AN N UAL RE PORT 2013
Our strategy is clear: we are focused on
developing and growing an estate of premium
pubs, primarily in London and the south east,
with a clear emphasis on managed operations.
We will continue to invest to maintain our
premium position. We are looking to acquire
further managed houses, either packages or
individual sites, to increase the size of both our
Young’s and Geronimo operations.
CONTENTS
Independent auditor’s report
Chairman’s statement
Chief Executive’s report
3
5
13 The board of directors
14 Directors’ report
21
22 Group income statement
23 Statements of comprehensive income
24 Balance sheets
25 Statements of cash flow
26 Group statement of changes in equity
Parent company statement of changes in equity
27
28 Notes to the financial statements
57 Notice of meeting
61 Explanatory notes to the notice of meeting
62 Five year review
63 Senior personnel, committees and advisers
63 Shareholder information
64 Young’s pubs and hotels
FI NANCIAL H IGH LIGHTS
2013
£000
2012
£000
%
CHANGE
REV ENUE
193,677
178,964
+8.2
ADJUSTED OPERATING PROFIT*
28,935
26,162
+10.6
OPERATING PROFIT/(LOSS)**
27,126
(2,665)
ADJUSTED PROFIT BEFORE TAX*
24,128
21,333
+13.1
PROFIT/(LOSS) BEFORE TAX**
22,319
(7,494)
ADJUSTED BASIC EARNINGS PER SHARE* 37.77p
33.41p
+13.0
BASIC EARNINGS PER SHARE
35.23p
(11.13)p
DIVIDEND PER SHARE
(interim and recommended final)
14.63p
13.93p
+5.0
NET ASSETS PER SHARE***
£6.94
£6.59
+5.3
All of the results above are from continuing operations.
* Reference to an “adjusted” item means that item has been adjusted to exclude exceptional items (see note 9).
** In the prior period the group changed its policy on valuing property and equipment from the cost model to the revaluation
model. This gave rise to a net uplift in the value of property and equipment of £174.0 million. An upward movement of
£203.1 million was recognised in equity, while a downward movement of £29.1 million was taken to the income statement
resulting in the prior period loss before tax.
*** Net assets per share are the group’s net assets divided by the shares in issue at the period end.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 1
2 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
CHAI RMAN’S STATEM ENT
I AM PLEASED TO B E AB LE TO
REPORT ON ANOTH ER VERY
POSITIVE AN D SUCCESSFU L
YEAR FOR YOU NG’S.
After a number of years of significant
change, our focus for the past 12
months has been on achieving
profitable growth from an expanding
estate of premium managed houses,
and on maximising returns, both for
us and for our tenants, from a smaller
tenanted estate. The financial results
demonstrate our clear success. Against
a challenging backdrop, revenue
for the year rose 8.2% to £193.7
million, adjusted profit before tax
was up 13.1% at £24.1 million and
adjusted basic earnings per share
increased 13.0% to 37.77 pence. This
performance was built on strong like-
for-like performances from both the
Young’s and the Geronimo managed
estates. While we continue to invest
heavily in our estate, the group’s
balance sheet remains robust with
a further reduction in net debt to
£112.6 million at the year end. This
positions us well to invest in further
growth opportunities.
On 2 April 2013 two important Board
changes took place to enact a smooth
and effective succession plan for the
management of Geronimo. Rupert
Clevely, previously an executive
director and Managing Director,
Geronimo, moved to a non-executive
role, and Ed Turner was appointed to
the Board as an executive director,
succeeding Rupert as Geronimo’s
Managing Director. Rupert founded
Geronimo in 1995 and joined our
Board when we acquired the business
in 2010. Ed joined Geronimo in 1999,
served as its Commercial Director
for a number of years, and became
Commercial Director of Young’s in
2011. I am pleased that Ed has joined
the Board, and thank Rupert for the
excellent job he has done in leading
Geronimo during its integration with
Young’s. I am delighted that he will
continue to contribute his experience
in a non-executive capacity.
In his review, Stephen Goodyear,
Chief Executive, reports on a strong
start to the current financial year, with
managed house revenue in the first
seven weeks up 14.7% in total and
10.6% on a like-for-like basis. The year
as a whole will continue to benefit from
recent pub acquisitions and from our
continuing investment in the existing
estate – both pubs and hotels. Overall,
consumer demand remains subdued. It
was therefore encouraging to see, in the
March budget, the Chancellor’s decision
to reduce the tax burden slightly on
the beer industry, and his subsequent
assertion that this was not the last word
from the Government in supporting the
pub sector. We will be watching closely
to see that these welcome words are
backed by further action.
We remain committed to a progressive
dividend policy. In light of our
strong trading performance and
sound financial position, the Board
is recommending a final dividend of
7.61 pence per share, a 5.0% increase,
resulting in a total dividend for the year
of 14.63 pence (2012: 13.93 pence).
This final dividend, if approved, is
expected to be paid on 11 July 2013
to shareholders on the register at the
close of business on 7 June 2013. This
would be the sixteenth consecutive
year of dividend growth.
A great many people play a part
in Young’s success, not least our
customers, the teams in our pubs, our
operational staff, my Board colleagues,
and, of course, our shareholders. All
deserve my sincere thanks for their
continued support.
As always, my colleagues and I look
forward to welcoming shareholders at
our Annual General Meeting, to be
held on 9 July 2013 in the Civic Suite of
Wandsworth Town Hall, London SW18.
N I C H O L AS B RYAN
Chairman
22 May 2013
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 3
Nicholas Bryan
Chairman
ADJ USTED BASIC EARN I NGS PER
SHARE (PENCE)
37.77
+13.0%
37.77
33.41
32.65
28.71
2010
2011
2012
2013
DIVIDEND PER SHARE
(RECOMMENDED) (P E N C E)
14.63
13.93
13.00
13.26
+5.0%
14.63
2010
2011
2012
2013
“ PI NT I N
HAN D ALREADY
#S EEYOUATTH EBAR”
4 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
CH I EF EXECUTIVE’S REPORT
OVERVI EW
The summer of 2012, representing
the first half of our financial year, was
dominated in the public consciousness
by the unique events in London – the
Diamond Jubilee and the Olympic and
Paralympic Games. Whilst tempered by
some decidedly unseasonal weather,
our like-for-like performance over
that period saw some benefit from
these events. In the second half,
when London returned to normal, we
delivered further like-for-like growth;
this was at a slightly lower rate but
still very pleasing as it was achieved
against the backdrop of a very strong
performance in the comparative period.
Throughout the year our focus has
been on driving superior performance
across our estate, week in week out,
whatever the external forces at play.
The strong revenue and profit growth
that we have generated are a clear
reflection of our success in this regard.
Revenue increased by 8.2% to
£193.7 million, with strong like-for-like
managed house growth across both
Young’s and Geronimo. Adjusted
operating profit increased 10.6% to
£28.9 million. Adjusted profit before
tax was up 13.1% at £24.1 million
and adjusted basic earnings per share
increased 13.0% to 37.77 pence.
Our strategy is unchanged: we are
focused on developing and growing
an estate of premium pubs, primarily
in London and the south east,
with a clear emphasis on managed
operations. We run pubs as opposed
to restaurants and believe ours are
well balanced providing our customers
with an exciting choice of both food
and drink. We will continue to invest
in the existing estate to maintain our
premium positioning and to grow
our hotel business. We are looking
to acquire further managed houses,
either as packages or individual sites, to
increase the size of both the Young’s
and Geronimo operations.
We remain soundly financed and asset
backed. During the year we opened
five new managed pubs including one
transfer from tenancy. We also made
seven disposals from our tenanted
estate and decided not to renew two
further leaseholds. At the period end
therefore we operated an estate of 237
pubs of which 197 were either freehold
or long leases on peppercorn rents.
The business again generated a strong
operating cash flow of £35.1 million.
This, together with the proceeds from
disposals and the second instalment
from the sale of our stake in Wells
& Young’s, allowed us to invest £20.5
million whilst still reducing net debt by
£5.5 million. Our balance sheet remains
strong with net debt at £112.6 million;
this represents 2.8 times EBITDA of
£40.6 million, and gearing of 33.6%.
As always, our success is in large
part due to the unstinting efforts and
commitment of our colleagues across
the group – our senior management,
our operations team and those who
look after our customers every day.
My board colleagues and I are very
grateful to them all.
B U S I N E S S R EVI EW
MANAGED OPERATION
Our managed operation, which
comprises 125 Young’s managed
houses (including 18 hotels) and 34
Geronimo pubs, increased revenue by
10.0% to £181.6 million, representing
93.7% of group revenue. Managed
house operating profit before
exceptional items was up 12.2% at
£39.6 million. Our 146 like-for-like pubs
increased sales by 4.6% and generated,
on average, sales of £1.1 million and
EBITDA of £327,000 per pub.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 5
Stephen Goodyear
Chief Executive
REVEN U E
(£000)
193,677
142,597
127,539
+8.2%
193,677
178,964
2010
2011
2012
2013
ADJ USTED OPERATI NG PROFIT
(£000)
28,935
20,307
21,746
+10.6%
28,935
26,162
2010
2011
2012
2013
ADJ USTED PROFIT B EFORE TAX
(£000)
24,128
+13.1%
19,423
20,819
21,333
24,128
2010
2011
2012
2013
CH I EF EXECUTIVE’S REPORT (CONTINUED)
Young’s managed operation revenue
was up 7.0%, with like-for-like growth
of 5.0%. Total revenue benefited
from a number of key factors; the
Plough (Clapham Junction) and the
Shaftesbury (Richmond), having
been transferred from our tenanted
operation in the previous year; the
more recent additions of the King’s
Head (Roehampton), the Cutty Sark
(Greenwich) and the Narrow Boat
(Islington); and from the runaway
success of the recently re-opened
Wheatsheaf (Borough Market). The
impact of the poor weather that
plagued the year was partly offset by
strong trading at many sites during
the London events of summer 2012.
Our riverside pubs performed strongly
over the Jubilee weekend and sites
such as the Dial Arch (Woolwich),
our Wimbledon pubs and those close
to transport hubs all benefited from
Olympic crowds.
Geronimo grew its revenue by 19.2%,
driven by six extra sites and like-for-like
growth of 3.1%. The Oyster Shed (on
the Embankment near Cannon Street)
and the Cow and the Calf (both in the
Westfield Shopping Centre in Stratford)
were recent additions whilst the Half
Moon (Putney), Chelsea Ram and
the Princess of Wales (Clapton) had
been transferred from our tenanted
operation. Situated next to the Olympic
Park, the Cow and the Calf shattered
all our previous group sales records
in the second week of the Games.
The Calf was a temporary site which
closed just after Christmas, and sales at
the Cow, as expected, have returned
to more normal patterns. The rate of
Geronimo’s overall sales growth has
reduced as a consequence.
Like-for-like drink sales were up 3.2%,
reflecting growth in both Young’s
and Geronimo. Our focus remains
resolutely on a premium portfolio
of products and this has proven to
be very successful with customers
continuing to trade up. Interest in
craft beers is growing strongly and
we have introduced separate cocktail
bar concepts with a “Speakeasy” feel
at two of our pubs – Smith’s at the
Brook Green Hotel (Hammersmith)
and Old Mary’s at the Mitre (Lancaster
Gate). Both are proving very popular
and we see potential for further such
developments at other sites.
Food generated 7.6% like-for-like
growth driven by quality, menu
content and service initiatives. Food
accounted for 29.8% of total revenue
in the period (2012: 29.1%).
Hotel accommodation remains an
important part of our growth strategy.
At the year end we had 397 rooms
in total, having added ten at the
Bull’s Head (Chislehurst) and 17 at
the Foley (Claygate) during the year.
Accommodation sales have benefited
from recent investment, successful
online marketing and booking
simplicity. Sales were up 5.5% in total
and RevPAR (revenue per available
room) continues to improve and stands
at £49.26, up 0.9% on last year and
up from £38.62 three years ago.
Further sales growth is anticipated next
year with the full benefit of the recent
investments at the Bull’s Head and the
Foley coming through. In addition, we
are, subject to planning, to develop 16
rooms at the Dog & Fox (Wimbledon).
We continue to invest as we strive for
excellence at every level – location,
ambience and design, product portfolio
and service. Despite little or no let up
in the depressed economic climate,
where some of our competitors
may have chosen to invest less in
their estate we have continued to
invest more and where they may
have reduced service levels we have
increased them. In doing so we
continue to widen our differentiation.
We invested £19.4 million in our
managed houses – £16.5 million in
Young’s sites (of which £4.3 million
was on hotels) and £2.9 million within
Geronimo. We acquired the Cutty
Sark (Greenwich) and the Narrow Boat
(Islington). The two largest projects
in our existing estate were the hotel
development at the Foley (Claygate)
and the redevelopment of the King’s
Head (Roehampton). Other major
investments were made at the Albert
(Kingston), Betjeman Arms (St Pancras),
Chelsea Ram, Clock House (Peckham
Rye), Coach & Horses (Kew), Duke’s
Head (Wallington), Grove (Balham),
Marquess of Anglesey (Covent Garden),
Princess of Wales (Clapton), Phoenix
(Westminster), Shaftesbury (Richmond),
Ship (Wandsworth), Thatched House
(Hammersmith), Waterside (Fulham)
and the Wheatsheaf (Borough Market).
In all cases, we applied a creative,
innovative and individual design that is
the hallmark of our work in developing
the modern pub without losing its time
honoured appeal.
The major developments undertaken
in the year to March 2012, which
have now completed their first full
year post development generated a
20.1% return on investment based on
increases in EBITDA.
We have increased the number of
operations managers; reducing the
ratio of pubs to operations manager
6 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 7
“O U R F O O D O F F E R
R E F LE CTS O U R
E M P HAS I S O N H I G H
Q UALIT Y S EAS O NA L
B R ITI S H F O O D, LO CALLY
S O U RC E D AN D
P R E PAR E D I N-H O U S E .”
8 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
CH I EF EXECUTIVE’S REPORT (CONTINUED)
increases their ability to work more
proactively and creatively with their
customer-facing retail teams. We
have introduced a charter committing
to all our retail staff that we will
champion their cause through better
communication, better training and
development opportunities and faster
response times to their needs. We are
also increasing our focus on measuring
service levels through mystery
customer visits, doubling the number
of annual visits to eight per pub. The
outcome of these visits has a direct
impact on the bonus the pub manager
earns and results in a more committed
team who deliver the best in customer
service and a marked increase in
productivity per pub.
Social media is a cornerstone of our
marketing strategy. Our e-marketing
databases have now surpassed
500,000 individual addresses, and
with a growing number of Facebook
fans and Twitter followers, more and
more of our customers are using their
mobiles to search out and book places
to eat, drink and stay online. Over
30% of our five million website hits
originate from hand held devices. As
a consequence we continue to exploit
our digital presence for mobile and
tablet access which will further increase
our ability to reach local communities
and build loyalty and footfall.
Our food offer reflects our emphasis
on high quality seasonal British food,
locally sourced and prepared in-
house. Successful butchery, fish and
game master classes have been run
in many pubs and proved popular
with customers who are increasingly
interested in learning more about their
food and its provenance, especially
at a time of heightened consumer
awareness. We also hosted special
events in our Clubrooms – fish filleting,
preparing a whole pig and an offal
dinner were all available to reinforce
further the diversity and quality of our
food offer.
Beer and food matching dinners have
also proved popular, with London
seeing a strong resurgence in cask
and craft beers. Wells & Young’s
beers remain at the heart of all of our
pubs and London craft beers from
the Meantime Brewery and Camden
Brewery have been successfully
introduced alongside them to ensure
that discerning drinkers are offered
their artisanal beers of choice.
Private hire and events have been major
profit drivers over the past year. We
are liaising with local businesses and
creating bespoke occasions throughout
the week to cater for an ever-increasing
circle of customers in our communities,
from Mums and Toddler groups to
yoga sessions. Movie nights showing
the latest releases have also gone down
well. Free films and popcorn at the
Grove (Balham) and Lord Palmerston
(Tufnell Park) have helped drive custom
whilst offering residents a cinema on
their doorstep, reinforcing the role of
the pub at the heart of its community.
Pub quizzes are enjoying a strong
revival, bringing customers in on quieter
nights and once again reinforcing the
community element of what we do best.
The weekly Tuesday “Adventure Quiz”
at the Hollywood Arms (Chelsea) was
recently voted one of London’s top five
pub quizzes by the Evening Standard.
Each year we acknowledge the talent that
we have within our managed operations
through an annual awards ceremony.
This year’s winners, for the second
year running, were Mick and Sarah
Dore at the Alexandra (Wimbledon), a
remarkable achievement bearing in mind
the intense competition.
TENANTED OPERATION
Our tenanted strategy is to reposition
our estate by focussing on fewer
but better quality and well invested
tenanted pubs. We have reduced the
estate from 97 to 78 over the past
two years. We sold 13 tenanted pubs,
generating proceeds of £8.8 million
and an exceptional profit of £2.2
million; this includes the seven pubs
we have sold this year. In addition, our
leases expired on two further sites and
we transferred the Princess of Wales
(Clapton) to our Geronimo operation.
This smaller estate generated 6.0% of
group revenue in the year. As a result,
revenue in our tenanted division was
down 2.4% on a like-for-like basis
and in total down 14.3% to £11.6
million. Total operating profit before
exceptional items reduced by 2.6% on
a like-for-like basis and by 19.7% to
£4.2 million in total. The remaining 78
pubs generated an average EBITDA
per outlet of £68,000.
Since the year end we have transferred
the Marquess Tavern (Islington) and
the Three Lords (the Minories in
the City) to our Young’s managed
operations, and over the coming
weeks the Bull’s Head (Barnes) is set to
become Geronimo’s third high profile
music venue following its successes
with the Elgin (Notting Hill) and the
Half Moon (Putney).
We are investing in the retained
tenanted estate; £1.0 million was spent
last year and a further £1.4 million is
scheduled for this year. We continue to
promote the traditional tenancy model,
focussing on packages offering a three
or five year agreement with the tenant
having limited responsibility for repairs
and decoration. Young’s approach to
its tenants has always been based on
a strong partnership principle and we
operate a legally binding code which
is constantly being updated to meet
the latest requirements of the UK pub
industry framework code of practice.
As a consequence we believe that the
Government’s latest consultation is
unlikely to have a material impact on
our tenanted operations.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 9
CH I EF EXECUTIVE’S REPORT (CONTINUED)
In November 2012 Andrew Cox joined
Young’s as Director of Property and
Tenancies and assumed responsibility
for the tenanted operation. A member
of the Royal Institution of Chartered
Surveyors, he brings 29 years of
experience from Mitchells & Butlers
to his new role. Under Andrew’s
leadership and with the estate now
largely restructured, the focus is
on working to drive attractive and
sustainable returns both for our tenants
and for Young’s.
I NVE STM E NT AN D
F I NAN C E
Revenue rose by 8.2%, benefiting from
recent acquisitions and underpinned
by 4.6% like-for-like growth within the
managed estate.
Our managed estate now accounts for
over 93.7% of group revenue, up from
89.6% just two years ago. Operating
margin was 14.9%, an increase of
0.3%pts since last year.
Net interest costs of £4.8 million
were unchanged compared with last
year, as we again benefited from a
pension interest credit of £0.5 million
(2012: £0.8 million) and a £0.5 million
credit (2012: £0.5 million) relating
to the unwinding of the discount
applied to the sale proceeds from our
shareholding in Wells & Young’s in
August 2011.
exceptional items (see note 9) was
£24.1 million, up 13.1% on last year.
The £5.9 million tax charge (excluding
exceptional tax) on this equates to
an effective tax rate of 24.3% (2012:
24.6%). The adjusted basic earnings per
share increased by 13.0% to 37.77p.
£100 million of this debt has been
effectively fixed at below 5.0%, with
none needing to be refinanced until
December 2015. Interest costs were
covered 4.9 times by operating profits
and net debt was a 2.8 times multiple
of EBITDA of £40.6 million.
