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Young's swings to loss in first half, remains positive on December trading
12th Nov 2020 10:13
(Sharecast News) - Brewer and pub operator Young's reported total first-half revenue of £55.1m on Thursday, down from £168.2m year-on-year, with an adjusted EBITDA of £2.9m, falling from £47.2m.
The AIM-traded firm said managed house EBITDA for the period was £8m.
It said a "lengthy period of closure" had a significant impact on its results, as it swung to an adjusted operating loss of £14.3m for the 26 weeks ended 28 September, fro, a profit of £30.9m a year earlier.
The company's adjusted loss before tax was £19.2m, compared to a profit of £26.6m at the same time last year.
Young's said total revenue for the 10 weeks since reopening on 20 July was "encouragingly" 84% of the prior year, as its adjusted operating profit for August and September coming in at £5.9m, with an operating margin of 12.1% and positive cash flow.
Like-for-like sales for the 10 weeks of trading was 81%.
The firm said the placing of new shares in June raised net proceeds of £84.8m, which allowed it to strengthen its balance sheet and begin its 18-month investment programme, with five pubs completed and the company back on site at a further two pubs.
Net debt improved by £76.6m to £203.8 million since the year-end, and with bank headroom of £159.8m, the board said Young's had liquidity in place to weather further restrictions, including the current four-week lockdown in England.
The company had announced in May that, in view of the ongoing closure of the company's pubs, the expected lower levels of trade when they reopened and the terms of the new £20m revolving credit facility with NatWest, it would not be paying an interim dividend.
Despite the introduction of curfew restrictions and London's tier-2 status, since the period ended, the trading of Young's managed house division was described as "encouraging", at 73% of last year until all of its pubs closed on 5 November.
"Our business recently celebrated 189 years and the last six months has been one of the toughest periods in that incredible journey," said chief executive officer Patrick Dardis.
"The cautious approach we adopted and the safe environment we provided were key reasons why our customers flocked back in large numbers.
"As a business we benefited from the Government's 'Eat Out to Help Out' campaign throughout August, which boosted midweek footfall with diners attracted by the headline 50% discount."
Dardis said the firm also made use of the government's "much-welcomed" furlough scheme, enabling it to protect the jobs of almost 5,000 employees.
"Despite the challenges presented to us, our rural pubs and hotels, particularly those in the south west and in coastal regions, have delivered like-for-like growth against last year benefitting from the staycations and weekend visitors.
"These tougher times have also demonstrated our strength in controlling our cost base in a very efficient manner."
Dardis added that, while the company was hoping that a further lockdown could have been avoided, the second lockdown with the financial support available from the government would be "considerably less damaging" to its business than the potential move to tier-3 in the areas in which it operates.
"We remain positive at the prospect of trading in December."
At 1013 GMT, shares in Young & Co's Brewery were down 3.33% at 1,005.4p.
The AIM-traded firm said managed house EBITDA for the period was £8m.
It said a "lengthy period of closure" had a significant impact on its results, as it swung to an adjusted operating loss of £14.3m for the 26 weeks ended 28 September, fro, a profit of £30.9m a year earlier.
The company's adjusted loss before tax was £19.2m, compared to a profit of £26.6m at the same time last year.
Young's said total revenue for the 10 weeks since reopening on 20 July was "encouragingly" 84% of the prior year, as its adjusted operating profit for August and September coming in at £5.9m, with an operating margin of 12.1% and positive cash flow.
Like-for-like sales for the 10 weeks of trading was 81%.
The firm said the placing of new shares in June raised net proceeds of £84.8m, which allowed it to strengthen its balance sheet and begin its 18-month investment programme, with five pubs completed and the company back on site at a further two pubs.
Net debt improved by £76.6m to £203.8 million since the year-end, and with bank headroom of £159.8m, the board said Young's had liquidity in place to weather further restrictions, including the current four-week lockdown in England.
The company had announced in May that, in view of the ongoing closure of the company's pubs, the expected lower levels of trade when they reopened and the terms of the new £20m revolving credit facility with NatWest, it would not be paying an interim dividend.
Despite the introduction of curfew restrictions and London's tier-2 status, since the period ended, the trading of Young's managed house division was described as "encouraging", at 73% of last year until all of its pubs closed on 5 November.
"Our business recently celebrated 189 years and the last six months has been one of the toughest periods in that incredible journey," said chief executive officer Patrick Dardis.
"The cautious approach we adopted and the safe environment we provided were key reasons why our customers flocked back in large numbers.
"As a business we benefited from the Government's 'Eat Out to Help Out' campaign throughout August, which boosted midweek footfall with diners attracted by the headline 50% discount."
Dardis said the firm also made use of the government's "much-welcomed" furlough scheme, enabling it to protect the jobs of almost 5,000 employees.
"Despite the challenges presented to us, our rural pubs and hotels, particularly those in the south west and in coastal regions, have delivered like-for-like growth against last year benefitting from the staycations and weekend visitors.
"These tougher times have also demonstrated our strength in controlling our cost base in a very efficient manner."
Dardis added that, while the company was hoping that a further lockdown could have been avoided, the second lockdown with the financial support available from the government would be "considerably less damaging" to its business than the potential move to tier-3 in the areas in which it operates.
"We remain positive at the prospect of trading in December."
At 1013 GMT, shares in Young & Co's Brewery were down 3.33% at 1,005.4p.