Final Results

RNS Number : 9162Z

Young & Co's Brewery PLC

23 May 2019

 

Young & Co.'s Brewery, P.L.C.

Preliminary results for the 52 weeks ended 1 April 2019

	2019	2018	%
	£m	£m	change
Revenue	303.7	279.3	+8.7
Adjusted operating profit(1)	48.5	46.9	+3.4
Operating profit	44.6	43.5	+2.5
Adjusted profit before tax(1)	43.4	41.0	+5.9
Profit before tax	39.5	37.6	+5.1
Net cash generated from operations	69.2	61.4	+12.7
Adjusted basic earnings per share(1)	72.13p	67.74p	+6.5
Basic earnings per share	64.36p	61.60p	+4.5
Dividend per share	20.78p	19.61p	+6.0
(interim and recommended final)
Net assets per share(2)	£12.12	£11.24	+7.8
All of the results above are from continuing operations.
(1) Reference to an "adjusted" item means that item has been adjusted to exclude exceptional items (see notes 3 and 4). (2) Net assets per share are the group's net assets divided by the shares in issue at the period end.

PERFORMANCE HIGHLIGHTS

•    Another highly successful year, despite a challenging market backdrop, with total revenue up 8.7% to £303.7 million;

•    Total managed house revenues up 9.0% to £290.3 million, underpinned by like-for-like sales growth of 5.1%; adjusted managed operating profits of £61.5 million;

•    The Ram Pub Company performed strongly with like-for-like revenues up 5.0%;

•    Total investment of £67.1 million on acquisitions, including 15 Redcomb pubs, and upgrades to our existing estate;

•    Record cash generation, with operating cash flow up 12.7% to £69.2 million - net debt to adjusted EBITDA remains conservative at 2.2 times, underpinned by our strong balance sheet, giving us opportunities to pursue our acquisition strategy;

•    Proposed 6.0% increase in final dividend to 10.81 pence, resulting in a total dividend of 20.78 pence (2018: 19.61 pence); 22nd consecutive year of dividend growth;

•    Managed house revenue in the last thirteen weeks was up 9.4% in total, and up 2.6% on a like-for-like basis, reflecting strong prior year comparatives.

Patrick Dardis, Chief Executive of Young's, commented:

"I am very pleased to announce such a strong set of results which are a testament to the quality of our incredible people who bring our premium positioned pubs to life. These results demonstrate that our strategy continues to deliver.

"The addition of the 15 Redcomb pubs complements the existing Young's managed house estate and presents tremendous opportunities for future growth. We have continued to invest in our existing estate as well as upgrading our technology, and are excited to realise this potential.  

"It has been a tough start to the year against very strong comparatives with the only good weather coming in the Easter bank holiday this year. Looking ahead, the amazing weather throughout the summer of 2018 and England's World Cup success sets a high benchmark for the coming months. However, we remain confident that we will continue our strong growth story in the coming year."

For further information, please contact:

Young & Co.'s Brewery, P.L.C.	020 8875 7000
Patrick Dardis, Chief Executive
MHP Communications	020 3128 8742
Tim Rowntree/Alistair de Kare-Silver/Robert Collett-Creedy

PRELIMINARY RESULTS FOR THE 52 WEEKS ENDED 1 april 2019

chief EXECUTIVES STATEMENT

I am delighted to announce another strong set of results, driven by our well-invested, premium managed house estate that continues to operate at the highest standards in the industry. Our riverside locations, beautiful gardens and growing number of roof terraces meant the business was well placed to take advantage of the fabulous summer weather and the performance of the England football team at the FIFA World Cup. The Christmas trading period was also very strong, with Young's pubs packed full of seasonal cheer and merriment.

Total revenue was up 8.7% to £303.7 million, yet again underpinned by our managed house like-for-like performance, enhanced by complementary, eye-catching acquisitions. Through strong conversion, profit before tax was up 5.1% to £39.5 million or up 5.9% to £43.4 million once adjusted for exceptional items.

Group operating margins of 16.0% were maintained once again at a high level for the industry, albeit slightly lower than last year (2018: 16.8%). This reflects a significant amount of investment over the past 18 months for long-term growth, both in our existing estate and acquisitions, including the recently added Redcomb pubs, as well as the external cost pressures facing the industry.

ESTABLISHED, EXPANDING AND CONSISTENT

The main driver of the group performance was our managed house division, which now makes up 95.6% of turnover, where like-for-like sales in the period were up 5.1%. This represents the eighth consecutive year of increases over 4.2% and is a great indicator of our strength and resilience over a sustained period of time. Our strong results are a testament to the quality of our incredible people who bring our premium pubs to life and demonstrate that our strategy continues to deliver.

In January we acquired 15 pubs through our purchase of the Redcomb pub group. They complement the existing Young's managed house estate both in and around London, as well as build on a growing presence in the South West. Each of the pubs has a premium offering and distinct personality that differentiates it in its local market. All with individual qualities, the pubs possess tremendous opportunities for future growth through expanding the trading space, improved operational excellence and by introducing the unique Young's style.

We acquired three more pubs during the year. Through our ongoing partnership with Berkeley Homes we opened the Naturalist (Hackney), a long leasehold, along with two freehold purchases: the Plantation (Poole), which also contributed to our growing bedroom stock with ten bedrooms, and the People's Park Tavern (Hackney), which will be 'warehoused' in the Ram Pub Company and in the future provides a fantastic opportunity for a managed pub. Following these investments, our total pub count at the end of the year stood at 269, split with 199 of those as managed houses and the remaining 70 operating under the Ram Pub Company. At the same time, we have increased our managed room stock by 88, or 15.2%, to 668 rooms.

Within the existing estate, we have also made significant investment. The two hotels acquired at the end of the last financial year, the Park (Teddington) and the Bridge (Chertsey), have both recently completed transformational refurbishments to their pub offer, bringing them in line with the Young's standard. We also started on site at the Dog & Fox (Wimbledon Village) where work has begun on adding 11 new hotel rooms and a dedicated function space, and close to my heart, in March we re-opened the Hand in Hand (Wimbledon Village), the pub where I pulled my first pint. Amongst many others, these great projects will make significant contributions in the year ahead.

Strong performance in a challenging environment

The current economic and political climate remains a challenge, and with each year the costs to our business increase; I am delighted, despite this, that the Young's team has delivered these results. Total adjusted operating profits are at a record high of £48.5 million, up by 3.4%, with an operating margin for the year of 16.0%. In the last year our managed and tenanted businesses both performed strongly and we have once again delivered results at the forefront of the industry.