At the year end there was an
IAS 19 pension deficit of £8.8
million (2012: £8.3 million). This
small increase in deficit was the result
of the lower discount rate applied to
the scheme liabilities, offsetting strong
investment returns achieved from the
scheme’s assets. Total cash contributions
were £2.7 million for both past and
current service. This scheme has
been closed to new entrants since
February 2003.
Net assets per share are £6.94
(2012: £6.59) after taking account
of deferred tax and £8.00 (2012: £7.71)
if excluded.
In January this year CBRE, an
independent and leading commercial
property and real estate services
adviser, revalued 20% of our estate.
As permitted by IAS 16 and in
common with other listed pub groups
a revaluation of the remaining 80%
of the pub estate was undertaken
internally, led by Andrew Cox, the
Director of Property and Tenancies,
using updated trading results,
management’s knowledge of each
pub and applying the results of the
external valuation. This revaluation
has resulted in a total property value of
£515.9 million (2012: £502.0 million),
driven by a net upward revaluation
of £7.6 million and additions of
£20.5 million offset by depreciation
of £11.7 million and disposals of
£2.5 million. As in the previous year
and in accordance with IFRS, individual
increases in value have been reflected
in the revaluation reserve in the
balance sheet (except to the extent
that they had previously been revalued
downwards) and individual falls in
value below cost have been accounted
for through the income statement.
Net cash flow from operating
activities was £35.1 million reflecting
robust trading. We invested a total
of £20.5 million, part funded by
the disposal of seven tenanted pubs
for £4.2 million. In addition, the
second £5.0 million instalment of
the consideration due from the sale
of our interest in Wells & Young’s
was received from Charles Wells in
February, with the final £5.0 million
instalment falling due in February 2014.
Total profit before tax for the year was
£22.3 million and once adjusted for
Net debt at the period end was
£112.6 million, down £5.5 million.
10 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
C U R R E NT TR AD I N G
AN D O UTLO O K
Trading since the period end has been
strong. Managed house revenue in the
first seven weeks of the new financial
year was up 14.7% in total and 10.6%
on a like-for-like basis, albeit the
comparative period a year ago was
affected by some truly dismal weather.
Over a thirteen week period, which
gives a more rounded picture, like-for-
like trade was up 3.7%.
Looking at the current year as a whole,
whilst we obviously will not enjoy
a repeat of the exceptional London
events of last summer, it is difficult to
believe the weather can be as bad.
We will see a full year’s benefit of two
recent acquisitions, the Cutty Sark
(Greenwich) and the Narrow Boat
(Islington). There’s also the recently
reopened Foley (Claygate), following
its transformation into a beautiful
17 bedroom hotel, the King’s Head
(Roehampton) and the Wheatsheaf
(Borough Market) which re-opened in
December after a lengthy closure and
which is proving a huge success.
Since the year end we acquired the
Bull & Gate (Kentish Town) for Young’s
and we remain active in looking for
other sensibly priced opportunities,
either in the form of individual pubs
or packages.
A new and refreshing corporate
identity is being introduced. This will be
progressively incorporated in our pub
signage, ale brands and other materials.
It is a confident, contemporary brand
image which reinforces our premium
positioning whilst importantly retaining
the famous ram to acknowledge our
history and heritage.
We were very pleased to see the
Government’s decision, announced
in the March Budget, to reduce the
general beer duty rate and to scrap
the duty escalator from 2014. The
Chancellor of the Exchequer, George
Osborne, has since stated publicly
that he saw these moves as being just
the beginning of greater Government
support for the pub sector and we look
forward to the Government fulfilling
this important commitment.
We remain as focused as ever on
driving profitable growth through the
proactive management of our well
invested and predominantly managed
estate. Our premium offer continues
to prove attractive despite the
continued caution on the part of the
UK consumer. With the quality of our
estate, the talent within the business
and our balance sheet strength, we
believe that Young’s remains in a
strong position to continue to grow
and deliver value to our shareholders.
STE P H E N G O O DYEAR
Chief Executive
22 May 2013
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 11
12 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
TH E BOARD OF DI RECTORS
N ICHOLAS B RYAN, B.A. , F.C.A.
NON-EXECUTIVE CHAIRMAN
Appointed to the board in 2006 and as non-
executive chairman in 2011. Member and
chairman of the company’s audit committee as
well as a member of the company’s remuneration
committee. Co-founder and chief executive of the
Innserve Group. Has particular expertise in the
hospitality, property and brewing sectors gained
through various positions within Courage (including
managing director of Courage UK (1992-95)). Has
held other chairman and non-executive director
roles while a management committee member of
Investcorp (1995-2001). Began his career in finance
as a chartered accountant and with positions at
Lonrho and Hanson. Aged 60.
STEPHEN GOODYEAR
CHIEF EXECUTIVE
Joined in 1995 as sales director. Appointed to the
board in 1996 as sales and marketing director.
Appointed chief executive in 2003. Previously
worked for Courage Ltd (1974-95) in a number of
senior roles. Aged 57.
TORQUIL SLIGO-YOUNG
HUMAN AND INFORMATION
RESOURCES
Joined in 1985. Held a number of senior positions
in different areas of the company before being
appointed to the board in 1997. Has overall
responsibility for personnel, health and safety and
the group’s technological needs. Previously worked
for stockbrokers Bell, Lawrie, Macgregor & Co.
Aged 53.
PATRICK DARDIS
RETAI L
Joined in 2002 and appointed to the board in
2003. Has overall responsibility for the operation
of the Young’s managed estate as well as for
Young’s managed house pub acquisitions and
developments. Previous positions have included
director of retail operations at Wolverhampton &
Dudley PLC, business development with Guinness
Brewing and retail management with Whitbread
PLC and Courage Ltd. Aged 54.
EDWARD TU RN ER
MANAGING DIRECTOR GERONIMO INNS
Joined in 2010 and appointed to the board in
April 2013. Has overall responsibility for Geronimo
Inns, including strategy and pub acquisitions and
developments within the Geronimo estate. Also
responsible for marketing and for learning and
development in all of the group’s managed pubs.
Joined Geronimo in 1999, becoming Operations
Director that year, and then held the position of
Commercial Director for a number of years before
Geronimo was acquired by Young’s. Previously
in retail management with Mitchells & Butlers
(1989–99). Aged 45.
PETER WH ITEH EAD, F.C.A.
FI NANCE
Joined the company and the board as finance
director in 1997. Qualified as a chartered
accountant with KPMG in 1988, becoming a fellow
of the Institute of Chartered Accountants in 1998.
Previously worked for Fuller, Smith & Turner P.L.C.
(1990-97). Aged 51.
ROGER LAM B ERT, M.A.
NON-EXECUTIVE AND SENIOR
INDEPENDENT DIRECTOR
Appointed to the board in 2008 and as senior
independent director in 2011. Member of the
company’s audit and remuneration committees.
Chairman of Corporate Broking and Joint
Deputy Head of European Investment Banking,
Canaccord Genuity. Previously worked for 26
years in corporate finance at JPMorgan Cazenove
where he was a senior managing director with
responsibilities for corporate client coverage of
the consumer sector. Has a wealth of relevant
expertise in brewing, drinks and hospitality,
having acted for over 25 companies in the sector.
Was involved in many of the major transactions
that changed the industry in recent years and
developed considerable advisory expertise in
the area of small, family and medium sized
companies. Aged 54.
DAVI D PAGE
NON-EXECUTIVE
Appointed to the board in 2008 and as chairman of
the company’s remuneration committee in 2011. Also
a member of the company’s audit committee. His
current restaurant portfolio includes Rocca, Franco
Manca, Bukowski and The Real Greek. Co-founder
and chairman of The Clapham House Group, owner
of Gourmet Burger Kitchen and other restaurant
brands. Prior to founding Clapham House, he spent
27 years with Pizza Express. He owned and ran the
largest franchisee organisation, G&F Group, for 18
years and became chief executive of the holding
company on its flotation in 1993. He was elevated to
chairman in 1998 and returned to the post of chief
executive in 2002. He is chairman of Fulham Shore
plc, a quoted ISDX growth company, which is to be
a restaurant consolidator. Aged 60.
RU PERT CLEVELY
NON-EXECUTIVE
Joined the company and the board in 2010. Retired
from his executive position and became non-
executive in April 2013. As an executive director,
had overall responsibility for the management and
development strategy of Geronimo Inns which
he co-founded. Previous to this, worked at Veuve
Clicquot Champagne where he held the position
of worldwide marketing director and managing
director UK (1990-2000). Aged 55.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 13
DI RECTORS’ REPORT
The directors present their annual
report, and the audited financial
statements, for the financial period
ended 1 April 2013.
In this report reference to the
“company” or to “Young’s” is to
Young & Co.’s Brewery, P.L.C., and
reference to the “group” is to the
group of companies of which Young’s
is the parent company.
The Chairman’s statement (on page
3) and the Chief Executive’s report
(on pages 5 to 11) both form part of
this report.
P R I N C I PAL ACTIVITI E S
The group’s principal activities are
described in the Chief Executive’s report.
B U S I N E S S R EVI EW
A review of the group’s business is
contained in the Chairman’s statement
and in the Chief Executive’s report.
K EY P E R F O R MAN C E
I N D I CATO RS
The board measures the
development, performance and
position of the group’s business by
reference to the following factors:
• ADJUSTED PROFIT
BEFORE TAX
This is the profit before tax on
continuing operations only,
adjusted to exclude any exceptional
items for the group. See note 10.
• ADJ USTED EARN I NGS
PER SHARE
This is the adjusted profit before
tax detailed above, but after tax
has been deducted, divided by
the weighted average number of
ordinary shares in issue; it provides
a useful statistic to compare with
a share price or dividend, for
instance. See note 16.
• LI KE-FOR-LI KE REVEN U E
This is same outlet like-for-like
revenue growth for this period
compared with the last period for
the pubs and hotels that traded
throughout both periods.
• REVPAR
This is the group’s revenue per
available bedroom; it is the average
room rate achieved multiplied by
the occupancy percentage.
• EB ITDA
This is the adjusted earnings before
interest, taxes, depreciation and
amortisation by business segment.
• I NTEREST COVER
This is the group’s adjusted
operating profit divided by the
finance costs.
• GEARI NG
This is the group’s net debt divided
by the group’s net assets.
Both interest cover and gearing are
useful tools in determining whether
the business can maintain its current
level of debt or its capacity to increase
that level.
The performance of the business,
measured by reference to these factors,
is shown in the Chief Executive’s
report and in the financial highlights
on page 1.
P RO F IT AN D D IVI D E N D S
The profit for the period attributable
to shareholders was £17.0 million. The
directors recommend a final dividend
for the period of 7.61p per share.
Subject to approval at the AGM, this
is expected to be paid on 11 July 2013
to shareholders on the register at the
close of business on 7 June 2013.
When added to the interim dividend
of 7.02p per share, this will produce a
total dividend for the period of 14.63p
per share.
AN N UAL G E N E R AL
M E ETI N G
Notice convening the AGM and an
explanation of the resolutions being
proposed are set out on pages 57
to 61.
I M P O RTANT EVE NTS
S I N C E TH E E N D O F TH E
P E R I O D
The Chief Executive’s report contains
particulars of important events affecting
the group which have occurred since
the end of the period.
LI K E LY F UTU R E
D EVE LO P M E NTS
An indication of likely future
developments in the group’s business
is contained in the Chief Executive’s
report.
P R I N C I PAL R I S KS AN D
U N C E RTAI NTI E S
The principal risks and uncertainties
facing the group are listed below. It is
not an exhaustive list of all significant
risks and uncertainties. Some risks
may currently be unknown and other
risks currently regarded as immaterial
could turn out to be material.
• REDUCED CONSU M ER
SPEN DI NG
The group’s revenue is largely
dependent on consumer spending
which can be affected in numerous
ways; examples include the
general economic environment
and terrorist activity. Attitudes to
various social factors are relevant
too, as is consumers’ heightened
awareness of a healthy lifestyle
and the potential adverse health
consequences associated with
misuse of alcohol. Consumers
also have a wide range of choice
of where to spend their money,
whether this is at the group’s
pubs and hotels, at those of its
competitors or at off licences,
14 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
supermarkets and takeaways, or
at competing leisure attractions
such as cinemas. Focusing on
the individuality of each of the
group’s outlets and being located
throughout London and southern
England helps mitigate this risk
to a degree; the group also seeks
to minimise this risk further with
its customer focused designs,
high service standards and quality
food and market leading drinks.
Spending in the group’s pubs
and hotels is also affected by the
weather; traditionally they tend
to be busier in the summer and
on warm, sunny days, especially
those with outside areas. Holiday
periods such as Christmas, New
Year and bank holidays also tend
to be better for trade. Recognising
this, the group seeks to exploit its
excellent locations and offerings to
address the impact of seasonality,
wherever possible, by capturing
demand in busy periods and
encouraging customers to visit in
quieter periods.
• SU PPLI ERS: DRI N K, FOOD
AN D UTI LITI ES
The group relies on a number of
suppliers for drink, food and other
services to its pubs and hotels.
Part of the group has an exclusive
agreement with its former associate,
Wells & Young’s, for the supply of
drinks to its pub estate. The group
also has a number of arrangements
with food suppliers, including its
former majority owned subsidiary,
Sticky Fingers Food Limited. In
terms of both food and drink the
group remains exposed to the risk
of price increases and to the risk of
interruption or failure of suppliers
resulting in products not being
delivered on time or to the standard
expected. It attempts to mitigate
this risk by entering into fixed
price arrangements, by regularly
reviewing the suppliers it uses, by
having informal arrangements in
place such that substitute suppliers or
products could be used if required
and by having safety measures in
place which seek to ensure product
integrity is maintained wherever
possible. The group uses a large
amount of electricity and gas and
is therefore particularly subject to
fluctuations in their cost. To help
counter this the group’s needs
and price changes in the market
are reviewed regularly and, where
appropriate, it makes forward
purchases; it is also continually
looking at ways of promoting further
efficiencies in energy consumption.
• LICENSI NG
If they believe that any of the
Government’s licensing objectives is
being compromised, local residents,
the police and other relevant
agencies can ask the local authority
to review a premises licence; local
health bodies can also instigate a
review. This could result in a range
of possible outcomes, including
further conditions being attached
to a licence, trading hours being
reduced, a change in the pub’s
management being called for or
ultimately a licence being suspended
or revoked. Penalties for non
observance of certain aspects of the
licensing laws can also be severe and
include the possibility of a licence
being suspended. The group has
training programmes in place which
have been designed to achieve
compliance with these laws and to
have the group’s pubs and hotels
run in a responsible manner thereby
minimising some of these risks.
• OTH ER REGU LATION
Changes in regulation can have
a significant impact upon the
group’s business. In addition to
those already mentioned, other
examples include increases in the
minimum wage and proposed
improvements in glass safety. The
group seeks to mitigate these
through continual consideration
of operating procedures to ensure
any cost increases arising from
such changes can be mitigated
through increases in productivity.
As a member of the British Beer
and Pub Association (“BBPA”) it also
seeks to ensure that the impact of
any new legislation is considered
well in advance of its introduction
and that plans are put in place to
address any required changes in
advance of any implementation
date. In addition it works with an
outside third party in ensuring
changes in health and safety
practices and procedures are
incorporated into the business and
reviewed on a regular basis.
• TAXATION
A number of tax related matters
affect the group, including business
taxes, duty on alcoholic beverages
and property rates. Again, as a
member of the BBPA, the group
seeks to ensure that appropriate
action is taken to minimise tax
related risks. It also regularly
reviews its operating procedures to
identify ways in which the impact
of tax related cost increases can
be lessened through productivity
increases and cost reductions.
• PENSIONS
The group operates a defined
benefit scheme: the Young & Co.’s
Brewery, P.L.C. Pension Scheme.
Its operation gives rise to various
funding risks the main one of
which is the variability of the
amount of contributions required
to be paid to it by the group in
order to account for past service
benefit deficits and future service
benefit accruals. These, in turn,
are impacted at any point in time
by changes in life expectancy
assumptions, the performance of
the stock market and bond yields.
The scheme has been closed to
new entrants for a number of years
and the group makes additional
contributions over and above
regular service contributions in
order to address any funding deficit.
The group also maintains a close
dialogue with the scheme’s trustee.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 15
DI RECTORS’ REPORT (CONTINUED)
• PEOPLE
• REGU LATION OF TI ED PU BS
People play a key part in helping
the group maintain its premium
position within the pub sector.
This, and the group’s ability to
achieve its strategic and operational
objectives, could therefore be
affected if the group is unable
to attract, retain, develop and
motivate the best people with the
right capabilities throughout the
organisation, whether that be in
the pubs, hotels or head office.
Therefore significant investment is
made in recruitment, remuneration
packages are competitive,
reward policies are in place and
comprehensive training is provided
to ensure that the group’s people
have the right skills to perform
their jobs successfully and achieve
their full potential.
• IT AN D TELECOMS
The group, and particularly its
managed estate, is reliant on
IT systems for communication,
sales transaction recording,
stock management, purchasing,
accounting and reporting and
many of its internal controls. Any
failure of these systems would
cause some degree of disruption
to the business and any extended
period of downtime, loss of
backed up information or delay
in recovering information could
affect performance significantly.
To help protect against this,
information is routinely backed
up and arrangements are in place
with third party providers to assist
with data recovery and business
continuity. The group also regularly
monitors the needs of the business
and invests in new technology and
services as necessary.
• FI NANCE
Note 24, starting on page 46,
contains an indication of the
group’s exposure to certain
financial risks.
According to the Government
self-regulation has had some
positive impact on the industry
but this has not been sufficiently
far-reaching. As a result, last
month the Government began to
consult on establishing a statutory
code (to govern the relationship
between large pub companies and
their tenants) and an independent
adjudicator for the pubs sector (to
enforce that code). As currently
proposed, this new regulatory
regime would not apply to the
group as it doesn’t have more
than 500 non-managed pubs.
The consultation is due to end
next month. According to the
consultation the willingness of
smaller companies to operate a
self-regulatory regime, in particular
with regards to the creation
of company codes and their
certification by an appropriate
body, is likely to influence
the decision on whether the
threshold for the code should be
set at 500. From the company’s
perspective further regulation of its
relationships with its tenants would
be disappointing as the company’s
tenancy agreements already
address the perceived industry
issues. Further, the company
operates a legally binding code
which is currently being updated to
meet the latest requirements of the
UK pub industry framework code
of practice on how tied agreements
should operate in the pub trade;
this is expected to be accredited
later this year.
F I NAN C IAL
I N STR U M E NTS AN D
R E L ATE D MAT TE RS
The group’s financial risk
management objectives and policies
are set out in note 24, starting on
page 46.
PAYM E NT O F S U P P LI E RS
The company’s policy is to pay those
persons who are or may become its
suppliers promptly at the end of the
month following the month in which
invoices are received provided all
trading terms and conditions have
been complied with. As at 1 April
2013 the aggregate amount owing
to trade creditors (see note 23 on
page 46) was equivalent to 34 days’
average purchases from suppliers
(2012: 35 days).
G O I N G C O N C E R N
This report contains a review of the
group’s business together with a list of
principal risks and uncertainties facing
the group. The financial position of
the group, its cash flows, liquidity
position and borrowing facilities
are described within the financial
statements. Note 24, starting on
page 46, summarises the group’s
capital management and principal
treasury objectives and some tools
it uses to monitor and manage its
exposure to certain financial risks
(including credit risk and liquidity
and cash flow risk). The group has
a predominantly freehold backed
balance sheet and committed facilities
of £150 million in place, of which
£118.5 million was drawn down at the
period end, none of which needs to
be refinanced until December 2015.
