b principally located in London and the South Home Counties - 32 West Country East City - 9 (inc Oxford) - 24 – Managed 106 outlets Thames-side - Central London 14 - 18 – Hotels 16 outlets with 351
Slide 5: Robust Results in Testing Market
Robust Results in Testing Market • Cash generative business model with robust balance sheet • Remained committed to the integrity of our brand with liquor and food margins ahead of last year +3.7% +2.2% +2.0% +1.5% -1.6% 1 6% Operating Revenue PBT* EPS* Dividend profit* £67.2m £12.0m £12.3m 17.79p 6
Slide 6: Our Strategy
Our Strategy Delighting our customers with stylish t li h pubs b anddhhotels t l Premium offer • Service standards • Drinks • Food Premium location • Exploiting the location • Ambience/environment 6
Slide 7: Our Investment Proposition
Our Investment Proposition • Well managed growth story • Consistent shareholder returns • Cash generative business model • Strong balance sheet, having avoided the high levels of gearing that have blighted the sector • Well positioned in the marketplace both geographically and demographically • Clea
Slide 8: Value through Asset Backed Dividend Growth
Value through Asset Backed Dividend Growth 20 18 16 14 12 ce Penc 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Dividend EPS 8
Slide 9: 2. Financial Review
Slide 10: Financial Overview
Financial Overview • Adjusted profit before tax up 3.7% at £12.3 million • Profit before tax up 22.0% at £11.5 million • Cash g generative business model with robust balance sheet • Net debt at £64.9 million and gearing at 39.3% • Resilient performance in managed houses; comparatively strong in tena
Slide 11: Group Results
Group Results Sept 2009 Sept 2008 March 2009 £m £m £m Managed houses 14.85 14.75 25.94 Tenanted houses 2.82 2.95 5.82 Corporate services (5.67) (5.51) (11.21) Wells & Young’s Young s 1 79 1.79 1 37 1.37 1 89 1.89 Finance costs (net) (1.45) (1.66) (3.28) Adjusted profit before tax 12.34 11.90 19.16 1
Slide 12: Adjusted Profits on Continuing Operations
Adjusted Profits on Continuing Operations 2009 2008 £m £m Profit before tax (including Wells & Young’s) 11.5 9.4 Add back Wells & Young’s g tax included in above 0.6 1.7 Operating exceptional items - 0.5 Wells & Young’s Young s exceptional items and tax 02 0.2 03 0.3 Adjusted profit before tax 12.3
Slide 13: Strong Cash Flow and Continued Investment
Strong Cash Flow and Continued Investment Sept 2009 Sept 2008 March 2009 £m £m £m Cash generated from operations 12.0 12.6 26.4 VAT o on sale sa e of o brewery b e e y site s e - ((10.3) 0 3) ((10.3) 0 3) Interest, tax and dividends (6.4) (1.4) (9.0) Free cashflow 56 5.6 09 0.9 71 7.1 Share option e
Slide 14: Investment in the Pub Estate
Investment in the Pub Estate Total Spend: £5.1 million (2008: £18.2 million) By Division By Nature of Spend Acquisitions - £Nil Managed - £2.8m Investment on recent acquisitions - £0.3m Hotels - £1.4m Investment expenditure on existing estate - Tenanted - £0.9m £4.8m 14
Slide 15: Debt Structure
Debt Structure Long dated committed facilities • £50 million long term finance (March 2018 to 2023) £90 0 million £90.0 • £40 million medium term finance (March 2013) Net debt £64.9 million Gearing (no revaluation since 1997) 39.3% % of debt fixed 54% Interest cover 8.9 times Composite fixed rate on
Slide 16: Estate Profile of Trading Pubs
Estate Profile of Trading Pubs March and Sept 2009 Managed 122 Tenanted 99 Total 221 Freehold 185 The e freeholds ee o ds above abo e exclude e c ude 11 leases eases with in excess e cess of o 40 0 years yea s to o run, u , with rents that in total amount to less than £10K 16
Slide 17: Financial Summary
Financial Summary • Good performance in challenging market • Conservative financing for the long term • Cash generative business model • Robust balance sheet • Continued dividend growth 17
Slide 18: 3. Operations Review
EST. [YOUNGS)
Slide 19: Operational Highlights
