Young & Co.'s Brewery, P.L.C. Class A · LSE:YNGA
Young & Co.'s Brewery, P.L.C. Class A — H1 2007/08 Earnings Presentation
25 slides from Young & Co.'s Brewery, P.L.C. Class A's earnings presentation, November 2007
Slide 1: Results Presentation for the 26 weeks ended 29 September 2007
Results Presentation for the 26 weeks ended 29 September 2007 1
Slide 2: Agenda
Agenda 1. Results review 2. Retail operations 3. Wells & Young's Brewing Company 4. Strategy & outlook 2
Slide 3: Significant events and highlights
Significant events and highlights • Strong first half performance – incorporating benefits from last year’s substantial changes to the business – focus now on operational improvements – revenue up 11.9% on continuing activities and profits before exceptional items are up 89.2% – free cash flow £13.2
Slide 4: 1. Results Review
E [YOUNGS] 1. Results Review
Slide 5: Strong underlying results from continuing operations
Strong underlying results from continuing operations +105.8% +89.2% +72.1% +33.3% +11.9% Revenue Op Profit* PBET* EPS* Dividend £63.9m £12.1m £10.9m 69.47p 24.00p * - Before exceptional items, premium on redemption of debenture and discount of site proceeds 5
Slide 6: Adjusted profits from continuing operations
Adjusted profits from continuing operations 2007 2006 £M £M Reported PBT 4.3 0.4 Operating exceptional items - 1.3 Non-operating exceptional items 0.3 0.2 Associate exceptional items 0.9 - Premium on redemption of debenture 6.8 - Discount of site proceeds (1.5) 3.9 Share of associate’s tax expense 0
Slide 7: Operating growth driving net debt reduction
Operating growth driving net debt reduction 2007/08 2006/07 £M £M Cash inflow from operating activities* 16.4 11.5 Working capital movements 2.1 (2.0) Interest, tax and dividends (5.3) (5.3) Free cash flow 13.2 4.2 Capital expenditure/acquisitions (8.4) (37.8) Investment in associate - (10.0) Part p
Slide 8: Estate development
Estate development • £8.4M invested in the estate in first half – Acquired 1 managed pub - Rose and Crown, Farnborough – £4.3M invested in managed house refurbishments on existing sites – £0.6M invested in tenanted refurbishments, with further investment underway • Strong returns from prior year inv
Slide 9: Investment in the pub estate
Investment in the pub estate Total spend: £8.4M (2006: £37.4M) By division By nature of spend 9
Slide 10: Estate profile
Estate profile Transfers 1 April 07 + - 29 Sept 07 (net) Managed 114 1 - (3) 112 Tenanted 102 - (1) 3 104 Total 216 1 (1) - 216 Freehold 177* 1 - - 178* *Freehold includes the Brewery Tap, which is closed, but excludes 10 leases with in excess of 45 years to run, with rents that in total amount to £
Slide 11: Capital structure
Capital structure 2007 2006 Net debt £94.5M £102.6M Minerva receivable £58.7M £69.0M Gearing 53.3% 62.2% % of debt fixed 79.4% 38.3% Composite fixed rate 6.6% 7.4% Interest cover 3.9 3.2 11
Slide 12: Financial summary
Financial summary • Restructuring business complete • Further investment in estate of £8.4m • Strong balance sheet – Remaining proceeds (£58.7M) from sale of brewery site due in January – 9.5% debenture redeemed in May to improve flexibility of our financing structure – Net debt before Minerva recei
Slide 13: 2. Retail Operations
E [YOUNGS] 2. Retail Operations
Slide 14: Retail Highlights
Retail Highlights Retail success from delighting customers with high service standards, quality food, market leading drinks and stylish pubs • Strong revenue (13.6%) and profit (33.0%) growth • Only one pub acquired, but investment continues in existing pubs and particularly hotels • Last year’s dev
Slide 15: Operating performance at outlet level
Operating performance at outlet level 2007 2006 Change Revenue £000’s £000’s % Managed 56,001 49,317 +13.6 Tenanted 7,402 7,283 +1.6 63,403 56,600 +12.0 EBITDAR* £000’s £000’s % Managed 18,381 14,444 +27.3 Tenanted 3,843 3,085 +24.6 22,224 17,529 +26.8 * At outlet level, before interest, depreciatio
Slide 16: Like-for-like sales
Like-for-like sales Number of Revenue sites £M change % Same Outlet Managed 99 48.6 + 5.7 Tenanted 88 6.4 + 0.8 187 55.0 + 5.2 Uninvested Managed 81 37.8 + 1.9 Tenanted 78 5.5 + 0.5 159 43.3 + 1.7 16
Slide 17: Continued investment in managed houses
Continued investment in managed houses • Success of our recent redevelopments continues to support our premium strategy • Estate development: – One pub acquired for £3.5m (Rose and Crown, Farnborough) – £4.3m invested in managed house developments with major projects • Brewers Inn, Wandsworth • Broo
Slide 18: Delighting existing customers and attracting new ones
Delighting existing customers and attracting new ones • Targeted customer marketing activity: – Websites now in 56 pubs with 800K+ unique hits in the period, year on year growth of 185% – Profile of our estate and redevelopments has been raised significantly through consumer PR in both national and
Slide 19: Strong tenanted house performance
Strong tenanted house performance Operating highlights: • Strong operating profit (35.9%) growth • Estate refurbishment continues to raise the standards of the tenanted estate – £0.6 million invested in H1 – Major works underway (Red Cow in Richmond, Thatched House in Hammersmith, Black Lion in Surb
Slide 20: Smoking Ban – England and Wales
Smoking Ban – England and Wales Short term issue - longer term opportunity • Good compliance across the estate • Customer feedback largely positive • Trading impact hard to determine at this stage: – Poor summer weather – Wider impact of redevelopments – Significant investment in outside areas • Win
Slide 21: 3. Wells & Young's Brewing Company
3. Wells & Young’s Brewing Company 21
Slide 22: Integration complete
Integration complete • Now completed its first full year, a transitional one, which has included – challenge of integrating the Wells, Young’s and Courage beers into one customer focused portfolio – combining two workforces – agreement to outsource Wandsworth distribution to KN Drinks Logistics • Re
Slide 23: 4. Strategy & outlook
E [YOUNGS] 4. Strategy & outlook
Slide 24: Strategy is Delivering
Strategy is Delivering • Widening differentiation of Young’s pubs continues • Good like for like sales growth in challenging market • Positive benefits from: – recent redevelopments – improved beer supply terms – other productivity and purchasing gains • Strong growth in food offsetting impact from
Slide 25: Outlook
Outlook • Step change in first half financial performance, despite disappointing summer weather and smoking ban • Second half comparatives have already benefited from the gains from last summer’s structural changes • The second half also has a number of uncertainties. – Smoking ban impact over the c
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