In our pubs it is our general managers and their teams who deliver premium value for our customers. They are some of the very best people in the industry and really understand how to run differentiated pubs within a supportive framework. Forever the face of our business, we are constantly looking to increase the amount of time they spend coaching their teams and focussing on our customers. Managers in offices don't grow profitable sales; it's managers interacting with customers, working on the atmosphere and the quality of our offer, ensuring we deliver outstanding service who do.

INVESTMENT IN TECHNOLOGY

To match the investment in our pubs we are continually upgrading our technology to improve our offer and productivity. Following last year's successful roll out of our new till software across the estate, we have gained a greater understanding of what our customers want. We have re-launched our app, "Young's On Tap", which included new bar tab features to add to the experience of a Young's pub. Online, our websites play an important role in the customer journey and we have made significant developments enhancing their functionality and improving the interaction with our customers. We have seen an increase in organic traffic, reached new customers and improved booking conversions through the new concierge style events functionality. We will continue to evolve our digital offer to ensure we are serving our customers most effectively.

OUTLOOK

We have welcomed a warm Easter and Varsity Boat Race, both falling in April this year, as we were up against a very positive start to last year when temperatures during April and the early May Bank Holiday reached 30 degrees. For the last thirteen weeks our total sales were up 9.4%, and like-for-like sales were up 2.6% reflecting the tough comparatives.

The two new hotels added last year, the Park and the Bridge, are open and trading strongly following their recent investment. We will be investing in a number of the newly acquired Redcomb pubs over the course of the year, although the focus for now is on ensuring a smooth operational transition. 

Since the year-end we have opened the Depot (Kidbrooke Village) which is a roaring success with locals, another pub as part of our successful partnership with Berkeley Homes. In April, we transferred the New Inn (Ealing) from the Ram Pub Company into the managed house division; the true benefit of this will come later in the year following a planned refurbishment.  

Looking ahead, the amazing weather throughout the summer of 2018 and England's World Cup success sets a high benchmark. It has been a busy period of acquisitions and investment in our estate, and we are excited about the opportunities to unlock that potential.

PROGRESSIVE DIVIDEND POLICY

Given these strong results, we are pleased to recommend raising the final dividend for the 22nd consecutive year, once again by 6.0%, this time to 10.81 pence. If approved by shareholders, this will give a total dividend for the year of 20.78 pence (2018: 19.61 pence), representing a real income increase from Young's shares. The final dividend is expected to be paid on 11 July 2019 to shareholders who are on the register of members at the close of business on 7 June 2019.

business and financial review

MANAGED HOUSES

For our managed houses it has been a standout year. Maintaining such high performance only gets harder with each year, but our impressive like-for-like sales growth of 5.1% (2018: 4.2%) demonstrates the bedrock of consistency on which we pride ourselves. Over the last eight years our managed houses have averaged like-for-like sales growth of 5.4%.

An increase in our acquisition activity in the past 18 months has helped add to our total revenue growth, and as a result total revenue for the year was up 9.0%, to £290.3 million. The exciting purchase of Redcomb's 15 pubs has added prime locations with tremendous opportunities for sales growth. They have also brought further geographical diversity into the estate with two new locations in the South West. We also added the Plantation, a small hotel with 10 rooms on the south coast near Poole, Dorset. Aligned with our strategy of targeted quality acquisitions in the South of England, these pubs further extend the Young's reach. This now takes our managed estate to 199 pubs, including 30 hotels, and is an increase of 18 pubs compared with the previous year.  

Continuing to drive and support the pubs and their teams to outperform the market is a relentless pursuit, but it's one that we embrace wholeheartedly. Our longstanding record of consistently raising the bar in our offer and accompanying results creates its own challenges, but our ambition and work ethic gives us that extra spring in our step to continue to excel.             

REVENUE AND PROFITS

Sales in the first half of the year were given the perfect start as our riverside locations and beautiful gardens provided ideal locations as customers looked to bask in the sunshine for the hottest British summer on record. For many, the summer of 2018 will also be fondly remembered as football fever gripped the nation, and it wasn't just Gareth Southgate who liked to enjoy a pint of Young's Bitter, as England's success helped boost pub footfall during the five-week tournament period. At the half year we had achieved like-for-like sales growth of 5.2%, which was maintained during the second half thanks to another exceptional Christmas season for Young's and some welcome early spring sunshine; together, this saw us close out the year with a like-for-like sales increase of 5.1%.

Through those early summer months, pubs were once again the focus for social gatherings and it was our drink sales which benefitted most. Craft lager and ale continue to grow in popularity, with craft keg ale sales increasing by 22.9%. Again, the premium choice of customers is the driving force, with the two key brands of Camden and Beavertown being the success stories, and their sales have now matched those of all cask ale. For the year, total drinks sales were up 9.6% and up 6.5% on a like-for-like basis.

Cask ale remains a key part of our heritage and reputation and this year we were particularly excited to work alongside St Austell Brewery which now sees Proper Job sit perfectly alongside our existing Young's portfolio and our established 'local hero' products. Young's pubs offer the environment for our customers to enjoy a perfect pint of cask ale and it is important that it maintains its presence on bar in the ever-changing pub market. To ensure the premium quality of our cask ale we closely manage our throughputs and control cellar temperatures, whilst our 'Hop Masters' training programme focuses on all things beer; from the history and process of brewing to the latest in beer trends.

At the start of the year we launched our latest gin campaign, 'Spring into Gin', where the focus and innovation were on flavour, both in the gins and mixers, adding further interest and colour. Its success alongside the popularity of the 'ginspired' premium serve balloon glass kept the Young's gin revolution rolling on, as sales rose by 35.2%, making it the sixth consecutive year with sales growth of over 20%. Our sales of gin are 34.5% of total spirit sales, and compared with the market we are over-indexed, highlighting our premium standing from this resurgent product.

We have also taken on a more premium position with our wine offer as training and marketing activity is aimed towards a 'Super 6' and 'Focus' range as part of our partnership with Berkmann Wine Cellars. We continue to benefit from their expertise, a wider range of new world wines and a more engaged workforce through the jointly run 'Grape Masters' programme. Our customers have, in turn, enjoyed the journey from traditional house wines to more complex grape varieties, most recently the rosé revolution. 

