Yahoo Finance Pub group Young's says 2020 among the toughest in 189 years of trading
The pub chain Young’s (YNGN.L) has faced one of the toughest periods in its 189-year history because of the pandemic, according to its chief executive.
Patrick Dardis, CEO of the pub and hotel group, highlighted the toll of 16 weeks of closure, saying it was “solely” responsible for a £16.9m ($22.2m) operating loss in its first half to 28 September. It had made £28.6m a year earlier.
Its revenues slumped 67.2% to £55m, down from £168.2m a year earlier. The company’s pubs were forced by government coronavirus restrictions between March and 4 July, and Young’s then spent another 16 days putting COVID-19 safety measures in place before re-opening.
With tighter lockdown restrictions now back in place in much of the UK, it sounded the alarm over their impact. It warned its ability to comply with its covenants with lenders from next June was a “material uncertainty.”
“Unfortunately, the typical excitement of the festive period and the opportunities this usually brings us has been replaced with uncertainty,” said Dardis in the statement published on Thursday.
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“At this time, we would usually have 90% of bookings already in the diary; without the prospect of hosting large group get-togethers, corporate Christmas parties and spontaneous festive drinks, the outlook for this December is far from certain.”
But he said government support meant the England lockdown would in fact be “considerably less damaging to our business than the potential move to Tier 3.” It said the furlough scheme would limit its cash burn over four weeks to up to £5m.
“The additional liquidity headroom that we have in place provides us with a degree of security in the face of further extended closure periods or significant reductions in trade due to the pandemic,” added Dardis.
“We are hopeful that when we re-open on 3 December, we will see the back of the 10pm curfew and London moves to Tier 1.”
The company reported some positives over the summer, citing the government’s Eat Out to Help Out scheme and good weather as a “huge boost” to footfall in August. Sales for the month were at 90% of the previous year’s levels, with the UK government subsidising dine-in meals up to £10 a head at restaurants to revive trade in the hospitality sector.
But the location of some of its pubs saw them hit much harder than others. “Much has been written about the impact from the dramatic decline in the numbers of office workers, commuters, and tourists, particularly in central London and the City; our many pubs here have been hit exceptionally hard, with sales only averaging around half the levels of last year.”
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