Young’s have revealed that it has sold nearly all of its tenanted pubs to rival Punch in a £53 million deal.
The London pub group is to keep just seven of 63 sites held by its tenanted division, the Ram Pub Company, which has accounted for around 5% of total Young’s revenues.
The company says it saw “one of the most challenging years” in its 190-year history in 2020, reporting a £45.2 million pre-tax loss for the year to March 29.
Proceeds from the deal will the company added be used to strengthen the company balance sheet. The move will also reduce head office costs.
Having generated EBITDA of £4.7m for the year ended 31 March 2019, the sale of its tenanted pubs will see Young’s retain the remaining seven for the long term.
The London pubco has said that it now plans to target growth through investment in higher turnover managed pubs and hotels, withdrawing from the tenanted model, and will look to acquire predominantly freehold managed pubs following completion of the deal on 9 August 2021.
“Young’s sole focus will now be on operating well-invested and premium managed pubs and hotels,” says Patrick Dardis, chief executive of Young’s. “We have a proven history of making attractive returns from investing in high-quality pubs and this disposal will provide us with additional firepower to upgrade our existing pubs and capitalise on attractive acquisition opportunities that may come to the market.
“During lockdown, we invested a total of £17m in improving the pubs in our managed estate and the purchase of two new pubs: Enderby House in Greenwich and Alban’s Well in St Albans.
“We are delighted to be welcoming back our customers and are already seeing encouraging trading, despite some restrictions remaining. The Board is confident Young’s will emerge from the pandemic in a stronger position and is excited about the future of the business.”