The directors believe that the group
is well placed to manage its business
risks successfully despite the current
uncertain economic outlook and
they have a reasonable expectation
that the company and the group
have adequate resources to continue
in operational existence for the
foreseeable future. Accordingly they
continue to adopt the going concern
basis in preparing the annual report
and financial statements.
16 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
D I R E CTO RS
NAM ES AN D B RI EF B IOGRAPH ICAL DETAI LS
The names and brief biographical details of the current directors are on page 13. Apart from Edward Turner (who joined the
board on 2 April 2013), all of them were directors throughout the period; no other person was a director during the period.
LENGTH OF APPOI NTM ENTS
Each of the executive directors has been appointed for an indefinite period. The period of notice required to be given to
terminate his appointment is as follows:
NAM E
Stephen Goodyear
Torquil Sligo-Young
Peter Whitehead
Patrick Dardis
Edward Turner
M I N I M U M PERIOD OF
NOTICE FROM YOU NG’S
M I N I M U M PERIOD OF
NOTICE FROM TH E EXECUTIVE
one year
one year
one year
one year
one year
six months
six months
six months
one year
one year
No compensation is payable by Young’s for early termination.
Each of the non-executive directors is part way through a three year term: Nicholas Bryan’s expires on 11 July 2014, both
Roger Lambert’s and David Page’s on 31 July 2014 and Rupert Clevely’s on 1 April 2016.
indemnity provisions in favour of
Rupert Clevely are described in note
30 on page 53; these provisions,
which are qualifying third party
indemnity provisions, were in force
throughout the period and are in
force at the date of this report.
RE-APPOI NTM ENT
Under the company’s articles
of association the following
automatically retire from office
at every AGM but may offer
themselves for re-appointment:
• any director who held office at the
time of the two preceding AGMs
but did not retire at either of them
– this applies to Nicholas Bryan,
Stephen Goodyear and Patrick
Dardis at this year’s AGM; and
• any director appointed by the board
since the last AGM – this applies to
Edward Turner at this year’s AGM.
Nicholas Bryan, Stephen Goodyear,
Patrick Dardis and Edward Turner
are seeking re-appointment and
their brief biographical details are
on page 13.
REM U N ERATION
Details of each director’s
remuneration appear in note 8(b)
on page 35. No director is involved
in deciding his own remuneration.
The remuneration of the executive
directors is determined by the
company’s remuneration committee;
the remuneration of the non-
executive directors is determined
by the executive committee. None
of the executive directors receives
remuneration as a non-executive
director elsewhere.
QUALI FYI NG I N DEM N ITY
PROVISIONS
The company’s articles of association
contains an indemnity provision in
favour of the directors; this provision,
which is a qualifying third party
indemnity provision, was in force
throughout the period and is in force
at the date of this report. Additional
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 17
DI RECTORS’ REPORT (CONTINUED)
D I R E CTO RS’ H O LD I N G S AN D I NTE R E STS
The holdings and interests of the directors who held office at the period end (and their immediate families) in the share capital
of the company are shown in the table below; these are in addition to the interests shown in notes 8(d) and (e) on page 36.
Nicholas Bryan
Beneficial and family
Stephen Goodyear (i), (ii)
Beneficial and family
Torquil Sligo-Young (i), (ii)
Beneficial and family
Trustee
Peter Whitehead (i), (ii)
Beneficial and family
Patrick Dardis (i), (ii)
Beneficial and family
Rupert Clevely (i)
Roger Lambert
David Page
Also interested in:
Beneficial and family
Beneficial and family
Beneficial and family
As at
1 April 2013
2 April 2012
1 April 2013
2 April 2012
1 April 2013
2 April 2012
1 April 2013
2 April 2012
1 April 2013
2 April 2012
1 April 2013
2 April 2012
1 April 2013
2 April 2012
1 April 2013
2 April 2012
1 April 2013
2 April 2012
A shares
8,505
8,505
119,836
111,004
240,971
240,971
3,317,972
3,317,972
50,000
50,000
7,869
7,869
17,000
80,756
5,250
1,000
3,278
3,278
Non-voting
shares
–
–
–
–
10,000
14,000
111,436
111,436
–
–
–
–
–
–
5,000
1,000
–
–
(i) 719,956 (2012: 762,284) A shares held in trust by RBT II Trustees Limited – see note 30 on page 54
(ii) 502,769 (2012: 702,769) A shares held in trust by Young’s Pension Trustees Limited – see note 30 on page 54
C O R P O R ATE
G OVE R NAN C E
The board is committed to good
corporate governance in the
management and operation of the
group’s business.
TH E BOARD
The business and management of the
group is the collective responsibility of
the board. At each meeting the board
considers and reviews the group’s
financial and trading performance.
It has a formal written schedule of
matters reserved for its review and
approval; this includes matters such
as strategy, long term objectives and
major financial and key operational
issues. The board meets every two
months with additional meetings
arranged as required; it met six times
during the period. Formal agendas
and reports are provided to the
board on a timely basis along with
other information to enable it to
discharge its duties. All directors have
access to independent professional
advice at the company’s expense
and to the advice and services of the
Company Secretary. There is a clear
division of responsibility between the
Chairman (who is responsible for the
effective running of the board) and
the Chief Executive (who has overall
responsibility for the running of the
business).
COM M ITTEES
The board has four standing
committees: executive, audit,
remuneration and disclosure.
• EXECUTIVE COM M ITTEE
This comprises the executive
directors and is chaired by Stephen
Goodyear, the Chief Executive. It
usually meets on a weekly basis
and is responsible for the daily
running of the group and the
execution of approved policies and
the business plan. Members of the
company’s senior management are
invited to attend as appropriate.
• AU DIT COM M ITTEE
This comprises Nicholas Bryan,
who chairs it, Roger Lambert
and David Page. It assists the
board in fulfilling its oversight
responsibilities; its primary
functions are to monitor the
integrity of the company’s
financial statements and internal
control systems (including risk
management), to oversee the
company’s relationship with its
external auditor and to review
the effectiveness of the audit
process. The committee’s terms
of reference, which set out in full
18 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
its responsibilities, can be found
in the investor relations section of
www.youngs.co.uk.
• REM U N ERATION
COM M ITTEE
This comprises David Page,
who chairs it, Nicholas Bryan
and Roger Lambert. Its primary
function is to determine, on behalf
of the board, the remuneration
packages of the executive
directors. The committee’s terms of
reference, which set out its other
responsibilities, can be found in
the investor relations section of
www.youngs.co.uk.
• DISCLOSU RE COM M ITTEE
This comprises the executive
directors and is chaired by Peter
Whitehead, the Finance Director.
It assists the company in making
timely and accurate disclosure
of information required to be
disclosed in order to meet legal
and regulatory obligations.
The committee’s terms of
reference, which set out its other
responsibilities, can be found in
the investor relations section of
www.youngs.co.uk.
• NOM I NATION COM M ITTEE
In practice the Chairman and the
Chief Executive lead on the board
nomination and appointment
process. They consider the
balance of skills, knowledge and
experience on the board and make
appropriate recommendations for
consideration by the board. This
formal but unwritten process has
been used effectively for a number
of years and has led the board to
remain of the view that it should
continue to operate in this way
rather than through a more formal
nomination committee.
I NTERNAL CONTROL
The board has overall responsibility
for the internal control system and
for reviewing its effectiveness. The
executive directors implement and
maintain the risk management and
internal control systems. The audit
committee assists the board in
fulfilling its oversight responsibilities
by monitoring the system’s integrity.
The system of control has been
designed to manage risk; it cannot
eliminate it and therefore provides
reasonable, not absolute, assurance
against material misstatement or loss.
RELATIONS WITH
SHAREHOLDERS AN D
I NVESTORS
Copies of the annual report and the
financial statements and the interim
report are sent to all shareholders
and copies are available at www.
youngs.co.uk. The company’s website
also provides other information for
shareholders and interested parties.
Written or e-mailed enquiries are
handled by the Company Secretary.
Shareholders are given the opportunity
to ask questions and raise issues at
the AGM; this can be done formally
during the meeting or informally
with the directors after it. The Chief
Executive and the Finance Director
meet with institutional investors and
analysts after the announcement of the
interim and year end results. Additional
meetings with institutional investors
and/or analysts are arranged from time
to time.
E M P LOYE E S
Considerable importance is placed on
communications with employees and
so, within the limitation of commercial
confidentiality and security, Young’s
provided them with information
concerning trading, development and
other appropriate matters. It did this at
many levels throughout the business
on both a formal and informal level,
including through management
presentations. It also consulted
regularly with employees and their
representatives thereby enabling the
board to have regard to their views
when making decisions likely to affect
their interests; in connection with
this Young’s continued to operate
an information and consultation
committee with its members being
drawn from departments based at
its head office in Wandsworth. The
company’s integrated appraisal and
development process, designed
to improve communications and
company performance, remained in
place, and the company continued
to operate a bonus scheme for
eligible employees. To encourage
further involvement in the group’s
performance the company introduced
an approved savings-related share
option scheme during the period; all
employees of the company, Geronimo
Inns Limited and Geronimo Airports
Limited who had been continuously
employed from 2 April 2010 were
given the opportunity to join. After
saving for a three-year period (through
deductions from net salary), scheme
members can then buy A shares in
the company if they choose to do so
at a discount to the market price at
the time the options were granted to
them. Young’s maintained its policy of
giving full and fair consideration to all
applications for employment, including
those made by disabled people, taking
account of the applicant’s particular
aptitude and ability; of seeking to
continue to employ anyone who
becomes disabled while employed by
the company and arranging training
in a role appropriate to the person’s
changed circumstances; and of giving
all employees, including disabled
employees, equal opportunities for
training, career development and
promotion.
D O NATI O N S
The group made £14,780 of
charitable donations. In addition the
group’s customers, pub managers
and other members of staff were
involved in a variety of initiatives and
fundraising activities. No political
donations were made.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 19
DI RECTORS’ REPORT (CONTINUED)
P U B LI C H EALTH
R E S P O N S I B I LIT Y D EAL
The company continued to support
the Government’s public health
responsibility deal, an initiative
established to tap into the potential
for businesses and other influential
organisations to make a signification
contribution to improving public
health by helping to create that
environment. As a result the company
agreed to ensure effective action
was taken in its managed pubs to
reduce and prevent under-age sales of
alcohol (primarily through the rigorous
application of Challenge 21). The
company also maintained its financial
and in-kind support for Drinkaware
and the “Why let the Good times go
bad?” campaign and agreed to ensure
alcohol advertising was undertaken
by the company’s managed pubs in
accordance with industry codes on
advertising and was not placed on
any outdoor poster site within 100
meters of a school. Recognising the
impact chronic conditions could have,
guides (developed through the public
health responsibility deal’s health at
work network) remained embedded
within the company’s HR procedures
to ensure that those with chronic
conditions at work were managed in
the best way possible with reasonable
flexibilities and workplace adjustments.
N OTI F I CATI O N S O F
MA J O R H O LD I N G S O F
VOTI N G R I G HTS
As at 1 April 2013 the company
had been notified of the following
holdings of 3% or more of the voting
rights in the company:
Thomas Young
James Young
Torquil Sligo-Young
BlackRock Investment
Management (UK) Limited
Lindsell Train Limited
El Oro and Exploration
Company plc
14.31%
13.81%
11.99%
8.13%
5.28%
3.10%
No changes in those holdings, and
no other holdings of 3% or more
of the voting rights in the company,
had been notified to the company
between 2 April 2013 and 21 May
2013, both dates inclusive.
STATE M E NT O F C E RTAI N
R E S P O N S I B I LITI E S
I N R E L ATI O N TO TH E
F I NAN C IAL STATE M E NTS
AN D OTH E RW I S E
For each financial period the
directors are required to prepare
an annual report and financial
statements. The latter must be
prepared in accordance with
International Financial Reporting
Standards (“IFRS”) and applicable
law and must present fairly the
financial position of the group and
the financial performance and cash
flows of the group for the relevant
period. The directors have also
elected to prepare the company’s
financial statements under IFRS.
In preparing the statements the
directors must select suitable
accounting policies and then apply
them consistently, state that the
group has complied with IFRS
(subject to any material departures
disclosed and explained in the
financial statements) and present
information, including accounting
policies, in a manner that provides
relevant, reliable and comparable
information. The directors are
responsible for keeping accounting
records which disclose with
reasonable accuracy, at any time,
the financial position of the group
and the company at that time and
enable them to ensure that the
financial statements comply with
the Companies Act 2006. They are
also responsible for safeguarding
the assets of the group and the
company and hence for taking
20 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
reasonable steps for the prevention
and detection of fraud and other
irregularities.
D I S C LO S U R E O F
I N F O R MATI O N TO
TH E AU D ITO R
Each of the persons who was a
director at the time when this report
was approved has confirmed that,
so far as he was aware, there was no
information needed by the company’s
auditor in connection with preparing
its report of which the company’s
auditor was unaware. Each of those
individuals has also confirmed
that he took all the steps that he
ought to have taken as a director
to make himself aware of any such
information and to establish that the
company’s auditor was aware of it.
This paragraph is to be interpreted
in accordance with section 418 of the
Companies Act 2006.
P R E PAR ATI O N AN D
D I S C L AI M E R
This annual report and the financial
statements for the period ended
1 April 2013 have been drawn
up and presented for the purpose
of complying with English law.
Any liability arising out of or in
connection with them will also be
determined in accordance with
English law.
By order of the board
Anthony Schroeder
Company Secretary
22 May 2013
I N DEPEN DENT AU DITOR’S REPORT
Independent auditor’s report to the members of Young & Co.’s Brewery, P.L.C.
We have audited the financial statements of Young & Co.’s Brewery, P.L.C. for the period ended 1 April 2013 which comprise the Group Income
Statement, the Group and Parent Company Statements of Comprehensive Income, the Group and Parent Company Balance Sheets, the Group
and Parent Company Statements of Cash Flow, the Group and Parent Company Statements of Changes in Equity and the related notes 1 to 34.
The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions
of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and
the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 20, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial
statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with
the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the
financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting
policies are appropriate to the group’s and the parent company’s circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we
read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements. If
we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 1 April 2013 and of the
group’s profit for the period then ended;
• the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the directors’ report for the financial period for which the financial statements are prepared is consistent
with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Andy Glover (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
22 May 2013
Notes:
1. The maintenance and integrity of the Young & Co.’s Brewery, P.L.C. website is the responsibility of the directors; the work carried out by the auditor does not involve
consideration of these matters and, accordingly, the auditor accepts no responsibility for any changes that may have occurred to the financial statements since they
were initially presented on the website.
2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 21
Notes
2013
£000
2012
£000
6
7
9
11
11
26
12
12
13
16
16
16
16
193,677
(164,742)
178,964
(152,802)
28,935
(1,809)
27,126
(5,894)
543
544
22,319
(5,274)
–
17,045
26,162
(28,827)
(2,665)
(6,135)
537
769
(7,494)
(3,540)
5,640
(5,394)
–
17,045
(1,117)
(6,511)
16,988
57
17,045
(6,484)
(27)
(6,511)
Pence
Pence
35.23
35.23
35.20
35.20
(11.13)
(13.45)
(11.13)
(13.45)
GROU P I NCOM E STATEM ENT
For the 52 weeks ended 1 April 2013
Continuing operations
Revenue
Operating costs before exceptional items
Operating profit before exceptional items
Operating exceptional items
Operating profit/(loss)
Finance costs
Finance revenue
Other finance income
Profit/(loss) before tax
Taxation
Taxation on property revaluation
Profit/(loss) for the period from continuing operations
Discontinued operations
Loss for the period from discontinued operations
Profit/(loss) for the period
Attributable to
Shareholders of the parent
Non controlling interest
Profit/(loss) for the period
Earnings/(loss) per 12.5p ordinary share
Basic from continuing operations
Basic from continuing and discontinued operations
Diluted from continuing operations
Diluted from continuing and discontinued operations
All discontinued operations are attributable to the shareholders of the parent.
The notes on pages 28 to 56 form part of these financial statements.
The independent auditor’s report is set out on page 21.
22 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
STATEM ENTS OF COM PREH ENSIVE I NCOM E
For the 52 weeks ended 1 April 2013
Group
Company
Notes
2013
£000
2012
£000
2013
£000
2012
£000
Profit/(loss) for the period
17,045
(6,511)
14,786
(9,623)
Other comprehensive income
Unrealised gain on revaluation of property
Actuarial loss on retirement benefit schemes
Fair value movement of interest rate swaps
Tax on above components of other comprehensive income
Discontinued operations’ actuarial loss (net of deferred tax) on
retirement benefit schemes
18
26
24
12
8,547
(3,102)
(1,647)
2,916
203,065
(4,088)
(8,215)
(41,222)
5,450
(3,102)
(1,647)
3,144
203,065
(4,088)
(8,215)
(41,222)
–
(377)
–
–
6,714
149,163
3,845
149,540
Total comprehensive income
23,759
142,652
18,631
139,917
Attributable to
Shareholders of the parent
Non controlling interest
23,702
57
142,679
(27)
18,631
–
139,917
–
Total comprehensive income
23,759
142,652
18,631
139,917
All discontinued operations are attributable to the shareholders of the parent.
The notes on pages 28 to 56 form part of these financial statements.
The independent auditor’s report is set out on page 21.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 23
BALANCE SH EETS
At 1 April 2013
Non current assets
Goodwill
Property and equipment
Investment in subsidiaries
Deferred tax assets
Other financial asset
Current assets
Inventories
Other financial asset
Trade and other receivables
Cash
Non current assets classified as held for sale
Total assets
Current liabilities
Borrowings
Trade and other payables
Income tax payable
Non current liabilities
Borrowings
Derivative financial instruments
Deferred tax liabilities
Retirement benefit schemes
Total liabilities
Net assets
Capital and reserves
Share capital
Share premium
Capital redemption reserve
Hedging reserve
Revaluation reserve
Retained earnings
Equity attributable to equity shareholders of the parent
Non controlling interest
Group
Company
Notes
2013
£000
2012
£000
2013
£000
2012
£000
17
18
19
25
13
20
13
21
22
24
23
24
24
25
26
27
20,426
515,899
–
7,111
–
543,436
2,455
4,749
4,261
6,123
20,426
502,042
–
–
4,463
–
462,358
24,254
7,135
–
526,931
493,747
2,342
4,749
4,445
3,914
1,875
4,749
29,729
4,938
41,291
–
450,191
24,254
–
4,463
478,908
1,887
4,749
32,029
2,577
41,242
755
17,588
15,450
–
755
–
561,024
543,136
535,038
520,905
(10,006)
(24,156)
(2,545)
(5)
(26,140)
(2,469)
(10,006)
(23,108)
(2,101)
(36,707)
(28,614)
(35,215)
(5)
(24,256)
(2,204)
(26,465)
(108,680)
(13,870)
(58,381)
(8,841)
(121,978)
(12,223)
(54,388)
(8,290)
(108,680)
(13,870)
(51,850)
(8,841)
(121,978)
(12,223)
(47,156)
(8,290)
(189,772)
(196,879)
(183,241)
(189,647)
(226,479)
(225,493)
(218,456)
(216,112)
334,545
317,643
316,582
304,793
6,028
1,274
1,808
(10,680)
168,860
167,255
334,545
–
6,028
1,274
1,808
(9,290)
158,731
159,134
317,685
(42)
6,028
1,274
1,808
(10,680)
165,991
152,161
316,582
–
6,028
1,274
1,808
(9,290)
158,731
146,242
304,793
–
Total equity
334,545
317,643
316,582
304,793
Approved by the board of directors and signed on its behalf by:
Nicholas Bryan
Peter Whitehead
Chairman
Finance Director
22 May 2013
The notes on pages 28 to 56 form part of these financial statements.
The independent auditor’s report is set out on page 21.