Our now established 'Cocktail Collective', which focuses on delivering a selective range of quality, perfectly served cocktails, has played a significant part in another year of outstanding cocktail growth, with sales up 32.1% (2018: 46.1%). The most popular cocktail for a second successive year has been Aperol Spritz which has seen a boom of 70.0% (2018: 85.0%). Overall, spirit sales grew by 14.4%.

We remain confident in our food strategy in what continues to be a challenging marketplace. Our expert team of executive chefs work tirelessly to ensure that British, seasonal and fresh produce are at the heart of every dish we produce. With our menus continually changing with the seasons, this year we introduced the 'Famous For' strategy which allows each pub to find that something different that customers can associate them with. A fine example of this is the Windmill (Mayfair) with a nod to 'proper pub grub'; its hand crafted and traditional British seasonal pies made with homemade pastry are winners with its customers, and last year their venison pie came highly commended at the prestigious Annual Pie Awards finishing in the top 3 of the specialty meat class. Our five Young's classics and the ultimate Sunday lunches remain at the core of our strategy. In total, food sales were up 6.1%, and up 1.7% on a like-for-like basis. With no Easter bank holidays falling in the financial year, this had a negative 0.6% pts impact on our like-for-like food sales; excluding this period they were up 2.3%.

Nowadays, in such a competitive market, consumers are spoilt for choice and expect a unique customer experience  that sets itself apart from the crowd. A great example of this is the Devonshire (Balham), which, following on from last year, flipped more than burgers as it turned the successful "Balham Peaks" on its head, as the popular pop-up became the "Balham Beach Club" during the summer months. Decked out with sand, beach hut cabanas and deck chairs, customers enjoyed summer-themed cocktails and Aperol Spritz, alongside freshly cooked burgers straight from the Burger Shack garden grill.

Hotel room sales have also had another successful year, up 5.4% on a like-for-like basis. Occupancy rates were 75.5%, up by 0.8% pts on the previous year, and RevPar increased by £3.24 or 5.1% to £66.39. Total accommodation revenue has increased by a considerable 19.6%, largely driven by the two hotels acquired at the end of the last financial year. Split across five new hotels, we have also added 88 rooms in the last twelve months, bringing our total room stock to 668. Another key part of our premium offer is the high standard of our hotel rooms. With designated capital investment set aside each year for an average of 5 hotels, improvements are made to meet the long term vision of our room quality. Projects focus on improving specifications to boutique standard, modernising bathrooms and installing air conditioning. This investment has gone a long way to helping support such healthy like-for-like sales growth.

It has been another year where we have had to combat further increases to our cost base. The well-publicised cost headwinds such as business rates, another year's instalment of the national living wage and the apprenticeship levy have added significantly to our operating costs. Over the past 18 months we have invested significantly on acquisitions, some of which are taking their time to achieve their expected returns. Despite these factors, our managed house adjusted operating profit grew by 1.3% to £61.5 million.  

INVESTMENT

In the year, we were extremely excited to acquire Redcomb Pubs, the owner and operator of 15 sites in prime locations in and around London and in the South West, increasing our coastal presence and further enhancing the Young's brand. They fit well with our strategy, which focusses on adding high quality managed houses where our premium offer will work extremely well.

Elsewhere we made other major acquisitions, openings and transfers, all of which are unique in their own way yet still at the premium end of the market.  The highlights include:

·      the Naturalist, a new waterside development in the regeneration area of Woodberry Down (Hackney), and another in the list of pubs opened in partnership with Berkeley Homes;

·      the Plantation, further increasing our hotel room stock with the addition of 10 rooms at Canford Cliffs Beach, near to the well-known Sandbanks in Poole; and

·      the Bear, now a stunning refurbished 18^th century country inn, in Cobham in the heart of Surrey, transferred from the Ram Pub Company late in the financial year.

A common theme in all these acquisitions is their superb locations and future potential, both fundamental factors in our investment decisions.   

During the course of the year, including acquisitions, we invested £52.2 million in our managed estate.

Significant investment was made in two of last year's acquisitions, the Park and the Bridge, with the pub and dining areas at both transformed, elevating these businesses to show the best in class, premium standards of Young's. Alongside these, we have targeted investment in our core estate, designed to update or increase trading areas with major projects undertaken at the Bull (Westfield Shepherd's Bush), Cow (Westfield Stratford), Coach & Horses (Kew), Hand in Hand, Red Barn (Lingfield), Waterside (Fulham), Wheatsheaf (Borough Market) and the White Hart (Sherfield). 

CUSTOMER ENGAGEMENT

Technology is such an important part of the customer experience, from the start to the end of their interaction with the pub, and we understand how vital it is to our success. This year we have re-launched our corporate website onto an updated platform to offer customers a visually more impactful experience and a smoother customer journey, as well as driving search optimisation. We are seeing the benefit of modernising our individual pub websites, resulting in above industry-average booking conversion rates and significant growth in online bookings across the pubs.

Elsewhere we have launched our new hotel booking system, facilitating a seamless customer journey. Its 7 stage booking process allows guests to tailor their stay to the occasion, whether it be adding a bottle of something bubbly in the room, reserving a table for dinner or arranging tickets for a local event.

Now in its third year, 'Young's On Tap' was re-launched with a simpler mobile payment process to enhance the customer journey and drive revenue. Our new bar tab functionality allows customers to create a digital tab via the app, order at the bar or to their table and invite guests to join their tab. When it's time to leave, payment and bill splitting can all be done through the app, giving customers flexibility while taking pressure off staff, leaving them more time to serve customers. The latest update is now able to support our centralised marketing campaigns by providing targeted treats for users with accompanying push notifications to encourage repeat visits.

The customer journey wouldn't be complete without the interaction with our teams and the pubs themselves. This year we completed the roll out of our new enhanced till system which allows for a more interactive experience for staff as well as the infrastructure that connects with multiple third party platforms, reflecting our belief that trading is only likely to become ever more reliant on technology.

RAM PUB COMPANY

It has been a strong year for the Ram Pub Company, with focus on good estate management as well as building on the opportunities that we can help to develop and support through healthy working relationships with our tenants.

We sold two pubs at the tail of the estate for combined proceeds of £1.3 million: the William IV (Bletchingley) and the King's Arms (Mitcham), whilst also exiting from our lease agreement at the Queen's Head (Stepney Green). 

In early 2019, we transferred the Bear, acquired last year, to our managed house division in order to maximise its potential further, returning it to its former glory as a fantastic, local village pub. Other transfer opportunities do exist within the Ram Pub Company which we will look to harvest when the time is right for both us and our tenants.

