Yahoo Finance Boss of London pub group Young’s warns the price of a pint is set to rise
Young's has swung back to profit after seeing sales return to 2019 levels, but the pub group's CEO today warned that the price of a pint is set to rise.
Patrick Dardis told the Standard the 189-year-old pubco, behind venues including the City's Lamb Tavern and the new Windmill in Clapham, is "back in action".
Young's revenues were down just 1% on 2019 levels in the half year to September 27, and topped them by 8% in the past 12 weeks.
The company, which saw a £45.2 million 2020 pre-tax loss, today reported a half-year pre-tax profit of £22.2 million and reinstated its dividend.
Trade is "absolutely flying" in towns and in London suburbs, but still 12% down on pre-Covid levels in the City and West End as hybrid working hits trade on Mondays and Fridays.
Dardis said the staffing crisis is "definitely easing" and that the pubco, which recently sold the bulk of its Ram's tenanted division, is now looking to acquire new sites.
He said: "We're back, we're very positive, we're going to invest and we're looking to acquire. We're going to kickstart our Capex program aggressively in the last quarter, and we're going to be investing more in our estate next year. It will be the biggest investment we have made in our current estate ever.
"We've got the funds, the strength of balance sheet, and we are going to grow."
In bad news for customers, Dardis said inflating wage bills, rising input costs and a return to 20% VAT will mean the "price of a pint will definitely have to go up" next year, probably by April. The pubco is not planning to put up prices before Christmas.
It comes after City Pubs chairman Clive Watson warned the price of a pint may have to rise by 25-30p. That will more than offset a 3p-off-a-pint cut to beer duty announced in the Chancellor's recent Budget.
Dardis said the cut would "never reach the pub anyway" due to so many other costs rising.
Last month Watson told the BBC's Radio 4 Program: "We cannot absorb all these increased costs whether it is the energy costs, whether it is food inflation, whether it is labour costs. So the only way forward for us is to put the price of beer and food up in our pubs.
"No one wants to do that but I reckon the price of beer would probably have to go up 25p to 30p a pint to take account of all these increased costs."
Like fellow operator Wetherspoons, which yesterday reported seeing cocktail and vodka sales soar while stouts fall as the average age of its customers falls, Dardis said drinking habits are also changing at his pub chain.
The pubs veteran said that as younger drinkers return to pubs in droves and older drinkers continue to stay away, Young's cocktail sales are up over 100% year-on-year.
Young's shares rose by 2.7% on Thursday morning on the update.
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