Join our community of smart investors

The drinks are on Young's

The brewer and pub manager had a strong year, with adjusted pre-tax profit up 18 per cent
May 21, 2015

For all the shifts and rifts in the landscape of the pub sector, Young & Co's Brewery (YNGA) is charting a steady course. Full-year financial results exceeded analyst expectations, bolstered by the addition of eight pubs as well as a 5.6 per cent increase in like-for-like drink sales.

IC TIP: Hold at 1075p

Young's key asset is the concentration of its estate in London and the home counties, where consumer sentiment has been resilient and sales growth has outstripped other regions'. The fact that seven of last year’s new pubs are located in London underlines Young's ongoing faith in the drinking habits of the capital, though the purchase in January of The Bell at Stow-on-the-Wold in Gloucestershire is evidence the company is also prepared to spread its wings beyond the M25.

A £48.5m investment in its managed estate, including £10.8m in hotels and bedrooms, pushed net debt up by 15 per cent. But the company believes its net borrowings - at 2.5 times cash profits - remain conservative. Chief executive Stephen Goodyear says the company has started this financial year "with a degree of confidence", with managed-house revenues already up 8.1 per cent.

Analysts at Panmure Gordon are forecasting adjusted pre-tax profit of £33.4m and earnings per share of 53.3p for 2015-16 (from £32m and 50.6p last year).

YOUNG & CO'S BREWERY (YNGA)

ORD PRICE:1,075pMARKET VALUE:£469m
TOUCH:1,050-1,100p12-MONTH HIGH:1,100pLOW: 960p
DIVIDEND YIELD:1.5%PE RATIO:19
NET ASSET VALUE:839pNET DEBT:32%

Year to 30 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201114318.128.413.26
2012179-7.5-11.113.93
2013 (restated)19421.433.814.63
201421126.645.815.52
201522736.155.216.46
% change+8+36+21+6

Ex-div: 11 Jun

Payment: 9 Jul