As a result of the above movements, the Ram Pub Company ended the year with 70 pubs down from 74 in the previous year. 

REVENUE AND PROFITS

In total, revenue within the Ram Pub Company was up by 3.2%, reflective of the net reduction in pubs. On a like-for-like basis, revenue growth was up 5.0%; the highest in over a decade, with growth driven from both increased beer sales as well as the rents we receive from our tenants.

Our increasing like-for-like sales, improving margins and continued investment have resulted in total adjusted operating profit of £5.0 million, an increase of £0.6 million or 13.6%. Our average pub EBITDA was £96.4K (2018: £80.6K) and remains one of the highest in the sector. 

With the good year for the Ram Pub Company, it now represents 7.5% of adjusted operating profit at pub level whilst its share of total group revenue has fallen to 4.3%.

INVESTMENT

In December 2018, we welcomed the People's Park Tavern and its tenant into the Ram Pub Company. This attractive freehold pub has an extensive garden which backs onto the edge of Victoria Park in East London and, in time, will become another exciting future managed opportunity. Within our existing estate, we follow a structured and viable investment programme to ensure that each tenanted pub is maintained at an attractive standard to appeal to customers, current tenants and future business partners.

In the past year we've completed major developments at the Calthorpe Arms (Bloomsbury), Grand Junction Arms (Harlesden), Surprise (Lambeth), Swan Inn (Sidmouth) and the White Hart (Witley). In addition to these projects we are currently underway with the exciting development of the Ram Inn (Wandsworth) on the site of the old Ram Brewery, which will see this iconic pub restored back to its former glory. Completion and opening of the pub is due early in the new financial year. 

TENANT ENGAGEMENT

Our tenanted model is focussed upon developing and maintaining businesses that offer a sustainable income for individual tenants and sustainable profits for Young's.  It's a partnership built on trust and a common goal. By reflecting industry codes of practice, rents can move down as well as up. Our entrepreneurial tenants, supported by our own experienced in-house team, continue to operate bespoke offerings, tailored to attract customers in the communities they serve under the strapline "Everyone's local".

PROPERTY, TREASURY, GOING CONCERN, RETIREMENT BENEFITS, EXCEPTIONAL ITEMS AND TAX

PROPERTY

Our balance sheet strength is underpinned by our predominately freehold estate in many highly desirable locations. 222 of our total 269 pubs are freehold or long leaseholds with peppercorn rents. Our total estate is now valued at £807.0 million (2018: £742.9 million). The increased value has been driven by acquisitions, major developments and improving existing pub values, especially in our London heartland, assisted by our growing trade.

Each year we undertake an exercise to revalue our pub estate to reflect current market values. Savills, an independent and leading commercial property adviser, revalued 20% of our estate, while an internal review of the remaining 80% was led by Andrew Cox, MRICS, our Director of Property and Tenancies. The valuation method used a number of inputs of which the sustainable level of trade of each pub is key. 

In accordance with International Financial Reporting Standards, individual increases in value have been reflected in the revaluation reserve in the balance sheet (except to the extent that they had previously been revalued downwards) and individual falls in value below depreciated cost have been accounted for through the income statement. None of these adjustments have a cash impact.

The pub property market in London and the surrounding areas has remained strong throughout the period, which, coupled with our continued trading performance, has resulted in a net upward revaluation movement of £25.2 million (2018: £29.5 million). This is comprised of an upward movement of £25.3 million (2018: £29.2 million) reflected in the revaluation reserve and a downward movement of £0.1 million (2018: £0.3 million reversal of downward movement) recognised in the income statement under exceptional items.

TREASURY

We remain highly cash generative. Our operating cash flow was £69.2 million (2018: £61.4 million) with our premium business and predominantly freehold estate outperforming the market. 

Following the acquisition of Redcomb pubs, our total net debt has increased by £23.1 million to £163.6 million. The leverage ratio impact of the Redcomb acquisition was slightly exaggerated due to the completion date falling in the last quarter of the year. Nevertheless, our net debt to adjusted EBITDA ratio remains conservative at 2.2 times (2018: 2.0 times) underpinned by our strong balance sheet, giving us opportunities to pursue our acquisition strategy. Gearing is 27.6% (2018: 25.6%).

During the year, we utilised the accordion mechanism in our revolving credit facility, extending it from £75 million to £100 million and thus bringing our year-end funding facilities to £200 million. Taken out in March 2018, the revolving credit facility, split evenly between HSBC and Barclays, initially ran until 2023. We extended the facility to 2024; a further one year option to extend to 2025 remains. All of our remaining facilities are unamended. Of our drawn debt, 61.0% is on fixed interest rates.

After the end of the financial year we secured additional long-term debt financing through a private placement.  This will see us raise £35 million in July 2019, with Barings receiving senior secured notes at a fixed interest rate of 3.30% for 20 years.

GOING CONCERN

Given our long-term facilities, our freehold estate, significant free cash flow and the conservative financial ratios referred to above, we have prepared our 2019 financial statements on a going concern basis.

RETIREMENT BENEFITS

We have a defined benefit pension scheme which has been closed to new entrants since 2003. During the course of the year our pension deficit has increased by £2.5 million to £8.6 million. Compared with last year, the rate of inflation has remained flat whilst we have continued our commitment with another year of special contributions, totalling £1.2 million, and we remain fully committed to ensuring the pension scheme is adequately funded.

A recent High Court judgement handed down regarding the Lloyds Banking Group's defined benefit pension scheme will affect many pension schemes in the UK, including the company's scheme. The judgement concluded that schemes should be amended to ensure that members who have guaranteed minimum pensions receive the same benefits regardless of their gender. This change impacts on guaranteed minimum pension benefits accrued between 1990 and 1997. The trustee of the company's scheme is considering the impact of the judgement on scheme liabilities and individual members, and at 1 April 2019 this work is ongoing.

In consultation with independent actuaries, the company has estimated that the financial effect of equalising benefits is to increase the company's accounting pension deficit in the balance sheet by £2.5 million. This is required to be accounted for as a benefit change, and a non-cash charge has been recognised as a past service cost.

EXCEPTIONAL ITEMS

Due to the size and nature of the guaranteed minimum pension charge, the £2.5 million has been presented as an exceptional item in the income statement, making up the majority of the total £3.9 million of exceptional items.

