Young & Co.'s Brewery, P.L.C.
(“Young's” or the “Company”)
Disposal of 56 tenancies for £53M
Young’s, the operator of premium, individual and differentiated pubs, announces the agreement to sell most of its tenanted estate, the Ram Pub Company (the “Disposal”).
Details of the Disposal
Young’s has agreed to sell 56 of the 63 pubs in the Ram Pub Company to Punch Pubs & Co. for a total consideration of £53M in cash, having generated EBITDA of £4.7M for the year ended 31 March 2019. Young’s will retain the remaining seven pubs for the long term.
Background to the Disposal
As part of its strategy to create long-term sustainable shareholder value, Young’s regularly reviews its capital allocation priorities. Following the review, the Board decided that the best way to increase value for shareholders was to withdraw from the tenanted model and focus solely on operating premium, individual, differentiated and predominantly freehold managed pubs and hotels.
Benefits of the Disposal
The Disposal is consistent with Young’s strategy to target growth through investment in higher turnover managed pub and hotels.
The following benefits will accrue to Young’s from the Disposal:
- Net proceeds from the sale will be used to strengthen the Company’s balance sheet and provide additional capacity for investment in its managed estate
- Young’s will look to acquire predominantly freehold managed pubs
- By focussing on its managed house estate, head office costs will reduce.
Completion
Completion of the Disposal is expected to occur 9 August 2021.
Patrick Dardis, Chief executive of Young’s, said:
“Young’s sole focus will now be on operating well-invested and premium managed pubs and hotels. We have a proven history of making attractive returns from investing in high-quality pubs and this disposal will provide us with additional firepower to upgrade our existing pubs and capitalise on attractive acquisition opportunities that may come to the market.
“During lockdown, we invested a total of £17M in improving the pubs in our managed estate and the purchase of two new pubs: Enderby House in Greenwich and Alban’s Well in St Albans.
“We are delighted to be welcoming back our customers and are already seeing encouraging trading, despite some restrictions remaining. The Board is confident Young’s will emerge from the pandemic in a stronger position and is excited about the future of the business.”