Thu 20th Nov 2014 - Young’s reports LfLs sales accelerate to 8.8% Young’s reports LfLs sales accelerate to 8.8%: London retailer Young’s has reported that like-for-like sales rose 6.9% in its First Half, the 26 weeks to 29 September – and 8.8% in the first seven weeks of its Second Half. The company also reported a return to growth in its tenanted division. Managed house sales were up 7.5% to £110m, with same outlet like-for-like sales up 7.0%, and managed house operating profit up 7.9%. It reported continued positive momentum in hotels, with a further 63 rooms added, accommodation revenue up 19.7% and RevPAR up 9.3% from £55.22 to £60.37. The tenanted estate, recently re-launched as the Ram Pub Company, returned to growth with total revenue up by 12.3% and by 4.6% on a like-for-like basis. There was further expansion of the managed estate through selective acquisitions - two new managed houses and two sites in partnership with Berkeley Homes acquired during the first half, and four further managed houses added since period end. Net debt increased to £116.6 million owing to investment in both the existing estate and new acquisitions, but continued to fall as a multiple of the last twelve months’ Ebitda (2.36 times). Young’s reported encouraging trading since the period end, with managed house revenue in the first seven weeks up 10.3% in total, up 8.8% on a like-for-like basis, and further impetus to come from newly acquired sites. Chief executive Stephen Goodyear said: “We are delighted to report another period of very strong trading, with further impressive sales growth from our managed estate and a return to growth in our tenanted division. Our many pubs in riverside locations and with attractive beer gardens have clearly benefited from the long, warm summer. Fundamentally however, our continued like-for-like growth comes from having high quality, well-invested pubs and hotels in a range of great locations, with a premium food and drink offering delivered by talented and motivated teams across both Young’s and Geronimo. We acquired two pubs and two development sites during the half, and a further four pubs since the period end. With our strong balance sheet, we continue to pursue opportunities to acquire both pubs and hotels that fit our premium profile. After the extended summer, trading has continued very positively into the autumn, and further impetus in the current year will come from the newly acquired pubs as well as from the re-opening of some of those currently undergoing redevelopment. We are confident that the strength of our existing estate, coupled with our appetite to grow further through acquisition, will continue to serve us well for the remainder of the year and beyond.” Profit before tax was £18.8m, up by 26.2% from £14.9m for the comparable period. The company has 245 pubs, more than 200 of which are either freehold or on long leases with peppercorn rents. Of the vote in the House of Commons this week to introduce market rents, the company stated: “We note the House of Commons vote earlier this week which seeks to alter the relationships some pub companies have with their tenants, in particular giving them the right to operate outside of the tie. With 245 pubs (managed and tenanted combined) we are well below the 500 pub level at which the intended legislation is targeted. Our tenanted operation delivered just 5.5% of the group’s revenue in the half year.” Of investments in the estate in the First Half, it said: “The first six months saw the successful completion of the next stage of our hotel expansion plans. 63 new rooms were added through a combination of converting existing space into rooms, acquisitions and a transfer between our tenanted and managed operations. We now have a new 17-room hotel at the Dog & Fox (Wimbledon Village), a new 13-room hotel at the Orange Tree (Richmond) and an additional 13 rooms at the Windmill (Clapham Common). In addition, we acquired the iconic Fox & Anchor, a boutique six-room hotel in the heart of the City, and the Lamb Inn (Hindon), a 19-room hotel in the West Wiltshire Downs, was transferred from our tenanted to our managed division. Our hotel rooms - 463 in total - are of a very high quality and compare favourably with some of the best boutique hotel rooms in London. Our investment in hotels helped lift our accommodation revenue by 19.7% in the period. Occupancy rates were up 2.4% points and we achieved a step change in RevPAR (revenue per available room), with an impressive increase of £5.15, or 9.3%, to £60.37. The major pub investments in the period were at the Betjeman Arms (St Pancras), Britannia (Kensington), Crooked Billet (Wimbledon), Finch’s (formerly the Master Gunner, Finsbury Square), Halfway House (Earlsfield), Porchester (Paddington), Richard 1st (Greenwich) and the Seven Stars (Brighton). In September we acquired the White Bear, just a two minute walk from Kennington Underground Station. The Castle (Tooting), complete with orangery and “mini castles” in its spectacular garden, has been the stand-out performer from last year’s refurbishments. Since this transformational development completed in April the pub’s average weekly sales have reached £59,100.”