24 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
STATEM ENTS OF CASH FLOW
For the 52 weeks ended 1 April 2013
Operating activities
Net cash generated from operations
Interest received
Tax paid
Notes
29
Group
Company
2013
£000
2012
£000
2013
£000
2012
£000
35,118
6
(5,393)
34,601
5
(3,885)
30,794
1,264
(4,420)
31,235
768
(3,885)
Net cash flow from operating activities
29,731
30,721
27,638
28,118
Investing activities
Sale of property and equipment
Sale of discontinued operations
Purchases of property and equipment
Business combinations, net of cash acquired
Net cash used in investing activities
Financing activities
Interest paid
Equity dividends paid
Decrease in borrowings
Decrease in short term borrowings
18
14
15
4,161
5,000
(16,793)
(3,700)
7,033
5,100
(25,605)
–
4,155
5,000
(14,542)
(3,700)
7,033
5,100
(22,119)
–
(11,332)
(13,472)
(9,087)
(9,986)
(5,808)
(6,882)
(3,500)
–
(6,154)
(6,549)
(300)
(2,664)
(5,808)
(6,882)
(3,500)
–
(6,154)
(6,549)
(300)
(2,664)
Net cash flow used in financing activities
(16,190)
(15,667)
(16,190)
(15,667)
Increase in cash
Cash at the beginning of the period
Cash at the end of the period
2,209
3,914
6,123
1,582
2,332
3,914
2,361
2,577
4,938
2,465
112
2,577
The notes on pages 28 to 56 form part of these financial statements.
The independent auditor’s report is set out on page 21.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 25
GROU P STATEM ENT OF CHANGES I N EQU ITY
At 1 April 2013
Capital
Share redemption Hedging Revaluation
reserve
£000
reserve
£000
reserve
£000
capital (1)
£000
Notes
Total equity
attributable
Retained
earnings shareholders
£000
Non
to equity controlling
interest
£000
£000
Total
equity
£000
At 4 April 2011
7,302
1,808
(2,966)
– 175,388
181,532
(15) 181,517
Total comprehensive income
Loss for the period
Other comprehensive income
Unrealised gain on revaluation of property
Actuarial loss on retirement benefit schemes
Fair value movement of interest rate swaps
Tax on above components of other
comprehensive income
Discontinued operations’ actuarial loss
(net of deferred tax) on retirement benefit schemes
18
26
24
12
Total comprehensive income
Transactions with owners recorded directly in equity
Dividends paid on equity shares
Revaluation reserve realised on disposal of properties
Share based payments by discontinued operations
15
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(6,484)
(6,484)
(27)
(6,511)
–
–
(8,215)
203,065
–
–
–
(4,088)
–
203,065
(4,088)
(8,215)
–
–
–
203,065
(4,088)
(8,215)
1,891
(43,702)
589
(41,222)
–
(41,222)
–
–
(377)
(377)
(6,324) 159,363
(3,876)
149,163
–
–
(377)
149,163
(6,324) 159,363
(10,360)
142,679
(27) 142,652
–
–
–
–
–
(632)
–
(6,549)
632
23
(6,549)
–
23
(632)
(5,894)
(6,526)
–
–
–
–
(6,549)
–
23
(6,526)
At 2 April 2012
7,302
1,808
(9,290) 158,731 159,134
317,685
(42) 317,643
Total comprehensive income
Profit for the period
Other comprehensive income
Unrealised gain on revaluation of property
Actuarial loss on retirement benefit schemes
Fair value movement of interest rate swaps
Tax on above components of other
comprehensive income
18
26
24
12
Total comprehensive income
Transactions with owners recorded directly in equity
Dividends paid on equity shares
Revaluation reserve realised on disposal of properties
Disposal of subsidiary
Share based payments
Tax on share based payments
15
28
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
16,988
16,988
57
17,045
–
–
(1,647)
8,547
–
–
–
(3,102)
–
8,547
(3,102)
(1,647)
257
2,183
476
2,916
(1,390)
10,730
(2,626)
6,714
–
–
–
–
–
8,547
(3,102)
(1,647)
2,916
6,714
(1,390)
10,730
14,362
23,702
57
23,759
–
–
–
–
–
–
–
(601)
–
–
–
(6,882)
601
–
33
7
(6,882)
–
–
33
7
–
–
(15)
–
–
(6,882)
–
(15)
33
7
(601)
(6,241)
(6,842)
(15)
(6,857)
At 1 April 2013
7,302
1,808
(10,680) 168,860 167,255
334,545
– 334,545
(1) Total share capital comprises the share capital issued and fully paid of £6,028,000 (2012: £6,028,000) and the share premium account of
£1,274,000 (2012: £1,274,000).
The notes on pages 28 to 56 form part of these financial statements.
The independent auditor’s report is set out on page 21.
26 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
At 1 April 2013
At 4 April 2011
7,302
1,808
(2,966)
–
165,281
171,425
Capital
Share redemption
reserve
£000
capital (1)
£000
Notes
Hedging Revaluation
reserve
£000
reserve
£000
Retained
earnings
£000
Total
equity
£000
Total comprehensive income
Loss for the period
Other comprehensive income
Unrealised gain on revaluation of property
Fair value movement of interest rate swaps
Actuarial loss on retirement benefit schemes
Tax on above components of other comprehensive income
Total comprehensive income
Transactions with owners recorded directly in equity
Dividends paid on equity shares
Revaluation reserve realised on disposal of properties
At 2 April 2012
Total comprehensive income
Profit for the period
Other comprehensive income
Unrealised gain on revaluation of property
Actuarial loss on retirement benefit schemes
Fair value movement of interest rate swaps
Tax on above components of other comprehensive income
Total comprehensive income
Transactions with owners recorded directly in equity
Dividends paid on equity shares
Revaluation reserve realised on disposal of properties
Share based payments
Tax on share based payments
18
24
26
12
15
18
26
24
15
28
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(9,623)
(9,623)
–
(8,215)
–
1,891
203,065
–
–
(43,702)
–
–
(4,088)
589
203,065
(8,215)
(4,088)
(41,222)
(6,324)
159,363
(3,499)
149,540
(6,324)
159,363
(13,122)
139,917
–
–
–
–
(632)
(6,549)
632
(6,549)
–
(632)
(5,917)
(6,549)
7,302
1,808
(9,290) 158,731
146,242
304,793
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
14,786
14,786
–
–
(1,647)
257
5,450
–
–
2,411
–
(3,102)
–
476
5,450
(3,102)
(1,647)
3,144
(1,390)
7,861
(2,626)
3,845
(1,390)
7,861
12,160
18,631
–
–
–
–
–
–
(601)
–
–
(6,882)
601
33
7
(6,882)
–
33
7
(601)
(6,241)
(6,842)
At 1 April 2013
7,302
1,808
(10,680) 165,991
152,161
316,582
(1) Total share capital comprises the share capital issued and fully paid of £6,028,000 (2012: £6,028,000) and the share premium account of
£1,274,000 (2012: £1,274,000).
The notes on pages 28 to 56 form part of these financial statements.
The independent auditor’s report is set out on page 21.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 27
NOTES TO TH E FI NANCIAL STATEM ENTS
For the period ended 1 April 2013
1. GENERAL INFORMATION
The group and parent company financial statements of Young & Co.’s Brewery, P.L.C. for the period ended 1 April 2013 were authorised for issue by
the board of directors on 22 May 2013. Young & Co.’s Brewery, P.L.C. is a public limited company incorporated and domiciled in England and Wales.
The company’s shares are listed on the Alternative Investment Market of the London Stock Exchange. The nature of the group’s operations and its
principal activities are set out in note 5 and in the directors’ report on pages 14 to 20.
The current period and prior period relate to the 52 weeks ended 1 April 2013 and 2 April 2012 respectively.
The financial statements are presented in pounds sterling and all values are rounded to the nearest thousand pounds (£000) except where
otherwise indicated.
2. BASIS OF PREPARATION
The consolidated financial statements of the group have been prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted for use in the European Union. IFRS includes the application of International Financial Reporting Standards including International
Accounting Standards (IAS) and related Interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and Interpretations
of the Standing Interpretations Committee (SIC). During the period, new IFRS and amendments to existing IFRS were issued by the International
Accounting Standards Board (IASB). The impact and, if applicable, the adoption of these standards is described below in “New Accounting Standards,
Amendments and Interpretations”.
No separate income statement is presented for the company, as permitted by section 408(3) of the Companies Act 2006. The company’s profit after
tax for the period was £14,786,000 (2012: £9,623,000 loss).
New Accounting Standards, Amendments and Interpretations
The group has adopted the following new accounting standards during the period.
IFRS 1: Severe Hyperinflation and Removal of Fixed Dates for First time Adopters (Amendment): The amendment allows entities that were subject
to serve hyperinflation to measure all assets and liabilities at fair value on conversion date to IFRS. The group considers the amendment to have no
impact as its operations are based entirely in the UK and is not subject to serve hyperinflation.
IFRS 7: Financial Instruments: Disclosures (Amendment): The amendments are effective for accounting periods beginning on or after 1 July 2011.
Additional disclosures are now required when financial assets are derecognised. The adoption of the amendment has had no impact on the group.
IAS 12: Income Taxes (Amendment) – Deferred Taxes: Recovery of Underlying Assets: The amendment presumes that deferred tax on investment
properties measured at fair value will be recognised on a sale basis. Non-depreciable assets should always be measured on a sale basis. The group
does not hold any investment properties but adopted the revaluation model on its property and equipment in the prior period. The group does not
depreciate freehold land and the residual value of its freehold and long leasehold buildings. These non-depreciable assets are measured on a sale basis
for deferred tax.
At the date of authorisation of these financial statements, the following revised standard, which has not been applied in these financial statements, was
in issue but not yet effective:
IAS 19: Employee Benefits (Revised) – was issued in June 2011 and the key impact on the group will be to remove the separate assumptions for
expected return on plan assets and discounting of scheme liabilities and replace them with one single discount rate for the net deficit.
The revised standard is expected to increase the other finance charge in 2014 by approximately £900,000. Had the standard been applied in 2013 it
is estimated that, within the income statement, the other finance income of £544,000 would have been a charge of approximately £360,000 (2012:
£769,000 income restated to a £349,000 charge). Within other comprehensive income, the actuarial loss on retirement benefits would have reduced
by £904,000 (2012: £1,118,000). Therefore the overall impact on the retirement benefit schemes liability would be nil (2012: £nil) and it would
additionally have no impact on the deferred tax asset (2012: £nil).
The directors intend to adopt the revised standard in 2014 and restate the prior year information onto a comparable basis.
The directors also intend to adopt the Standards, Amendments and Interpretations listed below when they become effective. The directors do not
expect that adoption in future periods will have a material impact, apart from IFRS 13, on the financial statements of the group or company. IFRS 13:
Fair Value Measurement – establishes a single source of guidance under IFRS for all fair value measurements. The standard does not change when a
company is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted.
The group is currently assessing the impact that this standard will have on the financial position and performance.
IFRS 1
IFRS 7
IFRS 9
Government Loans (Amendment)
Effective date
1 January 2013
Offsetting Financial Assets and Financial Liabilities (Amendment)
1 January 2013
Financial Instruments: Classification and Measurement
1 January 2015
IFRS 10, IAS 27
Consolidated Financial Statements, Separate Financial Statements
1 January 2014
IFRS 10, IFRS 12 and IAS 27
Investments Entities (Amendments)
1 January 2014
IFRS 11, IAS 28
Joint Arrangements, Investments in Associates and Joint Ventures
1 January 2014
IFRS 12
IFRS 13
IAS 1
IAS 32
IFRIC 20
Disclosure of Interests in Other Entities
Fair Value Measurement
1 January 2014
1 January 2013
Presentation of Items of Other Comprehensive Income (Amendment)
1 July 2012
Offsetting Financial Assets and Financial Liabilities (Amendment)
1 January 2014
Stripping Costs in the Production Phase of a Surface Mine
1 January 2013
28 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted are set out below and, except as noted above, have been applied consistently in presenting the group and
parent company financial information.
(a) Basis of consolidation
The group’s financial statements consolidate the financial statements of Young & Co.’s Brewery, P.L.C. with the entities it controls, its subsidiaries, and a
special purpose entity, drawn up to the period end. Control exists where the company has the power to govern the financial and operating policies of
the investee entity so as to obtain benefits from its activities. The special purpose entity is an Employee Share Ownership Plan (ESOP) Trust.
The results of subsidiaries acquired or disposed of during the period are included in the group income statement from the effective date of acquisition
or up to the effective date of disposal, as appropriate.
The financial statements of the subsidiaries and special purpose entity are consolidated on a comparable period basis, using consistent accounting
policies. All inter company balances and transactions, including unrealised profits arising on them, are eliminated.
For non wholly owned subsidiaries, a share of the profit/(loss) for the financial period and the net assets is attributed to the non controlling interests as
shown in the group income statement, the group statement of comprehensive income and the group balance sheet.
(b) The parent company’s investments in subsidiaries
In its separate financial statements, the parent company recognises its investments in its subsidiaries on the basis of the direct equity interest. Income is
recognised from these investments in relation to distributions received.
(c) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured.
Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and VAT.
The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.
Rental income
Rental income arising from operating leases on properties is accounted for on a straight line basis over the lease term.
Interest income
Revenue is recognised as interest accrues (using the effective interest method).
Dividends
Revenue is recognised when the company’s right to receive payment is established.
(d) Exceptional items
Exceptional items, as disclosed on the face of the income statement, are items which due to their material and non recurring nature have been classified
separately in order to draw them to the attention of the reader of the financial statements. They are included in the adjustments that, in management’s
judgement, are required in order to show more accurately the business performance of the group in a consistent manner and to reflect how the
business is managed and measured on a day to day basis.
(e) Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value, and the amount of any non controlling interest in the acquiree. The non controlling interest is
measured as the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in operating
exceptional items.
Goodwill arising on acquisition represents the excess of the cost of acquisition over the fair value of the net identifiable assets acquired and liabilities
assumed at the date of acquisition. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss
on disposal.
(f) Property and equipment
Properties, including land and buildings, and fixtures, fittings and equipment are held at fair value, and are revalued by qualified valuers on a sufficiently
regular basis using open market values so that the carrying value of an asset does not differ significantly from its fair value at the balance sheet date. Surpluses
which arise from the revaluation exercise are included within other comprehensive income (in the revaluation reserve) unless they are reversing a revaluation
adjustment which has been recognised in the income statement previously. Where the revaluation exercise gives rise to a deficit, this is reflected directly in other
comprehensive income (in the revaluation reserve) to the extent that a surplus exists against the same asset. Any further decrease in value is recognised in the
income statement as an exceptional expense.
The carrying amount of an asset, less any residual value, is depreciated on a straight line basis over the asset’s useful life or lease term if shorter. The
residual value, useful life and depreciation method applied to each asset are reviewed annually. The group does not depreciate freehold land and the
residual value of its freehold and long leasehold buildings.
Useful lives:
Freehold and long leasehold buildings
Short leasehold buildings
Fixtures, fittings and equipment
50 years
Shorter of the estimated useful life and the lease term
3-10 years
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable
amount (note 3(g)).
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 29
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The gain arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of
the asset, and is recognised in the income statement. Pub fixtures, fittings and equipment are treated as disposals in the period following completion
of their write down.
(g) Impairment of assets
The carrying values of investments, property and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value
may not be recoverable. Goodwill is mandatorily assessed for impairment on an annual basis or more frequently if there are indications that the carrying value
may be impaired.
Impairment is assessed on the basis of either each individual asset or each individual cash generating unit (an individual pub) or, in the case of goodwill, the
group of cash generating units associated with it. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to each of the group’s cash generating units (or groups of cash generating units) that are expected to benefit from the combination.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and the value in use; it is determined for an individual asset unless the asset does not generate cash inflows that
are largely independent of those from other assets of groups of assets. The fair value less costs to sell of the asset is assumed to be the market value of the
property. Value in use is assessed by reference to the estimated future cash flows which are discounted to present value using an appropriate pre tax discount
rate. Impairment losses are recognised in the income statement.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset
in prior periods. A reversal of an impairment loss is recognised immediately in the group income statement unless the impairment loss related to goodwill in
which case it is not reversed.
(h) Leases
(1) Where the group is the lessee
Assets held under finance leases which transfer to the group substantially all the risks and benefits incidental to ownership of the leased item are
capitalised at the inception of the lease, with a corresponding liability being recognised for the lower of the fair value of the leased asset and the present
value of the minimum lease payments.
Lease payments are apportioned between the reduction of the lease liability and finance charges in the income statement so as to achieve a constant
rate of interest on the remaining balance of the liability.
Leases where the lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases and rentals
payable are charged in the income statement on a straight line basis over the lease term.
(2) Where the group is the lessor
Assets leased out under operating leases are included in property and equipment and depreciated over their estimated useful lives. Rental income,
including the effect of lease incentives, is recognised on a straight line basis over the lease term.
(i) Non current assets held for sale
Assets whose carrying amounts will be recovered principally by sale rather than continuing use are classified separately as assets held for sale. Assets are
classified as held for sale when management has committed to their sale, the asset is available for immediate sale and a sale is highly probable. Assets
held for sale are measured at the lower of their carrying value and fair value less costs of disposals.
(j) Inventories
Inventories are valued at the lower of cost and net realisable value. Cost includes all costs of purchase, costs of conversion and other costs incurred in
bringing the inventories to their present location and condition. The cost formula used is equivalent to a ‘First in, First out’ method.
(k) Cash
Cash in the balance sheet comprises cash at banks and in hand. For the purpose of the group and parent company cash flow statements cash is net of
outstanding bank overdrafts. Cash and cash equivalents include only deposits which mature in less than three months.
(l) Trade and other payables
Trade payables are recognised initially at fair value and subsequently at amortised cost. When applicable, trade and other payables are analysed between
current and non current liabilities on the face of the balance sheet, depending on when the obligation to settle will crystallise.
(m) Interest bearing loans and borrowings
All loans and borrowings are initially recognised at fair value. Directly attributable transaction costs are capitalised and amortised, using the effective
interest method through finance expense, over the life of the facility.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.
(n) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The current tax payable is based on taxable profit for the period. Taxable profit differs from profit before tax as reported in the income statement
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable
or deductible. The group’s liability for current tax is calculated using UK tax rates that have been enacted or substantively enacted by the balance
sheet date.
The current tax expense is recognised in the income statement unless it relates to items that are credited or charged to equity, in which case it is
credited or charged directly to equity.
30 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
Deferred tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts, with the
following exceptions:
• where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
• in respect of taxable temporary differences associated with investments in subsidiaries or associates where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and
• deferred income tax assets are recognised only to the extent that it is probable that taxable profits will be available against which the deductible
temporary differences, carried forward tax credits or tax losses can be utilised.
Where capital gains have been rolled over for tax purposes a deferred tax liability is recorded on the rolled over gain to reflect the tax that may be due
on this amount at a future date.
Where there has been an upward revaluation of an asset and the asset is expected to be realised through disposal, a deferred tax liability is recorded based
on the difference between the indexed cost of the asset less any capital gains which have been rolled over against the asset and the revalued amount.
Deferred tax is measured on an undiscounted basis at the UK tax rates that are expected to apply on reversal of the underlying temporary differences,
based on tax rates and laws enacted or substantively enacted at the balance sheet date.
(o) Accounting for the ESOP Trust
The capital gains tax liability that may arise on the allocated shares in the Ram Brewery Trust II when they are transferred to employees on retirement is
recognised as a provision in the financial statements.
(p) Derivative financial instruments and hedging
The group uses derivative financial instruments such as interest rate swaps to hedge its risk associated with interest rate fluctuations. From 1 April 2006
derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently
re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
The fair value of interest rate swap contracts is determined by reference to market values for similar instruments.
For those derivatives designated as hedges and for which hedge accounting is desired, the hedging relationship is documented at its inception. This
documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how its effectiveness will be
measured throughout its duration. Such hedges are expected at inception to be highly effective.
