Young & Co.'s Brewery Plc - COVID-19 Update
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Young & Co.'s Brewery, P.L.C.
Young's, the operator of differentiated, premium pubs in London and Southern England, provides an update following the latest Government announcement, and the rapidly changing developments surrounding COVID-19.
During these uncertain times our focus is on protecting our staff and customers and supporting our tenants.
It is too early at this stage to quantify the impact on earnings for the remainder of the current financial year without knowing how long our pubs will be affected. We do expect closure of some or all of our pubs, at some time, but hopefully only for a short period. Closure will inevitably impact earnings, but to some extent this would be mitigated by welcome Government relief on Business Rates.
Our intention at the moment is to continue to trade our pubs, as we feel they offer local communities a place of sanctuary in these uncertain and worrying times. We have introduced very clear guidelines on 'social-distancing' and are upholding the strictest health and hygiene measures to protect our customers and our teams.
Currently, we are doing everything we can to limit the impact on our amazing teams out in our pubs and to protect pay for all. As for our tenants, we will be informing them that there will be a 'property' rent holiday for a period of three months, starting this week.
From a financial perspective, we are taking appropriate measures to help reduce cost, optimise working capital and protect our financial position.
We have a very strong balance sheet supported by a predominantly freehold estate. We also have one of the lowest gearing ratios in the industry at 25.7% (as reported at our Interim Results in November 2019) and significant financial headroom within our existing banking facilities1.
Patrick Dardis, Chief Executive of Young's, commented further:
"These are challenging and uncertain times and we must all come together to do the right thing during the peak period of Covid-19. We have a resilient business underpinned by great people who we will support through this crisis. However, let's be in no doubt that with pub closures imminent, albeit hopefully for only a short period, all businesses in our sector will be severely impacted. We must remember, as painful as this will be, that it will be temporary, and we look forward to welcoming all our customers back to our great pubs once we are through this. We remain confident in our strategy for the business."
1 The company has committed facilities (from its banks and private placement lenders) totalling £235 million. The company's net debt to EBITDA covenant is set at 5x.