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Young's brews up profits

RESULTS: Young's operational performance was immaculate in the first half, but the share price is starting to reflect this

The general upturn in the pub market since the start of the year was amply demonstrated by these decent half-year figures from Young & Co's Brewery (YNGA). The London-focused pub company was well-placed to benefit from both demand from the capital's well-healed commuters and rising asset prices in the south east. Accordingly, like-for-like sales grew 5.6 per cent, despite the tougher comparisons generated from last year's Olympic Games.

IC TIP: Hold at 1,010p

The key to that performance was the managed estate, which comprises 128 properties - including hotels, Young's pubs and branded Geronimo pubs - out of the company's 240-strong estate. Like-for-like revenues there grew 6 per cent to £102m and translated into a 13.4 per cent rise in underlying operating profit, to £25.3m. Expansion played only a modest role, with just four freehold properties added to the estate during the period and improvements came through on the back off investment. That reached £17.7m during the half, including the cost of the four freehold properties, and management expects to spend up to 7 per cent of annual sales on maintaining its existing pubs.

Broker Panmure Gordon upgraded its forecasts by around 4 per cent and now expects pre-tax profit for 2014 of £25.8m, giving EPS of 41.6p (from £24.1m and 37.8p in 2013).

YOUNG & CO'S BREWERY (YNGA)

ORD PRICE:1,010pMARKET VALUE:£430m*
TOUCH:1,010-1,050p12-MONTH HIGH:1,110pLOW: 690p
DIVIDEND YIELD:1.5%PE RATIO:26
NET ASSET VALUE:734p*NET DEBT:32%

Half-year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201210013.623.37.02
201310814.927.97.45
% change+8+10+20+6

Ex-div: 27 Nov

Payment: 13 Dec

*Reflects both 'A' and non-voting shares