Young & Co hopes to brew a profit
As the World Cup fever takes over the UK, Young & Co's Brewery is raising a glass to the profit growth expected from the massive increase in punters watching the matches.
The company, which is releasing its annual results today, will be breathing a sigh of relief at the increase in custom after difficult trading conditions last year.
And for World Cup fans brave enough to get up for the morning matches, 45 pubs are opening early across London and the South East and will be serving Football-shaped bacon sandwiches.
Young’s was particularly exposed to the disasters which dampened the UK economy in 2001. As the countryside shut down, Young’s regional pubs – mostly near rivers and in areas popular with tourists – were hit by foot-and-mouth disease last summer.
And the terrorist attacks made matters worse as 11 September caused a dramatic drop in tourism in London. Young’s Inns, like most other hotels in the capital, saw fewer visitors. The economic downturn later in the year also affected business as job losses in the City meant reduced business in the pubs and inns.
But despite these difficulties, the company came out of the first half of the year better than last year, with turnover at £53.89m up by 10.5% and profits up by 11%.
Finance director Peter Whitehead will be monitoring the performance of the company’s acquisitions, which include City Gate in Exeter and four other pubs in the group. He will look at other investments made by the company, such as the integration of Smiles’ West Country pubs, some of which were run down.
The company also adopted the new FRS 19, a deferred standard that becomes effective for year ending on or after 23 January 2002. The chairman said: ‘Young’s takes a conservative approach to its tax accounting with the consequence that the effect of this standard has been much smaller on Young’s than on some of its competitors. The only impact, by way of a prior year adjustment, is a £600,000 reduction in net assets which results in minor changes in net assets per share and gearing.’
And at an egm in February the company adopted FRS 17, which applied to one of the smaller pension funds for former employees. The fund had been invested in Young’s ‘B’ shares which became ‘A’ shares and were sold in the stock market after the company put money into them to comply with the rules.
The results will come the week after South African Breweries acquired rival Miller Brewing from Philip Morris, changing the landscape in the sector.