It was another busy year on the acquisition front and the associated costs related to business combinations were £1.2 million (2018: £1.2 million). The most significant investment decision of the year was the acquisition of the Redcomb group, and there were further costs relating to the People's Park Tavern. The Bear was the latest pub to transfer across to managed following its acquisition in the prior year. An early termination was also agreed with the tenant of the Bayee Village (Wimbledon Village) as part of the project at the Dog & Fox. Compensation payable to terminate their lease agreements early is expensed under IFRS, with the cost in the year of £0.5 million included within exceptional items.

The remaining exceptional items are a charge relating to the revaluation of the pub estate of £0.1 million, as mentioned previously, along with a profit on disposal of two tenanted pubs of £0.4 million.

TAX

Our corporation tax charge for the year was £8.0 million, with a fall in our effective corporation tax rate for the year, adjusted for exceptional items, of 0.6% pts to 18.7%. The headline UK corporation tax rate remained at 19.0% and is set to reduce in future years to 17.0% from April 2020 impacting on deferred tax balances.   

The group's tax strategy has been published on the Young's website in accordance with recent UK tax law.

SHAREHOLDER RETURNS

Having started life in 1831, Young's is a long-standing business and we are determined to continue our long-term, sustainable growth story. We continue to deliver strong performances from our existing estate and our hand-picked developments, focussing on both immediate and maintainable gains.

Our strong and sustainable cash flows support our acquisition and development programs to maintain our pubs at the premium end of the market, maximise future returns, maintain net debt at acceptable levels and help continue our proud record of consecutive dividend increases.

This year, we are pleased to recommend raising the final dividend for the 22nd consecutive year, once again by 6.0%, this time to 10.81 pence. If approved by shareholders, this will give a total dividend for the year of 20.78 pence (2018: 19.61 pence), representing a real income increase from Young's shares.

Our adjusted earnings per share now stands at 72.13 pence per share, up 6.5%. On an unadjusted basis, earnings per share rose by 4.5% to 64.36 pence. These earnings per share figures result in a healthy dividend cover of 3.5 times and 3.1 times respectively.  

Patrick Dardis

Chief Executive

22 May 2019

GROUP INCOME STATEMENT

For the 52 weeks ended 1 April 2019

		2019	2018
	Notes	£m	£m
Revenue		303.7	279.3
Operating costs before exceptional items		(255.2)	(232.4)
Operating profit before exceptional items		48.5	46.9
Operating exceptional items	3	(3.9)	(3.4)
Operating profit		44.6	43.5
Finance costs		(5.0)	(5.6)
Other finance charges		(0.1)	(0.3)
Profit before tax		39.5	37.6
Taxation	5	(8.0)	(7.5)
Profit for the period attributable to shareholders of the parent company		31.5	30.1

		Pence	Pence
Earnings per 12.5p ordinary share
Basic	7	64.36	61.60
Diluted	7	64.31	61.56

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the 52 weeks ended 1 April 2019

		2019	2018
	Notes	£m	£m
Profit for the period		31.5	30.1
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Unrealised gain on revaluation of property	8	25.3	29.2
Remeasurement of retirement benefit schemes	9	(1.2)	5.8
Tax on above components of other comprehensive income		(3.2)	(4.5)
Items that will be reclassified subsequently to profit or loss:
Fair value movement of interest rate swaps		0.5	4.3
Tax on fair value movement of interest rate swaps		(0.1)	(0.7)
		21.3	34.1
Total comprehensive income for shareholders of the parent company		52.8	64.2

BALANCE SHEETS

At 1 April 2019

		2019	2018
	Notes	£m	£m
Non-current assets
Goodwill and intangible assets		33.5	19.7
Property and equipment	8	807.0	742.9
Investment in subsidiaries		-	-
Deferred tax assets		7.4	6.4
Lease premiums		12.9	13.6
		860.8	782.6
Current assets
Inventories		3.7	3.0
Trade and other receivables		8.3	7.0
Lease premiums		0.7	0.8
Cash		8.5	7.2
		21.2	18.0
Total assets		882.0	800.6
Current liabilities
Borrowings		(8.5)	(10.0)
Derivative financial instruments		(1.9)	(1.9)
Trade and other payables		(35.9)	(30.9)
Income tax payable		(4.8)	(4.3)
		(51.1)	(47.1)
Non-current liabilities
Borrowings		(163.6)	(137.7)
Derivative financial instruments		(4.2)	(4.7)
Deferred tax liabilities		(60.6)	(54.6)
Retirement benefit schemes	9	(8.6)	(6.1)
Other liabilities		(0.5)	(1.2)
		(237.5)	(204.3)
Total liabilities		(288.6)	(251.4)
Net assets		593.4	549.2
Capital and reserves
Share capital		6.1	6.1
Share premium		6.7	5.7
Capital redemption reserve		1.8	1.8
Hedging reserve		(4.8)	(5.2)
Revaluation reserve		295.1	273.3
Retained earnings		288.5	267.5
Total equity		593.4	549.2

GROUP STATEMENTS OF CASH FLOW

For the 52 weeks ended 1 April 2019

		2019	2018
	Notes	£m	£m
Operating activities
Net cash generated from operations	10	69.2	61.4
Tax paid		(9.2)	(9.1)
Net cash flow from operating activities		60.0	52.3
Investing activities
Sale of property and equipment		1.3	2.1
Purchases of property, equipment and lease premiums		(33.9)	(30.4)
Business combinations, net of cash acquired		(25.3)	(23.0)
Investment in subsidiaries		-	-
Net cash used in investing activities		(57.9)	(51.3)
Financing activities
Interest paid		(5.1)	(5.3)
Issued equity		0.3	-
Equity dividends paid	6	(9.9)	(9.3)
Repayment of borrowings		(12.1)	(20.0)
Proceeds from borrowings		26.0	34.2
Net cash flow used in financing activities		(0.8)	(0.4)
Increase in cash		1.3	0.6
Cash at the beginning of the period		7.2	6.6
Cash at the end of the period		8.5	7.2