Where cash flow hedge accounting is not applied, the movement in the fair value of the derivative is recognised immediately in the income statement.
Where cash flow hedge accounting is applied, as in the case of the interest rate swaps held by the group, the effective portion of the gain or loss on the
hedging instrument is recognised in the statement of comprehensive income, while the ineffective portion is recognised in the income statement.
If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts
previously recognised in equity remain in equity until the forecast transaction occurs, at which point they are transferred to the income statement. If the
related transaction is not expected to occur, the amount held in equity is recognised immediately in the income statement.
(q) Pensions and other post retirement benefits
The company operates a defined contribution pension scheme, a defined benefit pension scheme and a post retirement health care scheme.
Contributions to the defined contribution scheme are recognised in the income statement in the period in which they become due.
For the defined benefit scheme, the cost of providing benefits is determined using the projected unit credit method, which attributes entitlements to
benefits to the current period (to determine current service cost) and to the current and prior periods (to determine the present value of defined benefit
obligations) and is based on actuarial advice. Past service costs are recognised in the income statement on a straight line basis over the vesting period
or immediately if the benefits have vested. When a settlement (eliminating all obligations for benefits already accrued) or a curtailment (reducing future
obligations as a result of a material reduction in the scheme membership or a reduction in the future entitlement) occurs, the obligation and related
scheme assets are re-measured using current actuarial assumptions and the resultant gain or loss is recognised in the income statement during the
period in which the settlement or curtailment occurs.
The interest element of the defined benefit cost represents the change in present value of scheme obligations resulting from the passage of time, and is
determined by applying the discount rate to the opening present value of the benefit obligations, taking into account material changes in the obligations
during the period. The expected return on scheme assets is based on an assessment made at the beginning of the period of long term market returns
on scheme assets, adjusted for the effect on the fair value of scheme assets of contributions received and benefits paid during the period. The difference
between the expected return on scheme assets and the interest cost is recognised in the income statement as other finance income or expense.
Actuarial gains and losses are recognised in full in the statement of comprehensive income in the period in which they occur.
The defined benefit pension liability in the balance sheet comprises the present value of the defined benefit obligations (using a discount rate based on
high quality corporate bonds), less any past service cost not yet recognised less the fair value of scheme assets out of which the obligations are to be
settled directly. Fair value is based on market price information and in the case of quoted securities is the published bid price. The value of a net pension
benefit asset is restricted to the sum of any unrecognised past service costs and the present value of any amount the group expects to recover by way of
refunds from the scheme or reductions in the future contributions.
Post retirement health care benefits are provided for certain employees and certain directors (together, the “members”). Entry to the scheme is on a
discretionary basis. The annual premium for providing cover is determined by BUPA. This information is taken by qualified actuaries who then assess the
reserve required to provide this benefit for members’ future lifetimes, using IAS 19 assumptions. The liability for new entrants is recognised through the
income statement in the period in which the benefit is granted. Actuarial gains and losses arising from experience adjustments, and changes in actuarial
assumptions, are recognised in full directly in the statement of comprehensive income.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 31
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(r) Trade and other receivables
Trade receivables are recognised and carried at the lower of their original invoice value and recoverable amount. A provision for impairment is made
when there is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor) that the group will not be able to
collect all of the amounts due under the original terms of the invoice. The carrying amount of the receivable is reduced through use of an impairment
provision. Impaired debts are derecognised when they are assessed as irrecoverable.
(s) Use of estimates
The preparation of financial information in conformity with IFRS requires management to make certain judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Although these estimates are based on
management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised
and in any future period affected.
The areas involving a higher degree of judgement or complexity, or where the most sensitive estimates and assumptions are significant to the financial
statements, are set out in note 4.
4. KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
The following are the key judgements that management have made in the process of applying the group’s accounting policies and that have the most
significant effect on the amounts recognised in the financial statements.
(a) Estimated valuation of property and equipment
The group is required to value property and equipment on a sufficiently regular basis using open market values to ensure the current carrying value
does not differ significantly from the fair value. The valuation is based on market observations and estimates on the selling price in an arms’ length
transaction, and includes estimates of future income levels and trading potential for each pub, as well as taking into account other factors such as
location, tenure and current income levels.
(b) Estimated impairment of goodwill
The group considers annually whether goodwill has suffered any impairment in accordance with the accounting policy set out in note 3(g). The
recoverable amounts of cash generating units have been determined based on value in use calculations. This calculation requires the use of estimates
including growth rates, capital maintenance expenditure and pre tax discount rates. See notes 3(g) and 17.
(c) Business combinations
When assets are acquired, management determines whether the assets form a business combination. A fair value exercise of both the consideration
and the net assets acquired is performed once it is determined that a business combination has taken place. If the fair value of the consideration is in
excess of the fair value of the net assets acquired, the difference is recognised as goodwill. If the opposite occurs, the difference is recognised in the
income statement. The group makes judgements and estimates in relation to the fair value of the consideration, the net assets acquired and whether the
purchase represents a business combination. See notes 3(e) and 14.
(d) Depreciation
Depreciation is provided so as to write down the assets to their residual values over the estimated useful lives. The selection of these residual values and
estimated lives requires the exercise of management’s judgement. See notes 3(f) and 18.
(e) Defined benefit pension obligations
Measurement of defined benefit pension obligations requires an estimate of future changes in salaries and inflation, as well as mortality rates, the
expected return on assets and the selection of a suitable discount rate. These have been determined on advice from an independent qualified actuary.
See notes 3(q) and 26.
(f) Taxation
Assessing the outcome of uncertain tax positions requires judgements to be made in relation to the likely outcome of dealings with HM Revenue &
Customs and case law e.g. recoverability of VAT on gaming machines (see note 33). Tax benefits are not recognised unless it is probable that they will
be obtained. Tax provisions are made if it is probable that a liability will arise. The group reviews each significant tax liability or benefit to assess the
appropriate accounting treatment. See notes 3(n), 12 and 25.
5. SEGMENTAL REPORTING
The group is organised into the reporting segments referred to opposite. These segments are based on the different resources and risks involved in
the running of the group. The executive board of the group internally reviews each reporting segment’s operating profit or loss before exceptional
items for the purpose of deciding on the allocation of resources and assessing performance.
The group has three operating segments: Young’s managed houses, Geronimo managed houses and Tenanted houses. Both Young’s and Geronimo
managed houses operate pubs. Revenue is derived from sales of drink, food and, also for Young’s managed houses, accommodation. Due to
common economic characteristics, similar product offerings and customers, the Young’s managed houses and Geronimo managed houses operating
segments have been reported below as a single reportable segment, managed houses. Tenanted houses consists of pubs owned or leased by the
company and leased or sub leased to third parties. Revenue is derived from rents payable by, and sales of drink made to, tenants. Unallocated relates
to head office costs.
There were intersegment revenues of £511,000 between the segments in the current period (2012: £473,000), which have been eliminated on
consolidation. Intersegment sales are charged at current market prices. The group’s revenue is derived entirely from the UK.
32 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
Income statement
2013
External revenue
Intersegment revenue
Total segment revenue
Depreciation
Managed
houses
£000
181,558
–
Tenanted
houses
£000
11,623
–
Segment
total
£000
193,181
–
Unallocated
£000
496
511
Total
£000
193,677
511
181,558
11,623
193,181
1,007
194,188
(10,377)
(1,019)
(11,396)
(288)
(11,684)
Operating profit/(loss) before exceptional items
Operating exceptional items
Operating profit/(loss)
39,560
(977)
38,583
4,245
(114)
4,131
43,805
(1,091)
42,714
(14,870)
(718)
(15,588)
28,935
(1,809)
27,126
2012
External revenue
Intersegment revenue
Total segment revenue
Depreciation
Operating profit/(loss) before exceptional items
Operating exceptional items
Operating profit/(loss)
164,999
–
13,555
–
178,554
–
164,999
13,555
178,554
410
473
883
178,964
473
179,437
(10,158)
35,257
(21,605)
13,652
(1,222)
5,286
(6,950)
(1,664)
(11,380)
40,543
(28,555)
11,988
(460)
(11,840)
(14,381)
(272)
(14,653)
26,162
(28,827)
(2,665)
The following is a reconciliation of the operating profit/(loss) to the profit/(loss) before tax from continuing operations:
Operating profit/(loss)
Finance costs
Finance revenue
Other finance income
Profit/(loss) before tax from continuing operations
Balance sheet
2013
Segment assets
Deferred tax assets
Other financial asset
Cash
Total assets
Other segmental information
Additions to non current assets
Downward movements in property valuation
2012
Segment assets
Other financial asset
Cash
Total assets
Other segmental information
Additions to non current assets
Downward movements in property valuation
2013
£000
27,126
(5,894)
543
544
22,319
2012
£000
(2,665)
(6,135)
537
769
(7,494)
Managed
houses
£000
487,487
–
–
–
487,487
19,352
687
Tenanted
houses
£000
48,766
–
–
–
48,766
Segment
total
£000
536,253
–
–
–
536,253
Unallocated
Total
£000
6,788
7,111
4,749
6,123
24,771
£000
543,041
7,111
4,749
6,123
561,024
989
271
20,341
958
152
–
20,493
958
470,741
–
–
470,741
52,449
–
–
52,449
523,190
–
–
523,190
6,820
9,212
3,914
19,946
530,010
9,212
3,914
543,136
24,185
21,066
1,144
7,902
25,329
28,968
276
142
25,605
29,110
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 33
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
6. REVENUE
Sales of goods
Rental income
Revenue
Finance revenue
Revenue shown above is from continuing operations.
7. OPERATING COSTS BEFORE EXCEPTIONAL ITEMS
Changes in inventories of finished goods and raw materials
Raw materials, consumables and finished goods used
Employment costs (note 8(a))
Depreciation (note 18)
Other operating costs
Other operating costs include:
Operating lease rentals:
minimum lease payments
sublease payments
Auditor’s remuneration to main group auditor: audit of the group financial statements
audit of subsidiaries’ accounts
audit related assurance services
taxation advisory services
all other services
2013
£000
182,735
10,942
193,677
543
2012
£000
167,985
10,979
178,964
537
194,220
179,501
2013
£000
(113)
52,058
60,864
11,684
40,249
2012
£000
(199)
49,239
54,879
11,840
37,043
164,742
152,802
6,156
544
6,700
111
18
37
30
267
463
5,549
500
6,049
137
21
32
4
–
194
34 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
2013
£000
55,444
4,422
998
60,864
168
2012
£000
49,816
4,096
967
54,879
152
61,032
55,031
Total
excluding
pension
costs
2013
£
79,825
–
Total
excluding
pension
costs
2012
£
66,363
29,457
8. EMPLOYMENT
(a) Costs and employee numbers
Wages and salaries
Social security
Pension and health care schemes
Employment costs before exceptional items
Employment costs in exceptional items: capital gains tax on ESOP Trust allocated shares
The average monthly number of employees was 3,242 (2012: 2,985).
(b) Directors’ emoluments
Nicholas Bryan
Christopher Sandland
Stephen Goodyear
Torquil Sligo–Young
Peter Whitehead
Patrick Dardis
Rupert Clevely
Roger Lambert
David Page
Total 2013
Total 2012
Basic salary
and fees
£
79,825
–
Benefits
£
–
–
Bonus
£
–
–
301,809
21,557
152,980
476,346
526,585
122,530
26,542
87,456
236,528
216,581
216,106
19,579
102,327
338,012
372,575
224,775
2,685
112,560
340,020
364,350
218,714
24,915
51,000
294,629
440,449
37,740
37,740
–
–
–
–
37,740
37,740
36,333
36,333
1,239,239
95,278
506,323
1,840,840
1,236,362
102,664
750,000
2,089,026
Notes:
The amounts shown in the “Benefits” column relate primarily to the provision of private medical insurance and car related benefits.
Bonuses were receivable by the directors in connection with the performance targets they were set during the period. At the outset, it was agreed
that if any bonus were to be paid, half of it would be settled in shares, with the other half being paid in cash except to the extent that the director
elected to receive all or part of it in shares instead. For every share taken in place of cash, the director would be allowed to subscribe at nominal
value for one “matching” share. Each of Stephen Goodyear and Peter Whitehead has elected to take his cash element in shares and is therefore
entitled to subscribe for “matching” shares. None of the directors are generally free to sell any of the shares before the end of a restricted period
which ordinarily will end three years after the shares have been acquired or, if earlier, the date on which his employment terminates by reason of
illness, disability or redundancy. The “matching” shares are subject to satisfaction of a further condition relating to the extent to which the group’s
adjusted earnings per ordinary share in respect of the group’s continuing operations for the financial period ending on or around 31 March
2016 exceeds the same measure for the financial period ended 2 April 2012. Any of the shares acquired, whether “matching” or otherwise, are
liable to forfeiture in certain circumstances. The number of shares to be issued to each director in order to fulfil his entitlement will be calculated
with reference to the market price of the company’s A ordinary shares as shown in the Financial Times (on-line version) published on the date on
which the issue is made (which is expected to be around 17 June 2013). The amounts shown in the “Bonus” column reflect the cash value of the
bonuses receivable by the directors, excluding the cash value of any “matching” shares. The cash value of the “matching” shares to be awarded
to Stephen Goodyear and Peter Whitehead is £76,490 and £51,164 respectively.
Christopher Sandland retired during the prior period in July 2011.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 35
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
8. EMPLOYMENT (CONTINUED)
(c) Retirement benefits
The company operates one pension scheme, namely the Young & Co.’s Brewery, P.L.C. Pension Scheme. All individuals in the pension scheme
contribute to it, with contributions being at the rate of 5.0% of pensionable earnings. The pension scheme is a defined benefit scheme investing
largely in managed funds. As at 1 April 2013 only two directors, Peter Whitehead and Patrick Dardis, were accruing benefits under the pension
scheme in respect of qualifying service.
The company bears the cost of post retirement health care premia for certain employees and ex-employees.
The company accounts for retirement benefits in accordance with IAS 19. Detailed disclosures are set out in note 26.
1
Increase in accrued
pension during
the period
(excluding inflation)
£
3,937
2,699
2
Transfer value of
increase
(net of member
contributions)
£
78,211
42,642
3
Accumulated total
accrued pension
as at
1 April 2013
£
56,080
32,424
4
Transfer value of
accrued pension
benefits as at
2 April 2012
£
900,187
437,668
5
Transfer value of
accrued pension
benefits as at
1 April 2013
£
1,155,645
571,558
6
Increase in transfer
value during the period
(net of member
contributions)
£
248,589
127,020
Peter Whitehead
Patrick Dardis
Notes:
(i) The pension entitlement shown in column 3 is that which would be paid annually on retirement under the terms of the relevant director’s
service agreement based on service to 1 April 2013. As Peter Whitehead was appointed before 6 April 1997 he is entitled to a pension payable
without reduction at the earliest age permissible by HM Revenue & Customs; this has been allowed for in the calculation of his transfer values
shown above.
(ii) Stephen Goodyear began to draw his pension during the period ended 2 April 2012 and Torquil Sligo-Young began to draw his pension during the
period ended 29 March 2010. Neither of them therefore has any further defined benefit accrual and they have not therefore been included in the
above table.
(d) Profit sharing scheme
Share allocations made up to and including those for the company’s financial period that ended in 2 April 2005, which were based on a member’s
individual entitlement after deductions of income tax and national insurance, are held in the Ram Brewery Trust II. On retirement the member receives
their accrued entitlement to shares. If they leave the company’s employment before reaching normal retirement age they continue to receive the income
accruing to them by virtue of their membership of the scheme prior to them leaving, and their allocation to the date of leaving is held on their behalf
until normal retirement age.
The accrued entitlement to A shares under the scheme of each of the directors who served during the period is as follows (and there is no further
accrual): Stephen Goodyear (22,680), Torquil Sligo-Young (31,412), Peter Whitehead (20,816) and Patrick Dardis (6,696). None of Nicholas Bryan, Rupert
Clevely, Roger Lambert and David Page has an accrued entitlement under the scheme.
(e) Savings-related share option scheme
During the period the company introduced an approved savings-related share option scheme. All employees of the company, Geronimo Inns Limited
and Geronimo Airports Limited who had been continuously employed from 2 April 2010 were given the opportunity to join. After saving for a three-
year period (through deductions from net salary) scheme members can then buy A shares in the company if they choose to do so, at a discount to
the market price at the time the options were granted to them. The entitlement to A shares under the scheme of each of the directors who served
during the period (and of Edward Turner) is as follows:
Stephen Goodyear
Torquil Sligo-Young
Peter Whitehead
Patrick Dardis
Edward Turner
At
2 April 2012
Granted
during the period
At
1 April 2013
–
–
–
–
–
1,844
1,844
1,844
1,844
1,844
1,844
1,844
1,844
1,844
1,844
Exercise
price
(pence)
488
488
488
488
488
Exercisable
from
01.09.15
01.09.15
01.09.15
01.09.15
01.09.15
Exercisable
to
28.02.16
28.02.16
28.02.16
28.02.16
28.02.16
None of Nicholas Bryan, Rupert Clevely, Roger Lambert and David Page has an entitlement under the scheme.
The exercise price of 488p per share represented a 20% discount to the market price at the time of grant. This price was set in accordance with the
rules of the scheme approved by HM Revenue & Customs. There are no performance conditions other than continued employment.
36 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
9. EXCEPTIONAL ITEMS
Amounts included in operating profits:
Movement on the revaluation of properties (note 18)
Acquisition costs
Profit on sale of properties
Restructuring costs
Compensation to terminate leases
Capital gains tax on ESOP Trust allocated shares
Exceptional tax:
Movement on the revaluation of properties
Change in corporation tax rate
Tax attributable to above adjustments
Total exceptional items after tax
2013
£000
2012
£000
(958)
(217)
765
(552)
(679)
(168)
(29,110)
(489)
1,306
–
(382)
(152)
(1,809)
(28,827)
–
811
(228)
583
5,640
1,746
(39)
7,347
(1,226)
(21,480)
The movement on the revaluation of properties relates to the revaluation exercise which was completed during the period. The revaluation was
conducted at an individual pub level and identified a downward movement of £958,000 (2012: £29,110,000) which has been taken to the income
statement. The movement is split between land and buildings £228,000 (2012: £26,534,000) and fixtures and fittings £730,000 (2012: £2,576,000).
See note 5 for segmental information.
The acquisition costs include legal fees and stamp duty incurred on the purchase of the Cutty Sark (Greenwich) and the Narrow Boat (Islington). In
the prior period acquisitions costs related to the purchase of the freeholds for the Clarence (Whitehall), Fentiman Arms (Vauxhall) and the King’s Head
(Winchmore Hill).
The profit on sales of properties relates to the difference between the cash, less selling costs, received from the sale of the Plough Inn (Lambeth), Marble
Hill (Twickenham), Mitre (Richmond), Gorringe Park (Tooting), Chequers (Cassington), Prince of Wales (Merton) and the Old Anchor (Twickenham) and
the carrying value of the assets on the date of sale.
Restructuring costs relate to a reorganisation of the group’s head office functions. These are largely made up of severance costs and consultancy fees.
Compensation paid to terminate leases represents payments made to former tenants to enable properties to be moved into both the Young’s managed
house and Geronimo managed house operations.
The capital gains tax on ESOP Trust allocated shares relates to the shares held within the Ram Brewery Trust II on behalf of the closed profit sharing
scheme. A liability is recognised at each balance sheet date for the potential capital gains tax that could arise on the disposal of shares to the members
of the scheme on retirement.
In the prior period the tax on the movement on the revaluation of properties was separately disclosed due to its size and nature.
10. ADJUSTED PROFIT BEFORE TAX
The table below shows how adjusted group profit before tax has been arrived at. This alternative performance measure has been provided as the board
believes that it gives a useful additional indication of the group’s underlying performance. All the results below are from continuing operations.
