Yahoo Finance Pub group Young's says business will hit pre-COVID levels by June
Pub chain Young & Co's Brewery (YNGA.L) swung to a loss in 2020 as the hospitality industry was hit hard by lockdown restrictions, but it is hopeful business will return to pre-pandemic levels by next month.
Shares ticked up about 1.6% on Thursday morning.
Young’s fell to a loss before tax of £44.1m ($62.2m) in the year to March 29, down from a profit of £37.7m the year prior. Revenue fell 70% to £90.6m.
The company invested £17m in its properties, which included upgrades to outdoor spaces, adding boutique rooms and relaunching its Burger Shack brand.
Outdoor trading in the 144 pubs that it was able to open on 12 April was "encouraging, achieving 85% of normal trade over a five-week period," the company said in a statement, adding that "we are pleased to have opened all our remaining pubs this week."
CEO Patrick Dardis said: "April has started better than planned, with future bookings also looking strong."
"With this in mind, the board expects the business to get back to pre-COVID-19 levels of trade and margins by the end of June, assuming the roadmap, and in particular the 21 June 'freedom day', is not compromised."
The government is planning to ease restrictions on 21 June, removing "all legal limits on social contact".
The company said it secured additional financing of £88.4m gross proceeds through an equity issue and £20m through a new bank facility to preserve its strong financial position and retain flexibility to invest in future growth.
It's debt at the end of 2020, excluding lease liabilities and arrangement fees, stood at £170.1m.
Read more: Britons to spend £2.5bn as indoor hospitality reopens
Young's board decided not to recommend payment of a final dividend, in light of the impact of the pandemic.
"The board is very mindful of the importance of dividends to Young's shareholders and intends to resume dividend payments as soon as is appropriate, although no decision has been made when that will be," it said.
The pandemic has taken a toll on the hospitality industry but things look to improve as venues began opening up on 17 May.
Output in the hospitality sector, which contributed £59.3bn to the UK economy, roughly 3% of total economic output, slumped in the first quarter of 2020 due the COVID pandemic. It slumped 90% in April 2020 compared with February 2020.
Read more: Pubs say reopening sales are strong after dire six months
Data also showed that by the end of April 2021, just under a third (32.9%) of Britain’s pubs, bars, restaurants and other licensed premises had begun to trade again for the first time since the start of the last national lockdown — a total of just over 35,000 venues.
But a study predicted that 104 million people will head out to pubs, restaurants and cafes between 17 May and 23 May, and expects they will spend up to £2.5bn in this period.