GROUP STATEMENT OF CHANGES IN EQUITY

At 1 April 2019

			Capital
		Share	redemption	Hedging	Revaluation	Retained	Total
		capital(1)	reserve	reserve	reserve	earnings	equity
Notes		£m	£m	£m	£m	£m	£m
At 3 April 2017		11.3	1.8	(8.8)	247.7	241.0	493.0
Total comprehensive income
Profit for the period		-	-	-	-	30.1	30.1
Other comprehensive income
Unrealised gain on revaluation of property	8	-	-	-	29.2	-	29.2
Remeasurement of retirement benefit schemes	9	-	-	-	-	5.8	5.8
Fair value movement of interest rate swaps		-	-	4.3	-	-	4.3
Tax on above components of other comprehensive income		-	-	(0.7)	(3.5)	(1.0)	(5.2)
		-	-	3.6	25.7	4.8	34.1
Total comprehensive income		-	-	3.6	25.7	34.9	64.2
Transactions with owners recorded directly in equity
Share capital issued		0.5	-	-	-	-	0.5
Dividends paid on equity shares		-	-	-	-	(9.3)	(9.3)
Revaluation reserve realised on disposal of properties		-	-	-	(0.1)	0.1	-
Share based payments		-	-	-	-	0.6	0.6
Movement in shares held by The Ram Brewery Trust II		-	-	-	-	0.2	0.2
		0.5	-	-	(0.1)	(8.4)	(8.0)
At 2 April 2018		11.8	1.8	(5.2)	273.3	267.5	549.2
Total comprehensive income
Profit for the period		-	-	-	-	31.5	31.5
Other comprehensive income
Unrealised gain on revaluation of property	8	-	-	-	25.3	-	25.3
Remeasurement of retirement benefit schemes	9	-	-	-	-	(1.2)	(1.2)
Fair value movement of interest rate swaps		-	-	0.5	-	-	0.5
Tax on above components of other comprehensive income		-	-	(0.1)	(3.5)	0.3	(3.3)
		-	-	0.4	21.8	(0.9)	21.3
Total comprehensive income		-	-	0.4	21.8	30.6	52.8
Transactions with owners recorded directly in equity
Share capital issued		1.0	-	-	-	-	1.0
Dividends paid on equity shares		-	-	-	-	(9.9)	(9.9)
Share based payments		-	-	-	-	0.3	0.3
		1.0	-	-	-	(9.6)	(8.6)
At 1 April 2019		12.8	1.8	(4.8)	295.1	288.5	593.4

(1) Total share capital comprises the nominal value of the share capital issued and fully paid of £6.1 million (2018: £6.1 million) and the share premium account of £6.7 million (2018: £5.7 million). Share capital issued in the period comprises the nominal value of £nil (2018: £nil) and share premium of £1.0 million (2018: £0.5 million).

1. Accounts

This preliminary announcement was approved by the board on 22 May 2019.  The financial statements in it are not the group's statutory financial statements.  The statutory financial statements for the period ended 2 April 2018 have been delivered to the Registrar of Companies.  The auditor has reported on those financial statements and on the statutory financial statements for the period ended 1 April 2019, which are expected to be delivered to the Registrar of Companies shortly.  Both audit reports were unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the reports and did not contain any statement under s.498(2) or (3) of the Companies Act 2006.

The current period and prior period relate to the 52 weeks ended 1 April 2019 and 2 April 2018 respectively. The financial statements are presented in pounds sterling and all values are rounded to the nearest hundred thousand (£0.1 million) except where otherwise indicated.

This preliminary announcement has been agreed with the company's auditor for release.

The audited financial information in this statement has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union.  The accounting policies used have been consistently applied and are described in full in the statutory financial statements for the period ended 1 April 2019, which are expected to be mailed to shareholders on or before 12 June 2019.  The financial statements will also be available on the group's website, www.youngs.co.uk.

2. Segmental reporting

The group is organised into the reporting segments referred to below. These segments are based on the different resources and risks involved in the running of the group. The executive board of the group internally reviews each reporting segment's operating profit or loss before exceptional items for the purpose of deciding on the allocation of resources and assessing performance.

The group has two operating segments: Young's managed houses and the Ram Pub Company. Young's managed houses operate pubs with revenue derived from sales of drink, food and the provision of accommodation. The Ram Pub Company consists of pubs owned or leased by the company and leased or sub leased to third parties. Revenue is derived from rents payable by, and sales of drink made to, tenants. Unallocated income and costs relate to head office.

Total segment revenue is derived externally with no intersegment revenues between the segments in either period. The group's revenue is derived entirely from the UK.

Income statement	Managed	Ram Pub		Segments	Unallocated	Total
	houses	Company		total
2019	£m	£m		£m	£m	£m
Sales of goods	276.4	9.7		286.1	-	286.1
Accommodation sales	13.3	-		13.3	-	13.3
Revenue recognised under contracts with customers	289.7	9.7		299.4	-	299.4
Rental income	0.6	3.3		3.9	0.4	4.3
Total revenue recognised	290.3	13.0		303.3	0.4	303.7
Operating profit/(loss) before exceptional items	61.5	5.0		66.5	(18.0)	48.5
Operating exceptional items	(0.9)	(0.5)		(1.4)	(2.5)	(3.9)
Operating profit/(loss)	60.6	4.5		65.1	(20.5)	44.6
2018
Sales of goods	254.7	9.3		264.0	-	264.0
Accommodation sales	11.2	-		11.2	-	11.2
Revenue recognised under contracts with customers	265.9	9.3		275.2	-	275.2
Rental income	0.5	3.3		3.8	0.3	4.1
Total revenue recognised	266.4	12.6		279.0	0.3	279.3
Operating profit/(loss) before exceptional items	60.7	4.4		65.1	(18.2)	46.9
Operating exceptional items	(4.0)	0.6		(3.4)	-	(3.4)
Operating profit/(loss)	56.7	5.0		61.7	(18.2)	43.5
The following is a reconciliation of the operating profit to the profit before tax:
					2019	2018
					£m	£m
Operating profit					44.6	43.5
Finance costs					(5.0)	(5.6)
Other finance charges					(0.1)	(0.3)
Profit before tax					39.5	37.6

3. Exceptional items

	2019	2018
	£m	£m
Amounts included in operating profit:
Upward movement on the revaluation of properties(1) (note 8)	3.4	2.1
Downward movement on the revaluation of properties(1) (note 8)	(3.5)	(1.8)
Guaranteed minimum pension equalisation(2) (note 9)	(2.5)	-
Tenant compensation(3)	(0.5)	(2.8)
Acquisition costs(4)	(1.2)	(1.2)
Net profit on sale of properties(5)	0.4	0.3
Loss on disposal of property(6)	-	(0.5)
Onerous lease provision released on disposal of property(6)	-	0.5
	(3.9)	(3.4)
Exceptional tax:
Tax attributable to above adjustments	0.1	0.4
	0.1	0.4
Total exceptional items after tax	(3.8)	(3.0)

⁽¹⁾ The movement on the revaluation of properties is a non-cash item that relates to the revaluation exercise that was completed based on the period end date. The revaluation was conducted at an individual pub level and identified an upward movement of £3.4 million (2018: £2.1 million) representing reversals of previous impairments recognised in the income statement, and a downward movement of £3.5 million (2018: £1.8 million), representing downward movements in excess of amounts recognised in equity. These resulted in a net downward movement of £0.1 million (2018: £0.3 million net upward) which has been recognised in the income statement. The downward movement for the period ended 1 April 2019 was split between land and buildings of £0.1 million downward (2018: £0.3 million upward) and fixtures and fittings of £nil (2018: £nil). See note 5 for segmental information.

