Young & Co’s shareholders will enjoy a higher dividend this year after the acquisition of City Pub Group helped to drive bumper earnings growth last year.
The pub group shrugged off ‘a tough macroeconomic environment’ for the sector as adjusted operating profits surged 24.6 per cent to £71.4milliion over the year to 31 March.
Revenues rocketed 24.9 per cent overall to £485.8million and rose 5.7 per cent on a like-for-like basis, thanks to a balance of volume growth and price increases.
Growth was achieved despite labour cost increases of around 10 per cent as a result of last year’s Autumn Budget, as well as higher utility bills.
But chief executive Simon Dodd said the pub and bar business was in ‘excellent shape’ and ‘positioned well for difficult conditions’.
Young’s board has recommended a final dividend of 11.53p, giving a total dividend for the year of 23.06p, up 6 per cent, ‘reflecting our strong profit performance and progressive dividend policy’.
Boost: Young & Co’s shareholders will enjoy a higher dividend this year
Dodd added: ‘Young’s continues to be a leader for like-for-like sales in our sector and everything within our control is going to plan.’
Like-for-like managed house revenue for the last nine weeks was ahead of last year by 8 per cent, Young’s said, ‘giving the Board confidence for the year ahead.’
The London-listed firm also said it had completed the integration of City Pub Group into the Young’s estate after the £162million deal announced in November 2023.
It said: ‘Head office synergies realised, and food and drink margin benefits achieved in line with the acquisition plan.’
Dodd added: ‘A tough macroeconomic environment for the industry seems to have been par for the course since I became CEO and Government changes coming into effect in April make life no easier.
‘However, we are in excellent shape, with our differentiated approach and premium business model positioning us well in difficult conditions.’
He added: ‘It’s been a fast start to the new financial year, with the great weather throughout April and May meaning our beautiful pub gardens and riverside locations have been packed full of customers.
‘Whilst we remain mindful of the headwinds facing consumers and the wider issues that our industry will encounter, we are confident our premium, well-invested, predominantly freehold pub estate will continue to deliver profitable growth.’
In January, Dodd warned that the cost of a pint would increase by 20p after the Budget’s increase in employer national insurance contributions.
At the time, the pub chain said it planned to raise prices by up to 3.5 per cent after Rachel Reeves’ tax raid on business. This added 20p to the cost of typical pint of beer in London – taking it to £6.50.
The group enjoyed bumper sales over Christmas and New Year.
Young’s shares fell 1.54 per cent or 10.00p to 640.00p on Thursday.
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