Profit/(loss) before tax
Operating exceptional items (note 9)
2013
£000
22,319
1,809
2012
£000
(7,494)
28,827
24,128
21,333
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 37
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
11. FINANCE COSTS AND REVENUE
Bank loans and overdrafts
Finance lease interest
Finance costs
Interest receivable and unwinding of discounted deferred consideration
Net finance cost
12. TAXATION
Tax charged in the group income statement
Current tax
Current tax expense
Adjustment in respect of current tax of prior periods
Deferred tax
Movement on the revaluation of properties
Origination and reversal of temporary differences
Change in corporation tax rate
Adjustment in respect of deferred tax of prior periods
Tax expense/(credit)
Presented in the income statement as follows:
Taxation
Taxation on property revaluation
Tax expense/(credit)
Deferred tax in the group statement of comprehensive income
Property revaluation and disposals
Retirement benefit schemes
Interest rate swaps
Change in corporation tax rate
Tax (credit)/expense
Deferred tax in the group income statement
Property revaluation and disposals
Fair value gains on acquisition of subsidiaries
Capital allowances
Retirement benefit schemes
Other tax provisions
Share based payments
Derecognition of deferred tax on the sale of subsidiary
Utilisation of tax losses
Tax credit
2013
£000
5,852
42
5,894
(543)
5,351
2013
£000
5,719
(250)
5,469
–
854
(811)
(238)
(195)
2012
£000
6,093
42
6,135
(537)
5,598
2012
£000
4,825
(229)
4,596
(5,640)
875
(1,746)
(185)
(6,696)
5,274
(2,100)
5,274
–
5,274
3,540
(5,640)
(2,100)
(378)
(744)
(395)
(1,399)
47,344
(1,063)
(2,136)
(2,923)
(2,916)
41,222
795
(600)
(1,050)
578
63
(8)
27
–
(195)
(4,926)
(1,543)
(1,583)
858
72
–
–
426
(6,696)
In the prior period the group changed its accounting policy for property and equipment. The tax impact in relation to the downward movement was a
credit in the income statement of £5.6 million while the impact of the upward movement was a debit through the statement of comprehensive income
of £47.3 million. A deferred tax liability relating to fair value gains on acquisition of subsidiaries arose on the acquisition of Geronimo Group Limited on
16 December 2010.
38 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
A reconciliation of the tax expense/(credit) applicable to the profit/(loss) from operating activities before tax at the statutory rate to the actual tax
expense/(credit) at the group’s effective tax rate for the periods ended 1 April 2013 and 2 April 2012 respectively is as follows:
Profit/(loss) before tax from continuing operations
Total profit/(loss) before tax at corporation tax rate of 24% (2012: 26%)
Tax effects of:
Expenses not deductible for tax purposes
Recognition of property revaluation, rollover claim and other property movements
Non assessable income
Re-measurement of deferred tax – change in corporation tax rate
Derecognition of deferred tax on sale of subsidiary
Prior period adjustment – current tax
Prior period adjustment – deferred tax
Total tax expense/(credit)
2013
£000
2012
£000
22,319
(7,494)
5,357
(1,948)
778
723
(312)
(811)
27
(250)
(238)
7,988
(5,640)
(340)
(1,746)
–
(229)
(185)
5,274
(2,100)
During the period, as a result of the change in the UK corporation tax rate from 24% to 23% that was substantively enacted on 3 July 2012 and has
been effective from 1 April 2013, the relevant deferred tax balances have been re-measured. Deferred tax expected to reverse in the period ending
31 March 2014 and thereafter has been measured using the effective rate that will apply in the UK for the period of 23%.
Further reductions to the UK tax rate have been announced. The changes, which are expected to be enacted in Finance Bill 2013, propose to reduce
the rate to 21% from 1 April 2014 and 20% from 1 April 2015. The changes had not been substantively enacted at the balance sheet date and are not
therefore recognised in these financial statements.
13. DISCONTINUED OPERATIONS
In the prior period the group disposed of its entire 40% share in Wells & Young’s Brewing Company Limited (“Wells & Young’s”), its brewing associate.
The consideration receivable for the company’s shareholding was £15.1 million in cash of which £5.0 million remains outstanding at 1 April 2013.
This final instalment is due in February 2014. This deferred consideration has been discounted to its present value, £4,749,000, and is recognised
in the group’s balance sheet as “Other financial asset” within current assets (2012: £4,749,000 within current assets and £4,463,000 within non
current assets).
The discounted present value of these proceeds less the carrying amount of the investment in associate and disposal costs resulted in a loss on disposal
in the prior period of £1.7 million:
Cash consideration
Net assets disposed
Disposal costs
Loss on disposal of discontinued operations
The results of the discontinued operations, which have been included in the group income statement, were as follows:
Share of associate’s profit before exceptional items and tax
Share of associate’s exceptional items
Share of associate’s tax expense
Share of associate’s post tax result
Loss on disposal of discontinued operations
Tax on loss on disposal of discontinued operations
Loss for the period from discontinued operations
During the current period and the prior period Wells & Young’s contributed £nil to the group’s cash flows.
2012
£000
13,782
(15,455)
(60)
(1,733)
2012
£000
1,289
(401)
(272)
616
(1,733)
–
(1,117)
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 39
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
13. DISCONTINUED OPERATIONS (CONTINUED)
Investment in associate
Opening balance
Items charged directly to equity
Share of profit of associate
Release of stock provision
Disposal
Group
Company
2013
£000
–
–
–
–
–
–
2012
£000
15,273
(354)
616
(80)
(15,455)
–
2013
£000
–
–
–
–
–
–
2012
£000
11,303
–
–
–
(11,303)
–
14. BUSINESS COMBINATIONS
The group acquired the Cutty Sark (Greenwich) and Narrow Boat (Islington) in the current period. The aggregated fair value of the identifiable assets
and liabilities of the acquired businesses was property and equipment of £3.7 million and inventories of £nil. The group incurred £217,000 of costs
associated with the acquisitions which have been recorded as operating exceptional items.
There were no business combinations in the prior period.
15. DIVIDENDS ON EQUITY SHARES
Final dividend (previous period)
Interim dividend (current period)
2013
Pence
7.25
7.02
2012
Pence
6.90
6.68
14.27
13.58
2013
£000
3,497
3,385
6,882
2012
£000
3,328
3,221
6,549
The board is proposing a final dividend in respect of the period ended 1 April 2013 of 7.61p per share at a cost of £3,670,000. If approved it is
expected to be paid on 11 July 2013 to shareholders who are on the register of members at the close of business on 7 June 2013.
16. EARNINGS/(LOSS) PER ORDINARY SHARE
(a) Earnings/(loss)
Profit/(loss) from continuing operations
Loss from discontinued operations
2013
£000
16,988
–
2012
£000
(5,367)
(1,117)
Profit/(loss) attributable to shareholders of the parent
16,988
(6,484)
Profit/(loss) from continuing operations
Operating exceptional items
Tax on movement on revaluation of properties
Tax attributable to above adjustments
Change in corporation tax rate
Adjusted earnings after tax
Basic weighted average number of ordinary shares in issue
Dilutive potential ordinary shares from outstanding employee share options
Diluted weighted average number of shares
40 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
16,988
1,809
–
228
(811)
(5,367)
28,827
(5,640)
39
(1,746)
18,214
16,113
Number
Number
48,224,000
33,932
48,224,000
–
48,257,932
48,224,000
(b) Basic earnings per share
Basic from continuing operations
Effect of exceptional items and other adjustments listed opposite
Adjusted basic from continuing operations
Basic from continuing operations
Basic from discontinued operations
Basic
(c) Diluted earnings per share
Diluted from continuing operations
Effect of exceptional items and other adjustments listed opposite
Adjusted diluted from continuing operations
Diluted from continuing operations
Diluted from discontinued operations
Diluted
2013
Pence
35.23
2.54
37.77
35.23
–
2012
Pence
(11.13)
44.54
33.41
(11.13)
(2.32)
35.23
(13.45)
Pence
Pence
35.20
2.54
37.74
35.20
–
(11.13)
44.54
33.41
(11.13)
(2.32)
35.20
(13.45)
The basic earnings per share figure is calculated by dividing the net profit before the non controlling interest for the period attributable to ordinary
shareholders by the weighted average number of ordinary shares in issue during the period.
Diluted earnings per share have been calculated on a similar basis taking into account 33,932 (2012: nil) dilutive potential shares under the SAYE scheme.
Adjusted earnings per share are presented to eliminate the effect of the exceptional items and the tax attributable to those items on basic and diluted
earnings per share.
17. GOODWILL
Goodwill
Group
2013
£000
2012
£000
20,426
20,426
Goodwill of £20.4 million arose on the acquisition of Geronimo Group Limited and was allocated for impairment testing purposes to the Geronimo
group of cash generating units. The Geronimo group of cash generating units is the pubs trading under the Geronimo concept and falls within the
Geronimo managed houses segment.
The group tests the goodwill annually for impairment or more frequently if there are indicators that goodwill may have been impaired.
The recoverable amount is the value in use and exceeds the carrying value. The value in use is calculated using the three year business plan
approved by senior management. Cash flows beyond this period assume 2.0% growth (2012: 2.0%) which is below the industry long term average
growth rate. The pre-tax discount rate applied to cash flow projections is 8.5% (2012: 8.6%). The calculation is most sensitive to revenue assumptions
and the pre-tax discount rate, however senior management believes that the assumptions used are reasonable. The group has conducted a sensitivity
analysis on the impairment test and neither a 10% decline in revenue nor a 1% increase in the discount rate would lead to the impairment of the
goodwill in the current period.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 41
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
18. PROPERTY AND EQUIPMENT
Group
Fixtures,
fittings &
equipment
£000
72,975
13,200
–
(1,026)
–
(5,124)
–
80,025
11,564
303
(1,058)
(4,916)
–
Land &
buildings
£000
303,322
12,405
600
(7,799)
(777)
–
201,544
509,295
5,229
3,397
(3,011)
–
8,547
Total
£000
376,297
25,605
600
(8,825)
(777)
(5,124)
201,544
589,320
16,793
3,700
(4,069)
(4,916)
8,547
Company
Fixtures,
fittings &
equipment
£000
69,488
10,346
–
(1,026)
–
(5,124)
–
73,684
9,675
303
(876)
(4,916)
–
Land &
buildings
£000
252,652
11,773
600
(7,799)
(777)
–
201,544
457,993
4,867
3,397
(3,009)
–
5,450
Total
£000
322,140
22,119
600
(8,825)
(777)
(5,124)
201,544
531,677
14,542
3,700
(3,885)
(4,916)
5,450
Cost or valuation
At 4 April 2011
Additions
Transfer from other financial assets
Disposals
Transfer to assets held for sale
Fully depreciated assets
Revaluation*
At 2 April 2012
Additions
Business combinations
Disposals
Fully depreciated assets
Revaluation*
At 1 April 2013
523,457
85,918
609,375
468,698
77,870
546,568
Depreciation and impairment
At 4 April 2011
Depreciation charge
Disposals
Transfer to assets held for sale
Fully depreciated assets
Revaluation*
effect of downward movements in
property valuation
effect of upward movements in
property valuation
At 2 April 2012
Depreciation charge
Disposals
Fully depreciated assets
Revaluation*
effect of downward movements in
property valuation
effect of upward movements in
property valuation
18,095
2,650
(2,377)
(22)
–
37,998
9,190
(721)
–
(5,124)
56,093
11,840
(3,098)
(22)
(5,124)
17,472
1,036
(2,377)
(22)
–
37,531
7,970
(721)
–
(5,124)
55,003
9,006
(3,098)
(22)
(5,124)
26,534
2,576
29,110
24,877
2,365
27,242
(1,521)
–
(1,521)
(1,521)
–
(1,521)
43,359
2,172
(770)
–
43,919
9,512
(758)
(4,916)
87,278
11,684
(1,528)
(4,916)
39,465
1,255
(768)
–
42,021
8,037
(582)
(4,916)
81,486
9,292
(1,350)
(4,916)
2,559
817
3,376
1,270
609
1,879
(2,331)
(87)
(2,418)
(2,181)
–
(2,181)
At 1 April 2013
44,989
48,487
93,476
39,041
45,169
84,210
Net book value
At 4 April 2011
285,227
34,977
320,204
235,180
31,957
267,137
At 2 April 2012
465,936
36,106
502,042
418,528
31,663
450,191
At 1 April 2013
478,468
37,431
515,899
429,657
32,701
462,358
* The group’s net book value uplift due to revaluation of £7.6 million (2012: £174.0 million) comprises an upward movement of £8.6 million
(2012: £203.1 million) shown in the statements of comprehensive income net of a downward movement of £1.0 million (2012: £29.1 million)
in the income statement. The company’s net book value uplift due to revaluation of £5.8 million (2012: £175.9 million) comprises an upward
movement of £5.5 million (2012: £203.1 million) shown in the statements of comprehensive income plus a reversal of previous downward
revaluations of £0.3 million (2012: £27.2 million downward) in the income statement.
42 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
(a) Revaluation of property and equipment
A policy of valuing the group’s property estate was adopted in the prior period as described in note 3(f). The group’s freehold and leasehold land,
buildings, fixtures and fittings were valued at market value, as at 1 April 2013 and 3 October 2011, by CBRE Ltd, independent chartered surveyors
and by Andrew Cox MRICS, Director of Property and Tenancies and a Chartered Surveyor. The valuation was carried out in accordance with the
provisions of the RICS Valuation Standards (‘the Red Book’). The pubs were valued as fully equipped operational entities having regard to trading
potential and factors such as current and future projected income levels, taking account of the location, tenure, quality of the pub and recent market
transactions in the sector. Changes in these assumptions, such as the valuation basis applied in comparable market transactions or the income level
generated by a pub, could materially impact the valuations.
At 1 April 2013 had the property estate been carried at historic cost less accumulated depreciation and impairment losses their carrying amount
would have been approximately £336.1 million (2012: £327.8 million).
The revaluation surplus represents the amount by which the fair value of the estate exceeds its historic value.
A sensitivity analysis was conducted on the property estate to give an indication of the impact of movements in the most sensitive assumption, cash
flow. The analysis considers the single change with the other assumptions assumed to be unchanged. In practice changes in one assumption may be
accompanied by changes in another assumption. Changes in market values may also occur at the same time as the changes in assumptions and may
or may not offset them. This information should not be taken as a projection of likely future valuation movements. Decreasing the cash flows used in
the revaluation by 10% would decrease the valuation by £45.4 million (2012: £41.4 million). Increasing the cash flows used in the revaluation by 10%
would increase the valuation by £45.4 million (2012: £41.4 million).
(b) Assets held under finance leases
The net book value of assets held under finance leases was:
Land and buildings held under finance leases
(c) Capital commitments
2013
£000
9,209
2012
£000
9,311
Capital commitments not provided for in these financial statements and
for which contracts have been placed amounted to:
2,719
5,606
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 43
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
19. INVESTMENTS IN SUBSIDIARIES
Opening balance at cost
Additions
Disposals
Closing balance at cost
Group subsidiary undertakings
Geronimo Inns Limited
Geronimo Airports Limited
Company
2013
£000
24,254
–
–
2012
£000
25,620
24,254
(25,620)
24,254
24,254
Country of
incorporation
and registration
Country of
principal
operations
% of
equity and
votes held
England
England
England
England
100
100
On 25 February 2013 the group disposed of its entire 51% share in Sticky Fingers Food Limited (“Sticky Fingers”), its food production subsidiary.
Sticky Fingers was a non-core business and the disposal allows the group to focus on operating pubs. The disposal was for a consideration of £2 and
resulted in a loss on disposal of £23,000.
20. INVENTORIES
Finished goods and goods for resale
2,455
2,342
1,875
2013
£000
2012
£000
2013
£000
2012
£000
1,887
Group
Company
44 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
21. TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
Prepayments and accrued income
Amounts due from subsidiaries
Group
Company
2013
£000
1,438
417
2,406
–
4,261
2012
£000
1,340
512
2,593
2013
£000
1,282
393
1,824
2012
£000
1,210
363
2,046
–
26,230
28,410
4,445
29,729
32,029
Trade receivables are denominated in sterling, are non interest bearing and are generally on 0-20 days’ terms. The above carrying values are shown
net of a provision for impairment and equate to fair value.
At 1 April 2013 trade receivables with a nominal value of £587,000 (2012: £899,000) were impaired and fully provided for.
Movements in the provision for impairment of receivables were as follows:
Opening balance
Charge for period
Amounts written off
2013
£000
899
109
(421)
587
The amounts written off in the period were specific debts which proved irrecoverable.
At 1 April 2013 the analysis of trade receivables is as follows:
Neither
past due
Total
nor impaired
£000
1,438
1,340
£000
323
264
<31
days
£000
742
709
31-60
days
£000
264
154
61-90
days
£000
45
64
2013
2012
2012
£000
1,112
54
(267)
899
91+
days
£000
64
149
Of the trade receivables that are neither past due nor impaired by value 1.8% (2012: 8.7%) reflects new customers with no previous history of
default, 68.3% (2012: 89.1%) represents existing customers with no history of default and 29.9% (2012: 2.2%) represents existing customers with
some history of default.
22. NON CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Non current assets classified as held for sale
Group
Company
2013
£000
–
2012
£000
755
2013
£000
–
2012
£000
755
At 1 April 2013 no properties were classified as held for sale (2012: two). The two properties held as for sale at the end of the prior period were both
sold during the current period.
During the period no properties were transferred from property and equipment (2012: two) to non current assets classified as held for sale.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 45
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
23. TRADE AND OTHER PAYABLES
Trade payables
Other related parties: Ram Brewery Trust General Fund
Other tax and social security
Other creditors
Accruals and deferred income
Group
Company
2013
£000
8,428
–
5,520
5,706
4,502
2012
£000
9,859
–
5,551
4,739
5,991
2013
£000
8,370
325
5,191
5,228
3,994
2012
£000
9,304
325
5,249
4,118
5,260
24,156
26,140
23,108
24,256
All trade payables are payable on demand and the carrying values above equate to fair value.
24. CAPITAL MANAGEMENT AND FINANCIAL INSTRUMENTS
The group’s capital management objective is to maintain an optimal structure, measuring investment opportunities against returning capital to
shareholders, but with an appropriate level of gearing. This provides a platform from which the group can seek to maximise shareholder value. The
group monitors its capital using gearing ratios, net debt as a multiple of EBITDA and interest cover. The group finances the business with a mixture
of equity (note 27) and debt (note 29).
The group’s principal treasury objective is to manage financial risks and provide secure and competitively priced funding for the group’s activities.
When appropriate the group uses financial instruments and derivatives to manage these risks.
The borrowing requirements are met largely by bank debt and to a very small extent finance leases. Other sources of funding arise directly from
trading activities such as trade and other payables.
The main financial risks relate to interest rates, credit and liquidity. The board seeks to manage these in the following manner:
Interest rate risk
The objective is to minimise the group’s interest cost and provide protection from adverse movements in interest rates. The board does this by
maintaining a mix of debt at fixed and variable interest rates. Interest rate swaps are used to help manage this exposure by fixing interest rates whilst
matching the maturity profile and cash flows of the underlying debt. These swaps are designated as cash flow hedges.
The following table demonstrates the sensitivity of the group’s profit before tax to a change in interest rates with all other variables held constant.
Increase/
decrease in %
+1.0
–0.5
+1.0
–0.5
Effect on
profit
before tax
£000
(184)
92
(218)
109
2013
2012
Credit risk
The objective is to minimise the group’s credit risk. Credit risks include counterparties defaulting on their debts or other obligations which would impair
the group’s ability to recover the carrying value of that asset. The group has financial control policies which it follows before entering into arrangements
with a new counterparty or when there is a substantial change in the existing relationship. Any potential impairments are monitored and, where
appropriate, provision is made for any irrecoverable balances. The company is not considered to have any exposure to credit risk from amounts due
from subsidiaries.