⁽²⁾ The Guaranteed Minimum Pension (GMP) is the minimum pension which a UK occupational pension scheme must provide for those employees who were contracted out of the State Earnings-Related Pensions Scheme between 6 April 1978 and 5 April 1997. Following the ruling of the High Court of Justice of England and Wales on 26 October 2018, the need to equalise the effect of differences in GMPs between males and females was made more certain and consequently an allowance for the effect of GMP equalisation has been made in the current financial period. Although a number of methodologies could be used to determine the impact, the group has adopted method C2 to identify its best estimate of the additional liabilities. These are charged as a past service cost in the income statement as an exceptional item since the liabilities relate to employee service between 1990 and 1997 and they have no link to current business performance. The increase in liabilities (note 9) as at 1 April 2019 is estimated at £2.5 million, assessed using market conditions at the date of the ruling as required by IAS 19.

⁽³⁾ Tenant compensation of £0.5 million was paid to the previous tenants of the Bear (Cobham) and the Bayee Village (Wimbledon Village) to terminate their lease agreements early. During the prior period, the group paid tenant compensation of £2.8 million to the previous tenants of the Hope & Anchor (Brixton), Grove (Camberwell) and the King's Arms (Wandsworth).

⁽⁴⁾ The acquisition costs relate to the purchase of Redcomb Pubs Limited, a corporate group with 15 sites acquired on 23 January 2019, along with the People's Park Tavern (Hackney) and the Plantation (Poole). They include legal and professional fees and stamp duty land tax. The prior period acquisition costs related to the Chequers Inn (Hanham Mills), Smiths of Smithfield (Smithfield Market), Smiths (Cannon Street), Park (Teddington) and the Bridge (Chertsey).

⁽⁵⁾ The profit on sale of properties relates to the difference between the cash, less selling costs, received from the sale of the King's Arms (Mitcham) and the William IV (Bletchingley) and the carrying value of the assets on the date of sale. In the prior period there was a profit from the sale of the King's Arms (Epsom).

⁽⁶⁾ The prior year loss on disposal of properties relates to the difference between cash, less selling costs, received from the sale of the Court House (Dartford) and the carrying value of the net assets at the date of sale. Previously an onerous lease was recognised in respect of the property which was subsequently released on disposal.

4. Other financial measures

The table below shows how adjusted group EBITDA, operating profit and profit before tax have been arrived at. They exclude exceptional items which due to their material or non-recurring nature distort the group's performance. These alternative performance measures have been provided to help investors assess the group's underlying performance.  Details of the exceptional items can be seen in note 3. All the results below are from continuing operations.

		2019			2018
			Exceptional			Exceptional
	Unadjusted		items	Adjusted	Unadjusted	items	Adjusted
	£m		£m	£m	£m	£m	£m
EBITDA	69.0		3.8	72.8	65.0	3.7	68.7
Depreciation and net movement on the revaluation of properties	(23.5)		0.1	(23.4)	(20.8)	(0.3)	(21.1)
Amortisation of lease premiums	(0.9)		-	(0.9)	(0.7)	-	(0.7)
Operating profit	44.6		3.9	48.5	43.5	3.4	46.9
Net finance costs	(5.0)		-	(5.0)	(5.6)	-	(5.6)
Other finance charges	(0.1)		-	(0.1)	(0.3)	-	(0.3)
Profit before tax	39.5		3.9	43.4	37.6	3.4	41.0

Any reference to 'like-for-like' means excluding the impact of any acquisitions or disposals in the financial period. 

5. Taxation

	2019	2018
Tax charged in the group income statement	£m	£m
Current tax
Current tax expense	9.3	8.7
Adjustment in respect of current tax of prior periods	(0.4)	-
	8.9	8.7
Deferred tax
Origination and reversal of temporary differences	(0.9)	(1.2)
	(0.9)	(1.2)
Tax expense	8.0	7.5
Deferred tax in the group income statement
Property revaluation and disposals	(0.1)	(0.5)
Capital allowances	(0.5)	(0.9)
Retirement benefit schemes	(0.2)	0.2
Share based payments	0.1	-
Trade losses	(0.2)	-
Tax credit	(0.9)	(1.2)
Deferred tax in the group statement of comprehensive income
Property revaluation and disposals	3.5	3.5
Retirement benefit schemes	(0.3)	1.0
Interest rate swaps	0.1	0.7
Tax charge	3.3	5.2

Changes to the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and then to 17% (effective from 1 April 2020) were substantively enacted into law on 6 September 2016.  Deferred tax balances that will be realised or settled between 3 April 2018 and 1 April 2020 have been measured at 19%, with the remainder remeasured at 17%.

6. Dividends on equity shares

	2019	2018	2019	2018
	Pence	Pence	£m	£m
Final dividend (previous period)	10.20	9.62	5.0	4.7
Interim dividend (current period)	9.97	9.41	4.9	4.6
	20.17	19.03	9.9	9.3

In addition, the board is proposing a final dividend in respect of the period ended 1 April 2019 of 10.81 pence per share at a cost of £5.3 million. If approved, it is expected to be paid on 11 July 2019 to shareholders who are on the register of members at the close of business on 7 June 2019.

7. Earnings per ordinary share

(a) Earnings	2019	2018
	£m	£m
Profit attributable to equity shareholders of the parent	31.5	30.1
Operating exceptional items	3.9	3.4
Tax attributable to above adjustments	(0.1)	(0.4)
Adjusted earnings after tax	35.3	33.1
	Number	Number
Basic weighted average number of ordinary shares in issue	48,941,761	48,862,927
Dilutive potential ordinary shares from outstanding employee share options	41,753	33,413
Diluted weighted average number of shares	48,983,514	48,896,340
(b) Basic earnings per share
	Pence	Pence
Basic	64.36	61.60
Effect of exceptional items and other adjustments	7.77	6.14
Adjusted basic	72.13	67.74
(c) Diluted earnings per share
	Pence	Pence
Diluted	64.31	61.56
Effect of exceptional items and other adjustments	7.76	6.13
Adjusted diluted	72.07	67.69

The basic earnings per share figure is calculated by dividing the profit attributable to equity shareholders of the parent for the period by the weighted average number of ordinary shares in issue during the period.

