Young’s pubs boss Patrick Dardis: “Smithfields is the new Covent Garden”
Pub company Young’s has announced a deal to buy City favourite Smith’s of Smithfield and its sister site on Cannon Street.
The acquisition was confirmed as the group reported a market-beating rise in sales across its pubs.
The figures
Revenue across managed pubs, which accounts for the biggest chunk of the business, was up 4.6 per cent. Total revenue climbed six per cent to £144.1m.
This was in the 26 weeks to the beginning of October, a period which saw mixed results for UK pubs. In August for example, like-for-like sales fell in London and were sluggishly below inflation elsewhere.
Young’s increased its interim dividend by six per cent to 9.41p.
Pre-tax profits remained flat at £22.1m for the period.
Why it’s interesting
Most Young’s pubs are in London or the south east, so its performance can be a good indicator of the market in the capital.
Following a similar outperformance of the market from peer Marston’s, the update from Young’s today signals better than expected growth for some in the industry.
Young’s already has sites in crucial London locations. Its City pubs include the Lamb Tavern in Leadenhall Market and Dirty Dicks on Bishopsgate.
But today it extended its reach with the acquisition of Smith’s of Smithfield, which chief executive Patrick Dardis told Morning Wire was a chance to take advantage of an up-and-coming area.
“Smithfields is potentially becoming the new Covent Garden,” he said, citing the opening of Crossrail next year and the new Museum of London site in Smithfields Market.
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Analysts at Panmure Gordon nudged up their expectations for the group’s profit due to the acquisition. Equity research analyst Mark Irvine-Fortescue said: “Young’s continues to demonstrate how its premium locations and offering remain resilient in this tough environment, sustaining industry outperformance.”
What Young’s said
Speaking to Morning Wire, CEO Patrick Dardis said that Young’s supports the actions of the Scottish government, which yesterday cleared a Supreme Court hurdle in its attempts to set minimum alcohol prices.
“The market encourages the supermarket to pile the shelves high with cheap alcohol,” he said. “If it reduces the gap between supermarkets and pubs it’s good.”
He added that he would like to see chancellor Philip Hammond reverse beer duty and “nonsense business rates” in the budget next week.
“Pubs are part of our culture and they are so important in communities and as for the chancellor we ask him to wake up and smell the coffee,” he said.
“Businesses are investing less because the government’s got greedy and is using the pub industry as a cash cow.”
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