Liquidity and cash flow risk
The objective is to ensure that the group has sufficient financial resources to develop its existing business and exploit opportunities as they arise. The
board manages liquidity risk by ensuring that the group’s debt profile is long dated, facilities are committed and the group does not rely unduly on
short term borrowings. The group’s borrowings are dependent on certain financial covenants being met. If these were breached funding could be
withdrawn leaving the group with insufficient working capital and if the group were unable to find other alternative sources of funding it may not be
possible to continue trading in its current form. The board is vigilant in managing the business, assessing and monitoring acquisitions and investments,
and forecasting the group’s profit and cash flows. The funding position of the group is continuously reviewed against the headroom in the group’s
borrowing facilities.
Other risks that the group faces are referred to in the principal risks and uncertainties section starting on page 14.
46 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
(a) Derivative financial instruments: interest rate swaps
Financial liability – interest rate swaps
Loss on cash flow hedge taken to equity
Group and company
2013
£000
2012
£000
(13,870)
(12,223)
(1,647)
(8,215)
The group has a number of interest rate swaps that fix future interest cash flows on the variable interest rate bank loans. These instruments result in
the group paying fixed interest rates on the notional amount for each swap’s life. The swaps are being used to hedge the exposure to changes in the
group’s cash flows on its variable rate loans due to changes in LIBOR. The secured loans and the interest rate swaps have the same critical terms over
their relevant period.
The duration of each swap, and its respective interest rates once combined with the bank’s margin and other costs, are detailed in part (b) of this note.
(b) Loans, borrowing, interest rates and fair values
Group and company
Term or
expiry date
Effective
interest rate
Period
rate fixed
Fair
value
2013
£000
Fair
value
2012
£000
Book
value
2013
£000
Secured
£20 million loan swapped into fixed rate
£30 million loan swapped into fixed rate
£50 million loan swapped into fixed rate
£50 million revolving credit facility
March 2018
March 2023
December 2013 to 2015
December 2015
5 years
4.58%
5.97%
10 years
4.51% 1 to 3 years
None
Variable
22,790
39,182
51,898
18,321
22,492
37,660
52,071
21,747
19,940
29,910
49,821
18,321
Book
value
2012
£000
19,916
29,873
49,747
21,747
Unsecured
Finance leases
Financial liabilities
As shown
Current borrowings
Non current borrowings
Financial liabilities
132,191
133,970 117,992
121,283
694
700
118,686
121,983
10,006
5
108,680
121,978
118,686
121,983
The secured borrowings are secured on the assets of the group.
The fair values of borrowings and interest rates derivatives are estimates based on prevailing market rates of interest and expected future cash flows
arising from those instruments.
Bank overdrafts
Bank overdrafts are used for day to day cash management. The group has a £5 million overdraft facility with interest linked to the base rate.
Bank loan
The group has a bilateral £50 million term loan with the Royal Bank of Scotland and a £50 million syndicated facility with the Royal Bank of Scotland
and Barclays. The bilateral is repayable as to £20 million on 28 March 2018 and as to £30 million on 28 March 2023. The syndicated loan is
repayable in two instalments of £10 million on 15 December 2013 and 15 December 2014 with a final £30 million repayment on 15 December
2015. Interest rate swaps have been entered into in respect of all these bank loans which results in the effective interest charge being fixed at the
rates disclosed above.
Revolving credit facility
The group has a £50 million revolving credit facility with the Royal Bank of Scotland and Barclays of which £18.5 million was drawn at the period
end. Final repayment of the total drawn down balance is due as one payment on 15 December 2015. This is a committed facility which permits
drawings of different amounts and periods. These drawings carry interest at a margin above LIBOR with a commitment payment on the undrawn
portions. Interest is payable at each renewal date.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 47
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
24. CAPITAL MANAGEMENT AND FINANCIAL INSTRUMENTS (CONTINUED)
(c) Maturity of the group’s financial liabilities and expiry of facilities
2013
Borrowings
Trade and other payables
Derivative financial instruments
2012
Borrowings
Trade and other payables
Derivative financial instruments
Maturity of financial liabilities
Between
one and
two years
£000
12,259
–
2,712
Between
two and
five years
£000
53,828
–
7,006
Within
one year
£000
12,713
13,948
2,712
After
five years
£000
52,320
–
7,628
Total
£000
131,120
13,948
20,058
29,373
14,971
60,834
59,948
165,126
Within
one year
£000
4,012
15,850
1,712
21,574
Between
one and
two years
£000
14,012
–
1,712
15,724
Between
two and
five years
£000
70,595
–
4,506
75,101
After
five years
£000
61,511
–
6,244
Total
£000
150,130
15,850
14,174
67,755
180,154
The above maturity table includes contractual gross undiscounted cash flows of the borrowings, related interest, net derivatives, finance leases, trade
payables and contractual accruals.
(d) Fair value hierarchy for instruments measured at fair value
Financial liabilities at fair value
Interest rate swaps
Financial liabilities at fair value
Interest rate swaps
Group and company
Fair value
2013
£000
Level 1
2013
£000
Level 2
2013
£000
Level 3
2013
£000
(13,870)
(13,870)
Fair value
2012
£000
(12,223)
(12,223)
–
–
(13,870)
(13,870)
–
–
Level 1
2012
£000
Level 2
2012
£000
Level 3
2012
£000
–
–
(12,223)
(12,223)
–
–
Level 1
Fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2
Fair values measured using inputs, other than quoted prices included within Level 1, that are observable for the asset or liability either directly
or indirectly.
Interest rate swaps are accounted for at their fair value based on market prices.
Level 3
Fair values measured using inputs for the asset or liability that are not based on observable market data.
(e) Financial assets
Financial assets of the group and the company are not included in this note because their book value approximates their carrying value.
48 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
25. DEFERRED TAX
Deferred tax assets
Interest rate swaps
Retirement benefit schemes
Decelerated capital allowances
Capital losses
Other provisions
Share based payments
Tax losses
Deferred tax liabilities
Rolled over gains and property revaluations
Fair value gains on acquisition of subsidiaries
Accelerated capital allowances
Group
Company
2013
£000
3,190
2,033
898
860
116
14
–
7,111
2012
£000
2,934
2,135
–
–
179
–
26
5,274
2013
£000
3,190
2,033
922
860
116
14
–
7,135
2012
£000
2,934
2,135
203
–
179
–
–
5,451
(52,078)
(6,303)
–
(52,607)
(6,903)
(152)
(51,850)
–
–
(52,607)
–
–
(58,381)
(59,662)
(51,850)
(52,607)
Net deferred tax liabilities
(51,270)
(54,388)
(44,715)
(47,156)
At 1 April 2013 deferred tax assets and deferred tax liabilities were presented separately on the face of the balance sheet. However, at 2 April 2012
these amounts were presented as net deferred tax liabilities.
The deferred tax assets and liabilities at the balance sheet date are calculated at the substantively enacted rate of 23%. Whilst detailed calculations
have not been prepared at this stage, it is estimated that the impact of the remaining annual corporation tax rate reductions from 23% to 20% would
be to reduce the value of the group’s net deferred tax liabilities at the balance sheet date by approximately £6,687,000 and to reduce the value of the
company’s net deferred tax liabilities by approximately £5,832,000.
The group has realised capital losses of £5,589,000 (2012: £6,252,000) which are available indefinitely to offset against future capital gains. Deferred
tax assets have not been recognised in respect of £1,946,000 (2012: £1,327,000) of these losses because at present it is unclear whether suitable
gains will arise in the foreseeable future to utilise these losses.
In addition the group has unrealised capital losses of £11,985,000 (2012: £10,236,000) of which £99,000 (2012: £1,375,000) have been recognised
and £11,886,000 (2012: £8,861,000) have not been recognised at present because it is uncertain whether these unrealised losses will be utilised.
The company has unrealised capital losses of £8,807,000 (2012: £7,131,000) of which £99,000 (2012: £1,375,000) have been recognised and
£8,708,000 (2012: £5,756,000) have not been recognised because it is uncertain whether these unrealised losses may be utilised.
26. RETIREMENT BENEFIT SCHEMES
The company operates one defined benefit pension scheme, namely the Young & Co.’s Brewery, P.L.C. Pension Scheme, a defined contribution
pension scheme and a post retirement health care scheme.
The contribution to the defined contribution scheme was £286,000 (2012: £227,000).
An independent qualified actuary has updated the most recent actuarial valuations at 5 April 2011 to take account of the requirements of IAS 19 in
order to assess the liabilities of the schemes as at 1 April 2013.
The employer contribution to the defined benefit scheme for the period ended 1 April 2013 was £2,478,000 (2012: £3,129,000) plus premiums of
£241,000 (2012: £232,000) to the post retirement health care scheme. The current arrangement as regards contribution rates is described in the
relevant Schedule of Contributions.
The defined benefit scheme is closed to new entrants. Consequently the current service cost will increase as the members of that scheme
approach retirement.
Future employee contribution rates are projected to be 5.0% of pensionable earnings. Future employer contribution rates are projected to be 18.0%
of pensionable earnings. The total contributions to the defined benefit scheme in the 2014 financial period are expected to be £2,500,000. The total
contributions to the post retirement health care scheme in the 2014 financial period are expected to be £250,000.
The pension scheme assets includes some of the company’s A shares with a fair value of £3,670,000 (2012: £4,498,000). There are no property assets
of the scheme occupied by the company.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 49
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
26. RETIREMENT BENEFIT SCHEMES (CONTINUED)
Assumptions
Pension
Health care
2013
%
3.40
3.40
2.40
4.50
3.40
N/A
2012
%
4.20
3.20
2.20
4.95
3.20
N/A
Rate of increase in salaries
Discretionary pension increases
Rate of revaluation of deferred pensions
Discount rate
Inflation
General medical expenses inflation
Mortality assumptions
The life expectancies underlying the valuation are as follows:
Current pensioners (at age 65) – males
Current pensioners (at age 65) – females
Future pensioners (at age 65) – males
Future pensioners (at age 65) – females
A one percentage point change in the assumed rate of increase in health care costs would have the following effects:
Effect on the aggregate service cost and interest cost
Effect on defined benefit obligation
Pension scheme and health care scheme assets, liabilities and expected rates of return
2013
%
N/A
N/A
N/A
4.50
3.40
9.00
2013
Years
22.7
25.1
24.6
27.0
2012
%
N/A
N/A
N/A
4.95
3.20
9.00
2012
Years
22.6
25.0
24.5
26.9
Increase
£000
Decrease
£000
25
521
(20)
(444)
Equities
Diversified growth fund
Absolute return
Corporate bonds
Insured pensions
Other
Total fair value of assets
Present value of retirement benefit liabilities
Scheme deficit
Group and company
Expected rates of return
2012
%
2013
%
Assets and liabilities
2012
£000
2013
£000
N/A
N/A
N/A
N/A
N/A
N/A
7.00
7.00
5.50
5.15
4.95
2.00
24,454
21,443
4,384
38,972
14,633
–
22,358
18,905
1,624
35,018
14,512
535
103,886
(112,727)
92,952
(101,242)
(8,841)
(8,290)
The overall expected rate of return of the scheme assets has been based on the average expected return for each asset class weighted by the
amount of assets in each class. As at 1 April 2013 the expected rate of return is not applicable due to the removal of the expected return on scheme
assets under IAS 19 Employee Benefits (Revised), effective for accounting periods beginning on or after 1 January 2013. The long term weighted
average rate of return on scheme assets at 2 April 2012 was 5.93%.
History of experience gains and losses
2013
£000
2012
£000
2011
£000
2010
£000
2009
£000
Fair value of scheme assets
Present value of defined benefit obligations
103,886
(112,727)
92,952
(101,242)
86,873
(94,465)
81,432
(95,553)
65,070
(76,823)
Deficit in the schemes
(8,841)
(8,290)
(7,592)
(14,121)
(11,753)
Experience (losses)/gains arising on scheme liabilities
Experience gains/(losses) arising on scheme assets
(2,006)
6,836
835
627
2,962
(262)
(365)
13,869
5,883
(16,973)
The cumulative amount of actuarial gains and losses recognised since 2 April 2006 in the statement of comprehensive income is a £19,958,000 loss
(2012: £16,856,000 loss). The directors are unable to determine how much of the pension scheme deficit of £5,898,000 recognised on transition to
IFRS and taken to equity is attributable to actuarial gains and losses since inception of this scheme. Consequently the directors are unable to determine
the amount of actuarial gains and losses that would have been recognised in the statement of comprehensive income before 2 April 2006.
50 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
Movement in scheme deficits in the period
2013
Health
care
scheme
£000
Pension
scheme
£000
Group and company
Total
£000
Pension
scheme
£000
(a) Changes in the present value of the pension schemes are as follows:
Opening deficit
Current service cost
Contributions
Other finance income/(cost)
Actuarial losses
(3,802)
(701)
2,478
760
(2,940)
(4,488)
(11)
241
(216)
(162)
(8,290)
(712)
2,719
544
(3,102)
(3,572)
(730)
3,129
986
(3,615)
2012
Health
care
scheme
£000
(4,020)
(10)
232
(217)
(473)
Total
£000
(7,592)
(740)
3,361
769
(4,088)
Closing deficit
(4,205)
(4,636)
(8,841)
(3,802)
(4,488)
(8,290)
(b) Recognised in the income statement
Current service cost included in operating costs
(701)
(11)
(712)
(730)
(10)
(740)
Expected return on pension scheme assets
Interest on pension liabilities
Other finance income/(charge)
5,471
(4,711)
760
–
(216)
(216)
5,471
(4,927)
5,926
(4,940)
544
986
–
(217)
(217)
(c) Recognised in statement of comprehensive income
Actual return less expected return on scheme assets
Experience gains/(losses) arising on the scheme liabilities
Changes in assumptions underlying the scheme liabilities
6,836
(2,051)
(7,725)
–
45
(207)
6,836
(2,006)
(7,932)
627
859
(5,101)
Actuarial losses recognised
(2,940)
(162)
(3,102)
(3,615)
–
(24)
(449)
(473)
5,926
(5,157)
769
627
835
(5,550)
(4,088)
(d) Movements in the present value of defined benefit obligations during the period
Opening defined benefit obligations
Current service cost
Interest on obligation
Contributions by scheme members
Actuarial losses on obligations
Benefits paid
(96,754)
(701)
(4,711)
(104)
(9,776)
3,955
(4,488)
(11)
(216)
–
(162)
241
(101,242)
(712)
(4,927)
(104)
(9,938)
4,196
(90,445)
(730)
(4,940)
(107)
(4,242)
3,710
(4,020)
(10)
(217)
–
(473)
232
(94,465)
(740)
(5,157)
(107)
(4,715)
3,942
Present value of scheme liabilities
(108,091)
(4,636)
(112,727)
(96,754)
(4,488)
(101,242)
(e) Change in fair value of scheme assets
Opening fair value of scheme assets
Expected return on scheme assets
Actuarial gain on scheme assets
Contributions by employer
Contributions by scheme members
Benefits paid
92,952
5,471
6,836
2,478
104
(3,955)
–
–
–
241
–
(241)
92,952
5,471
6,836
2,719
104
(4,196)
86,873
5,926
627
3,129
107
(3,710)
–
–
–
232
–
(232)
86,873
5,926
627
3,361
107
(3,942)
Fair value of scheme assets
103,886
–
103,886
92,952
–
92,952
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 51
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
26. RETIREMENT BENEFIT SCHEMES (CONTINUED)
The sensitivities regarding the principal assumptions used to measure the schemes liabilities are set out below. The illustrations consider the single
change shown with the other assumptions assumed to be unchanged. In practice changes in one assumption may be accompanied by offsetting
changes in another assumption. Changes in market values may also occur at the same time as the changes in assumptions and may or may not
offset them.
Assumption
Discount rate
Rate of inflation
Life expectations
Change in assumption
Increase/decrease by 0.5%
Increase/decrease by 0.5%
Increase by 1 year
Impact on scheme liabilities
Decrease/increase by 8.8%
Increase/decrease by 7.6%
Increase by 3.4%
27. SHARE CAPITAL AND RESERVES
Issued and fully paid shares
A shares of 12.5p each
Non voting shares of 12.5p each
2013 and 2012
2013 and 2012
Shares
29,064,000
19,160,000
48,224,000
£000
3,633
2,395
6,028
The two classes of shares are equal in all respects except that the non voting shares do not carry the right to receive notices of general meetings
or to attend, speak or vote at them.
28. SHARE AWARDS
During the current period the group introduced a Save-As-You-Earn (“SAYE”) scheme which has been approved by HM Revenue & Customs.
The scheme enables directors and eligible employees to acquire options over A shares of the company at a discount of up to 20% of their market
price at the time of granting using the proceeds of a related SAYE contract. All employees who have worked for the minimum qualifying period on
an invitation date are eligible to join the scheme. Options granted under the SAYE scheme are not subject to performance conditions other than
continued employment. These options are all equity settled.
SAYE options were granted over 130,679 A shares on 1 August 2012 at an exercise price of 488.0p per share. Subject to the participants remaining
in the employment of the group and making 36 monthly contributions, these options will be exercisable between September 2015 and February
2016. A charge of £33,000, valued using the Black-Scholes option pricing model, was made to the group and company income statement in respect
of these options in the period. As at 1 April 2013 options over 120,739 A shares remain outstanding.
52 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
29. NET CASH GENERATED FROM OPERATIONS AND ANALYSIS OF NET DEBT
Profit/(loss) before tax on continuing operations
Net finance cost
Other finance income
Operating profit/(loss) on continuing operations
Depreciation
Movement on revaluation of properties
Profit on sale of properties
Difference between pension service cost and cash contributions paid
Amounts due from subsidiaries waived
Share based payments
Provision for capital gains tax on ESOP Trust allocated shares
Movements in working capital
Inventories
Receivables
Payables
Group
Company
2013
£000
22,319
5,351
(544)
27,126
11,684
958
(765)
(2,007)
–
33
168
(113)
184
(2,150)
2012
£000
(7,494)
5,598
(769)
(2,665)
11,840
29,110
(1,306)
(2,621)
–
–
152
(119)
442
(232)
2013
£000
19,814
4,093
(544)
23,363
9,292
(302)
(765)
(2,007)
90
33
168
12
2,300
(1,390)
2012
£000
(13,335)
4,834
(769)
(9,270)
9,006
27,242
(1,306)
(2,621)
6,080
–
152
(63)
459
1,556
Net cash generated from operations
35,118
34,601
30,794
31,235
Analysis of net debt
Cash
Loan capital and finance leases
Net debt
Group
Company
2013
£000
2012
£000
2013
£000
2012
£000
6,123
(118,686)
3,914
(121,983)
4,938
(118,686)
2,577
(121,983)
(112,563)
(118,069)
(113,748)
(119,406)
30. RELATED PARTY TRANSACTIONS
Balances and transactions between the company and its wholly owned subsidiaries have been eliminated on consolidation and are not disclosed in
this note. These are on an arms’ length basis and disclosed in notes 5, 21 and 23.
Directors
Directors’ emoluments and retirement benefits are disclosed in notes 8(b) and (c). Directors’ shareholdings and interests are disclosed or referred to
on page 18 and in notes 8(d) and (e).
Rupert Clevely and his wife, Jo Clevely:
• reside from time to time, free of charge, in accommodation above one of the group’s pubs in London – the value of the benefit was £9,787
(2012: £9,050) and is included in the “Benefits” column for Rupert Clevely in note 8(b);
• are lessees of a property in London from which the group operates one of its pubs – they hold the property on trust for two companies within
the group jointly and, as part of that arrangement, those companies have agreed to indemnify Rupert and Jo Clevely in respect of certain liabilities
relating to the property and the lease under which it is held; and
• are entitled to be reimbursed for certain liabilities, costs and expenses that may be incurred by them pursuant to or in connection with certain pub
related guarantees given by them – the guarantees are not expected to be called on.
