Pubs aren’t usually associated with sound long-term planning, but premium operator Young & Co (YNGA) is determined to buck that reputation. Before increasing its dividend for the twenty-second year in a row, the pubco committed £67.1m to investments in the 12 months to 1 April, just shy of a record period for operating cash flow.
In a highly-competitive market, the temptation could be to cut costs wherever possible. But true to form, Young’s is refurbishing its estate and expanding its foothold in choice postcodes. With its focus on the relatively young city of London, the group knows it must maintain its appeal with an increasingly abstinent demographic which nonetheless appreciates an Instagrammable setting. The short-term sacrifice has been a dip in the operating margin from 16.8 to 16 per cent.
A long-term view should also serve as an answer to trading over the next two months, which will inevitably be judged against a balmy summer and the England football team’s extended World Cup run. In his outlook, chief executive Patrick Dardis fell short of stating whether the group would match the high benchmark, pointing, instead, to the cricket and rugby world cups (England have a reasonable chance in both).
Analysts at Panmure Gordon expect adjusted pre-tax profit of £44.6m and earnings of 73.7p per share for the year to March 2020, rising to £46.1m and 76.1p in FY2021.
| YOUNG & CO (YNGA) | ||||
| ORD PRICE: | 1,890p | MARKET VALUE: | £ 926m | |
| TOUCH: | 1,835-1,890p | 12-MONTH HIGH: | 1,890p | LOW: 1,293p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 1,212p | NET DEBT: | 28% | |
| Year to 1 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 227 | 36.1 | 55.2 | 16.5 |
| 2016 | 246 | 32.8 | 54.7 | 17.5 |
| 2017 | 269 | 37.0 | 61.5 | 18.5 |
| 2018 | 279 | 37.6 | 61.6 | 19.6 |
| 2019 | 304 | 39.5 | 64.4 | 20.8 |
| % change | +9 | +5 | +4 | +6 |
| Ex-div: | 6 Jun | |||
| Payment: | 11 Jul |