Diluted earnings per share have been calculated on a similar basis taking into account 41,753 (2018: 33,413) dilutive potential shares under the SAYE scheme.

Adjusted earnings per share are presented to eliminate the effect of the exceptional items and the tax attributable to those items on basic and diluted earnings per share.

8. Property and equipment

		Fixtures,
	Land &	fittings &
	buildings	equipment	Total
	£m	£m	£m
Cost or valuation
At 3 April 2017	647.3	121.3	768.6
Additions	9.3	20.7	30.0
Business combinations	12.7	3.5	16.2
Disposals	(1.0)	-	(1.0)
Fully depreciated assets	(0.7)	(11.3)	(12.0)
Transfers from lease premiums	0.4	-	0.4
Transfers from subsidiary companies	-	-	-
Revaluation(1)
-effect of upward movement in property valuation	32.5	-	32.5
-effect of downward movement in property valuation	(4.9)	-	(4.9)
At 2 April 2018	695.6	134.2	829.8
Additions	10.1	23.8	33.9
Business combinations	23.5	5.8	29.3
Disposals	(1.1)	(0.3)	(1.4)
Fully depreciated assets	(0.2)	(15.5)	(15.7)
Revaluation(1)			-
-effect of upward movement in property valuation	34.0	-	34.0
-effect of downward movement in property valuation	(10.4)	-	(10.4)
At 1 April 2019	751.5	148.0	899.5
Depreciation and impairment
At 3 April 2017	30.5	49.0	79.5
Depreciation charge	1.8	19.3	21.1
Disposals	-	-	-
Fully depreciated assets	(0.7)	(11.3)	(12.0)
Transfers from lease premiums	0.2	-	0.2
Transfers from subsidiary companies	-	-	-
Revaluation(1)
-effect of downward movement in property valuation	1.8	-	1.8
-effect of upward movement in property valuation	(3.7)	-	(3.7)
At 2 April 2018	29.9	57.0	86.9
Depreciation charge	1.9	21.5	23.4
Disposals	(0.4)	(0.1)	(0.5)
Fully depreciated assets	(0.2)	(15.5)	(15.7)
Revaluation(1)			-
-effect of downward movement in property valuation	3.5	-	3.5
-effect of upward movement in property valuation	(5.1)	-	(5.1)
At 1 April 2019	29.6	62.9	92.5
Net book value
At 3 April 2017	616.8	72.3	689.1
At 2 April 2018	665.7	77.2	742.9
At 1 April 2019	721.9	85.1	807.0

⁽¹⁾ The group's net book value uplift during the period was £25.2 million (2018: £29.5 million). This uplift was recognised either in the revaluation reserve or the income statement, as appropriate. The impact of the revaluations was as follows:

	2019	2018
	£m	£m
Income statement
Revaluation loss charged as impairment	(3.5)	(1.8)
Reversal of past impairment	3.4	2.1
	(0.1)	0.3
Revaluation reserve
Unrealised revaluation surplus	35.8	34.1
Reversal of past surplus	(10.5)	(4.9)
	25.3	29.2
Net revaluation increase in property	25.2	29.5

IFRS 16: Leases, replacing IAS 17, is effective for the financial period starting 2 April 2019. It removes the distinction between operating and finance leases and will result in most leases being recognised on the balance sheet as a lease liability and a right-of-use asset.  The impact for the period to 30 March 2020 is that EBITDA will increase by between £7.0 million and £9.0 million, adjusted operating profit will increase by between £1.2 million and £1.8 million, adjusted profit before tax will decrease by between £0.7 million and £1.3 million.

At the opening balance sheet date of 2 April 2019, total assets and total liabilities are both expected to increase by between £78.0 million and £82.0 million. This is the result of the introduction of a lease liability and a right-of-use asset.

9. Retirement benefit schemes

Movement in scheme deficits in the period
		2019			2018
		Health			Health
	Pension	care		Pension	care
	scheme	scheme	Total	scheme	scheme	Total
	£m	£m	£m	£m	£m	£m
Changes in the present value of the schemes are as follows:
Opening deficit	(2.4)	(3.7)	(6.1)	(8.8)	(4.0)	(12.8)
Current service costs	(0.3)	-	(0.3)	(0.3)	-	(0.3)
Past service costs	(2.5)	-	(2.5)	-	-	-
Contributions	1.4	0.2	1.6	1.3	0.2	1.5
Other finance charges	-	(0.1)	(0.1)	(0.3)	(0.1)	(0.3)
Remeasurement through OCI	(1.3)	0.1	(1.2)	5.6	0.2	5.8
Closing deficit	(5.1)	(3.5)	(8.6)	(2.4)	(3.7)	(6.1)

10. Net cash generated from operations and analysis of net debt

	2019	2018
	£m	£m
Profit before tax on continuing operations	39.5	37.6
Net finance cost	5.0	5.6
Other finance charges	0.1	0.3
Operating profit on continuing operations	44.6	43.5
Depreciation	23.4	21.1
Amortisation of lease premiums	0.9	0.7
Goodwill impairment	-	0.2
Movement on revaluation of properties	0.1	(0.3)
Profit on sales of property	(0.4)	(0.3)
Loss on disposal	-	0.5
Guaranteed minimum pension equalisation	2.5	-
Difference between pension service cost and cash contributions paid	(1.3)	(1.2)
Movement in other provisions	(0.7)	0.1
Share based payments	0.3	0.6
Movements in working capital
- Inventories	(0.4)	(0.2)
- Receivables	2.4	0.4
- Payables	(2.2)	(3.7)
Net cash generated from operations	69.2	61.4

Analysis of net debt
	2019		2018
	£m		£m
Cash	8.5		7.2
Current borrowings - current borrowings and loan capital	(8.5)		(10.0)
Non-current borrowings - loan capital and finance lease	(163.6)		(137.7)
Net debt	(163.6)		(140.5)

11. Post balance sheet events

There were no post balance sheet events except for completion of a private placement debt facility; after the end of the financial year the group secured additional long-term debt financing through a private placement. This will see the group raise £35 million in July 2019, with Barings receiving senior secured notes at a fixed interest rate of 3.30% for 20 years.

 

END

 

 

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