Our trading buy on Young & Co's (YNGA) shares (649p, 20 September 2012), which was based on the fact that they normally rally strongly ahead of results, has paid off. The shares rose by a further 2 per cent on the back of these impressive first-half numbers.
The strong late summer London-pub data that contributed to our call on the shares was very evident in the figures. Following an uninspiring first quarter, hit by poor weather, the second quarter went great guns helped by the Olympics and Paralympics. Overall, underlying operating profit rose 8.5 per cent, with underlying EPS having jumped 18.2 per cent.
Like-for-like revenue from own-managed pubs grew 5.7 per cent and the strong performance continued with 6 per cent growth in the first seven weeks of the second half. Revenue per available room at Young’s 380 hotel rooms ticked-up 2.6 per cent, too. Meanwhile, tenanted-pub revenues fell 14 per cent as Young continued to reduce the size the estate, now at 81 pubs, to focus on first rate properties.
Broker Peel Hunt forecasts full-year pre-tax profit of £23.1m, giving EPS of 36.1p (2012: £21.2m/33.4p).
| Young & Co's Brewery (YNGA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 720p | MARKET VALUE: | £318m* | |
| TOUCH: | 695-730p | 12-MONTH HIGH: | 720p | LOW: 555p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 677p* | NET DEBT: | 36% | |
| Half-year to 1 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 90.5 | -16.1 | -30.1 | 6.68 |
| 2012 | 100 | 14.0 | 24.1 | 7.02 |
| % change | +10 | - | - | +5 |
Ex-div:28 Nov Payment:14 Dec *Reflects both 'A' and non-voting shares | ||||