Operational Highlights Managed houses – 88.8% of total revenue • Resilient performance in a challenging market k t • Revenues up 1.7% • Liquor up 2.3% • Food up 3.1% • Not chased sales through discounting • LFL Liquor Li margin i flat fl t with ith LFL ffood d margin i 3.6% points ahead • 250,000+ d
Slide 20: Operational Highlights (continued)
Operational Highlights (continued) Tenanted houses – 10.9% of total revenue • Comparatively strong tenanted performance • LFL volume and revenue growth • Overall volume down 1.8% and revenue down 0 5% 0.5% • Operating profit down 4.6% at £2.8 million • Invested £0.9 million breathing new life into a
Slide 21: Our Customers
Our Customers Who drinks in a Young’s pub? • Discerning pub customer (ambience/service/choice) • 60% male/40% female • 30+ age group Who eats in a Young’s pub? • Regular restaurant customer looking for an informal setting • Quality Q li consciousi consumer llooking ki ffor ffreshly hl preparedd ffoo
Slide 22: Managed House Revenue Mix
Managed House Revenue Mix 100% 6.16% 5.62% 4.87% 90% 24.49% 25.45% 25.80% 80% 70% 60% 50% 40% 69.35% 68.93% 69.33% 30% 20% 10% 0% 2007 2008 2009 Li Liquor F d Food R Rooms and d other h 22
Slide 23: Liquor and Food - Key Initiatives
Liquor and Food - Key Initiatives Liquor • Diverse range of cask ales complemented by leading lager brands • Ongoing commitment to product quality through training courses • M t resilient Most ili t componentt off revenue Food • Sa es more Sales oea affected ected by the t e downturn do tu as compet
Slide 24: Like-for-like Food Margin
Like-for-like Food Margin 7.00% 6.00% 5 00% 5.00% 4.00% 3.00% 2 00% 2.00% 1.00% 0.00% 2007 2008 2009 Cumulative Percentage Point Growth 24
Slide 25: Accommodation – Key Initiatives
Accommodation – Key Initiatives • Revenues adversely affected by economic slowdown, down 13.3% • REVPAR down 13.3% at £38.45 • Thi d off 351 hotel Third h t l rooms upgraded d d • Investing in hotel brand, a discrete but complementary component of our retail proposition • Direct marketing campaign t
Slide 26: Tenanted Houses – Key Initiatives
Tenanted Houses – Key Initiatives • Emphasis on recruitment with new tenants stimulating this part of our business • Comprehensive support package available including 17 core training courses • Market leading portfolio of ales and lagers supplied by Wells & Young’s complemented by a guest ale range
Slide 27: Like-for-like Sales
Like-for-like Sales Number Sales Change of sites £m % Same outlet Managed 108 55 5 55.5 (0 7) (0.7) Tenanted 98 7.1 2.5 206 62.6 (0.3) Un-invested Managed 98 49.4 (2.2) Tenanted 87 61 6.1 08 0.8 185 55.5 (1.9) 27
Slide 28: Operating Performance at Pub Level
Operating Performance at Pub Level 2009 Change Revenue £m % Managed 59 8 59.8 17 1.7 Tenanted 7.3 (0.5) 67.1 1.4 EBITDAR* £m % Managed 19.0 1.1 T Tenanted t d 37 3.7 (3 1) (3.1) 22.7 0.4 * At outlet level, before interest, depreciation, rents payable 28
Slide 29: Key Performance Indicators of Same Outlet Pubs
Key Performance Indicators of Same Outlet Pubs Managed g Average weekly revenue £19,800 (0.7%) Food mix 25.4% No change Average EBITDAR £167,800 (2.1%) Tenanted Average EBITDAR £36,500 (0.9%) 29
Slide 30: Wells & Young's
Wells & Young’s • Brewing partnership with Charles Wells, Bedford • Revenue up 1.0% 1 0% and operating profits up 3 3.7% 7% with efficiency gains in all areas of the business • 40% share contributed £1.8 million to adjusted profit before tax • Comparatively p y strong g performance p as own and lice
Slide 31: 4. H2 Priorities and Outlook
EST. [YOUNGS)
Slide 32: H2 Priorities and Outlook
H2 Priorities and Outlook • Trading conditions likely to remain challenging • Encouraging revenue performance in first seven weeks; managed houses up 0.8%, 0.9% LFL • Driving value from existing estate • Continued investment • Initiatives to deliver profitable revenue growth • Alert to value enhanci
Slide 33: Questions
Questions 33
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