Rupert Clevely and four other members of his family own a 50% share of Rogers and Rufus Pty Limited, an Australian wine producer. That company
provides wine to the group for sale in its pubs via an intermediary wine supplier on an arm’s length basis. Goods purchased by the group totalled
£38,102 (2012: £54,011). No amount was outstanding at 1 April 2013 (2012: £nil).
Jo Clevely Design Limited, a company owned and controlled by Jo Clevely, provides interior design services for some of the group’s pubs. For these
services (and inclusive of expenses and reimbursement for items of furniture purchased on behalf of the group) that company has received £131,385
(2012: £202,713). £17,286 was outstanding at 1 April 2013 (2012: £20,580).
No other transactions requiring disclosure have been entered into with the directors.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 53
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
30. RELATED PARTY TRANSACTIONS (CONTINUED)
Former director
Roy Summers, a former non-executive director, has agreed to advise on the quality of the company’s own-brand beers brewed by the company’s
former associate, Wells & Young’s Brewing Company Limited, in Bedford, and also to assist with quality monitoring. For these services (and
inclusive of expenses) he has received £15,451 (2012: £7,854). £1,580 was outstanding at 1 April 2013 (2012: £nil).
Pension scheme and trusts
In 1959 the Ram Brewery Trust was established. It has two parts, namely:
• the General Fund. This holds assets and makes payments to or for the benefit of employees, but has not made any such payments in the
current period (2012: nil). It is managed by a corporate trustee, Ram Brewery Trustees Limited, none of the directors of which is a director of
the company. As at 1 April 2013, the General Fund held nil A shares (2012: nil).
• the Pension Fund (now renamed and known as the Young & Co.’s Brewery, P.L.C. Pension Scheme). This provides pensions and other benefits
to employees of the group and certain other individuals. It is managed by a corporate trustee, Young’s Pension Trustees Limited (“YPTL”).
Torquil Sligo-Young, a director of the company, and two other individuals, neither of whom is a director of the company, are the directors of
YPTL. As at 1 April 2013 the Young & Co.’s Brewery, P.L.C. Pension Scheme held 502,769 A shares (2012: 702,769), being 1.73% of the class.
In 2008 the Ram Brewery Trust II was established. It holds assets for the benefit of employees and former employees, principally reflecting their
accrued entitlement to A shares under the group’s now closed profit sharing scheme – see note 8(d). The shares are all fully vested and are
not therefore disclosed as an investment in own shares in the group’s financial statements. The Ram Brewery Trust II is managed by a corporate
trustee, RBT II Trustees Limited (“RBT II”). Torquil Sligo-Young, a director of the company, and Roy Summers, a former non-executive director of
the company, are the directors of RBT II. As at 1 April 2013 the trust held 719,956 A shares (2012: 762,284), being 2.48% of the class.
Key management
The group considers key management personnel to be solely the directors of the company as they are the only people with authority and
responsibility for planning, directing and controlling the activities of the group. The compensation provided to the directors is detailed in note 8.
Former majority owned subsidiary
On 25 February 2013 the group disposed of its 51% interest in Sticky Fingers Food Limited (“Sticky Fingers”), a supplier of food to the group
for sale in its pubs. The consideration for the disposal was £2. As part of the disposal the aggregate sum of £53,000 borrowed by Sticky Fingers
from Geronimo Inns Limited when the Sticky Fingers venture was set up in 2010 was rescheduled (over a five year period) and Sticky Fingers
was released from its obligation to re-pay the sum of £90,000 owed to the company.
Goods purchased by the group from Sticky Fingers up until the date of disposal totalled £510,815 (2012: £472,781). £49,951 was outstanding
at the date of disposal (2012: £57,321).
Until 25 February 2013 the group performed payroll and administration functions on behalf of Sticky Fingers. For these services the group
re-charged £266,298 (2012: £319,387). £38,430 was outstanding at the date of disposal (2012: £144,990).
Former associate
The group has agreed to purchase the majority of its drinks for its pub estate from its former associate, Wells & Young’s, at commercial market
prices. This arrangement is terminable on two year’s notice which may only be given by the group on or after 30 September 2013 (in respect
of wines and spirits) and on or after 30 September 2014 (in respect of beers and ciders). The group disposed of its entire 40% share in Wells &
Young’s in August 2011. Listed below are the transactions between the group and Wells & Young’s up until the date of disposal:
Purchase of beer, wines and spirits for resale by the group
Other charges made to the group
All transactions arise in the normal course of business on an arm’s length basis.
2012
£000
(10,450)
(336)
54 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
31. OBLIGATIONS UNDER LEASES
(a) Obligations under finance leases
Finance leases for property are for terms ranging from 50 to 999 years. Minimum lease payments for most leases are nominal amounts. Leases do not
have a purchase option but most are renewable at the lessee’s option at the end of the lease term. Equipment is leased over terms of up to five years.
Future minimum lease payments under finance leases are as follows:
Future minimum lease payments due:
Not later than one year
Later than one year and not later than five years
Later than five years
Less: finance charges allocated to future years
The present value of minimum lease payments is analysed as follows:
Not later than one year
Later than one year and not later than five years
Later than five years
Group
Company
2013
£000
2012
£000
2013
£000
47
190
2,708
2,945
(2,251)
47
190
2,755
2,992
(2,292)
47
190
2,708
2,945
(2,251)
2012
£000
47
190
2,755
2,992
(2,292)
694
700
694
700
6
27
661
694
5
25
670
700
6
27
661
694
5
25
670
700
Future minimum rentals receivable from non cancellable subleases on the above properties as at 1 April 2013 were £206,000 (2012: £1,248,000).
(b) Operating lease agreements where the group is lessee
Operating leases for property are for terms ranging from two to 50 years. Minimum lease payments are typically reviewed every five years and are
based on a percentage of turnover or a negotiated rate per square foot. Most property leases are renewable at the lessee’s option at the end of the
lease term. Equipment is leased over terms of up to five years.
Future minimum rentals payable under non cancellable operating leases are as follows:
Not later than one year
Later than one year and not later than five years
Later than five years
6,315
19,226
38,849
6,267
18,856
39,690
2,278
8,898
20,745
2,141
7,635
19,504
64,390
64,813
31,921
29,280
Future minimum rentals receivable from non cancellable subleases on the above properties as at 1 April 2013 were £821,000 (2012: £1,009,000).
(c) Operating lease agreements where the group is lessor
The group leases licensed properties to third party tenants. These non cancellable lease terms are over terms varying from one to 21 years.
Future minimum rentals receivable under non cancellable operating leases are as follows:
2,992
Not later than one year
4,913
Later than one year and not later than five years
7,665
Later than five years
3,179
4,749
8,164
2,992
4,913
7,665
3,179
4,749
8,164
15,570
16,092
15,570
16,092
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 55
NOTES TO TH E FI NANCIAL STATEM ENTS (CONTINUED)
32. POST BALANCE SHEET EVENTS
There were no post balance sheet events.
33. CONTINGENT ASSET
In a prior period, following the House of Lords’ ruling in the Condé Nast/Fleming cases (removing the three year limit on VAT reclaims) the company
lodged a claim for repayment of VAT on gaming machine receipts on the basis of fiscal discrimination. In a subsequent prior period the company made a
further claim for repayment of VAT on similar grounds. Both claims stand behind the Rank case on fiscal neutrality and gaming machines. The Rank case
was referred to the European Court of Justice (“ECJ”), which released its decision on 10 November 2011 confirming the key principles upon which Rank’s
case relied. The case has now been remitted to the First-tier Tribunal (“FTT”) to reconsider the evidence in line with the ECJ’s findings. Following the FTT
hearing and decision the matter is likely to be appealed to at least one other UK Court.
Management views the outcome of the company’s claims to be uncertain. In addition the company’s claims were based on management’s best
estimates from the information available and the company expects the valuation of the claim to be reviewed by HM Revenue & Customs before any
settlement is reached.
The group and the company have not recognised any revenue from the claims.
34. CONTINGENT LIABILITIES
There were no contingent liabilities at the current or prior period balance sheet date.
56 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
NOTICE OF M EETI NG
If you hold any A shares, this notice is important and requires your immediate attention. If you are in any doubt as to any aspect of the
proposals referred to in this notice or as to the action you should take, you should seek your own advice from a stockbroker, solicitor,
accountant or other professional adviser. If you have sold or otherwise transferred all of your shares, please pass this copy of the
annual report, and any proxy form and business reply envelope that came with it, to the purchaser or transferee, or to the person who
arranged the sale or transfer so they can pass it or them to the person who now holds the shares.
If you hold any A shares, you should have received a proxy form for use at the meeting. Guidance notes on how to complete it, and on other
matters, are given on the form itself and in the notes to this notice. Whether or not you propose to attend the meeting, please complete and
submit the proxy form. It must be received by Computershare Investor Services PLC by 11.30am on Sunday, 7 July 2013. Appointing a proxy does
not stop you from attending the meeting and voting. An admission card is attached to the proxy form; please bring this with you to the meeting.
If you do not hold any A shares, this notice is for information purposes only.
Notice is hereby given that the 124th annual general meeting of Young & Co.’s Brewery, P.L.C. (the “Company”) will be held in the Civic
Suite in Wandsworth Town Hall, Wandsworth High Street, Wandsworth, London SW18 2PU on Tuesday, 9 July 2013 at 11.30am for the
following purposes:
Ordinary resolutions
To consider and, if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions:
1. To receive the Company’s annual accounts for the financial year ended 1 April 2013, together with the directors’ report and the auditor’s
report on those accounts and that directors’ report.
2. To declare a final dividend of 7.61p per share for the financial year ended 1 April 2013.
3. That Ernst & Young LLP be, and is hereby, re-appointed as the Company’s auditor to hold office from the conclusion of this meeting until
the conclusion of the next general meeting of the Company at which the Company’s annual accounts and reports are laid in accordance
with section 437 of the Companies Act 2006.
4. That the directors be, and are hereby, authorised to fix the remuneration of the Company’s auditor.
5. That Nicholas Bryan be, and is hereby, re-appointed as a director.
6. That Stephen Goodyear be, and is hereby, re-appointed as a director.
7. That Patrick Dardis be, and is hereby, re-appointed as a director.
8. That Edward Turner be, and is hereby, re-appointed as a director.
9. That the Company and all companies that are subsidiaries of the Company at any time during the period for which this resolution has
effect be, and are hereby, authorised to:
(a) make political donations to political parties, not exceeding £50,000 in total;
(b) make political donations to political organisations other than political parties, not exceeding £50,000 in total; and
(c) incur political expenditure, not exceeding £50,000 in total;
in each case at any time during the period starting with the date this resolution is passed and ending at the end of next year’s annual
general meeting (or, if earlier, at the close of business on 30 September 2014) but the aggregate amount of political donations and political
expenditure that may be made and incurred by the Company and its subsidiaries pursuant to this authority must not exceed £50,000.
Note: for the purposes of this resolution, “political donation” has the meaning given in section 364 of the Companies Act 2006, “political
expenditure” has the meaning given in section 365 of the Companies Act 2006 and reference to a “political party” or to a “political
organisation” is to a party or to an organisation to which Part 14 of the Companies Act 2006 applies.
10. That the directors be, and are hereby, authorised to allot shares in the Company and to grant rights to subscribe for, or to convert any
security into, shares in the Company:
(a) up to a nominal amount of £2,009,333 (such amount to be reduced by the nominal amount allotted or granted under paragraph (b)
below in excess of such sum); and
(b) comprising equity securities (as defined in section 560(1) of the Companies Act 2006) up to a nominal amount of £4,018,666 (such
amount to be reduced by the nominal amount allotted or granted under paragraph (a) above) in connection with an offer by way of a
rights issue:
(i) to holders of ordinary shares in proportion (as nearly as may be practicable) to their existing holdings; and
(ii) to holders of other equity securities as required by the rights of those securities or as the directors otherwise consider necessary,
and so that the directors may impose any limits or restrictions and make any arrangements which they consider necessary or
appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the
laws of, any territory or any other matter,
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 57
NOTICE OF MEETING (CONTINUED)
such authorities to apply until the end of next year’s annual general meeting (or, if earlier, until the close of business on 30 September
2014) but, in each case, during this period the Company may make offers and enter into agreements which would, or might, require
shares to be allotted or rights to subscribe for, or to convert securities into, shares to be granted after the authority ends and the directors
may allot shares or grant rights to subscribe for, or to convert securities into, shares under any such offer or agreement as if the authority
had not ended.
Special resolutions
To consider and, if thought fit, to pass the following resolutions which will be proposed as special resolutions:
11. That if resolution 10 is passed, the directors be, and are hereby, given power to allot equity securities (as defined in section 560(1) of
the Companies Act 2006) for cash under the authorities given by that resolution and/or to sell ordinary shares held by the Company as
treasury shares for cash as if section 561 of the Companies Act 2006 did not apply to any such allotment or sale, such power to be limited:
(a) to the allotment of equity securities and sale of treasury shares for cash in connection with an offer of, or invitation to apply for, equity
securities (but in the case of the authority granted under paragraph (b) of resolution 10, by way of a rights issue only):
(i) to holders of ordinary shares in proportion (as nearly as may be practicable) to their existing holdings; and
(ii) to holders of other equity securities as required by the rights of those securities or as the directors otherwise consider necessary,
and so that the directors may impose any limits or restrictions and make any arrangements which they consider necessary or
appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the
laws of, any territory or any other matter; and
(b) in the case of the authority granted under paragraph (a) of resolution 10 and/or in the case of any sale of treasury shares for cash,
to the allotment (otherwise than under paragraph (a) above) of equity securities or sale of treasury shares up to a nominal amount
of £301,400,
such power to apply until the end of next year’s annual general meeting (or, if earlier, until the close of business on 30 September 2014)
but during this period the Company may make offers and enter into agreements which would, or might, require equity securities to be
allotted (and treasury shares to be sold) after the power ends and the directors may allot equity securities (and sell treasury shares) under
any such offer or agreement as if the power had not ended.
12. That the Company be, and is hereby, authorised for the purposes of section 701 of the Companies Act 2006 to make one or more
market purchases (as defined in section 693(4) of the Companies Act 2006) of its ordinary shares of 12.5p each (“Ordinary Shares”), such
authority to be limited:
(a) to a maximum number of 4,822,400 Ordinary Shares (which may be all A shares, all non-voting shares or a mix); and
(b) by the condition that, in each case exclusive of expenses, the minimum price which may be paid for an Ordinary Share is the nominal
amount of that share and the maximum price which may be paid for an Ordinary Share is an amount equal to five per cent. above the
average of the middle market quotations for that share as derived from the AIM appendix to the Daily Official List of the London Stock
Exchange for the five business days immediately preceding the day on which that share is contracted to be purchased,
such authority to apply until the end of next year’s annual general meeting (or, if earlier, until the close of business on 30 September
2014) but during this period the Company may enter into a contract to purchase Ordinary Shares which would, or might, be executed
wholly or partly after the authority ends and the Company may purchase Ordinary Shares pursuant to any such contract as if the
authority had not ended.
By order of the board
Anthony Schroeder
Company Secretary
22 May 2013
Young & Co.’s Brewery, P.L.C.
Registered office:
Riverside House,
26 Osiers Road,
Wandsworth,
London SW18 1NH
Registered in England and Wales No. 32762
58 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
Notes
Entitlement to attend, speak and vote at the meeting
To be entitled to attend, speak and vote at the meeting (and for the purpose of determining the number of votes you may cast), your
name must be entered in that part of the register of members relating to holders of A shares at 7am on Monday, 8 July 2013 (or, in the
event of any adjournment, at 7am on the day before the day of the adjourned meeting).
What you need to bring
If you come to the meeting, please bring with you the admission card attached to the proxy form.
Appointment of proxies
If you hold any A shares, you may appoint a proxy to exercise all or any of your rights to attend and to speak and vote on your behalf
at the meeting. You can do this by completing the proxy form which came with this document. If you did not receive a proxy form and
believe that you should have one, or if you require additional forms, please contact the Company’s registrars. To be valid, your proxy
form must be received by the Company’s registrars no later than 11.30am on Sunday, 7 July 2013.
Who to appoint as a proxy
A proxy does not have to be a member of the Company but must attend the meeting for your vote to be counted and to otherwise
represent you. Your proxy could be the chairman of the meeting, a director of the Company or someone you know personally who has
agreed to attend and represent you. If you appoint a proxy, you may still attend the meeting.
Multiple proxies
You may appoint more than one proxy in relation to the meeting provided each proxy is appointed to exercise the rights attached
to a different A share or different A shares held by you. A space has been included in the proxy form to allow you to specify the
number of A shares in respect of which that proxy is appointed. If you return the proxy form duly executed but leave this space
blank, you will be deemed to have appointed the proxy in respect of all of your holding of A shares. If you wish to appoint more
than one proxy in respect of your A shares, you should contact the Company for further proxy forms or photocopy the form as
required; you should also read the notes on the proxy form relating to the appointment of multiple proxies.
The following principles apply in relation to the appointment of multiple proxies:
(a) The Company will give effect to your intentions and include votes wherever and to the fullest extent possible.
(b) Where a proxy does not state the number of A shares to which it applies (a “blank proxy”) then, subject to the following principles where
more than one proxy is appointed, that proxy is deemed to have been appointed in relation to the total number of A shares registered
in your name (“your entire holding”). If there is a conflict between a blank proxy and a proxy which does state the number of A shares to
which it applies (a “specific proxy”), the specific proxy will be counted first, regardless of the time it was sent or received (on the basis that
as far as possible the conflicting forms of proxy should be judged to be in respect of different A shares) and remaining A shares will be
apportioned to the blank proxy (pro rata if there is more than one).
(c) Where there is more than one proxy appointed and the total number of A shares in respect of which proxies are appointed is no greater
than your entire holding, it is assumed that proxies are appointed in relation to different A shares, rather than that conflicting appointments
have been made in relation to the same A shares; that is, there is only assumed to be a conflict where the aggregate number of A shares in
respect of which proxies have been appointed exceeds your entire holding.
(d) When considering conflicting proxies, later proxies will prevail over earlier proxies, and which proxy is later will be determined on the basis
of which proxy is last sent (or, if the Company is unable to determine which is last sent, last received). Proxies in the same envelope will be
treated as sent and received at the same time to minimise the number of conflicting proxies.
(e) If conflicting proxies are sent or received at the same time in respect of (or deemed to be in respect of) your entire holding, none of them
will be treated as valid.
(f) Where the aggregate number of A shares in respect of which proxies are appointed exceeds your entire holding and it is not possible to
determine the order in which they were sent or received (or they were all sent or received at the same time), the Company’s registrars or the
Company will take steps to try to clarify the situation with you should time permit. If this is not possible, none of your proxies will be treated
as valid.
(g) If you appoint a proxy or proxies and then decide to attend the meeting in person and vote in person, then the vote in person will override
any proxy vote. If the vote in person is on a poll and is in respect of your entire holding then all proxy votes will be disregarded. If, however,
you vote at the meeting on a poll in respect of less than your entire holding, then if you indicate on your poll card that all proxies are to be
disregarded, that shall be the case; but if you do not specifically revoke proxies, then the vote in person will be treated in the same way as if it
were the last received proxy and earlier proxies will only be disregarded to the extent that to count them would result in the number of votes
being cast exceeding your entire holding.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 59
NOTICE OF MEETING (CONTINUED)
(h) In relation to paragraph (g), if you do not specifically revoke proxies, it will not be possible for the Company to determine the intentions of
you in this regard. However, in light of the aim to include votes wherever and to the fullest extent possible, it will be assumed that earlier
proxies should continue to apply to the fullest extent possible.
Changing proxy instructions
To change your proxy instructions, you need to submit a new proxy appointment – further copies can be obtained from the Company.
However, in doing so, you should be aware of the principles that apply to multiple proxies – see the note headed Multiple proxies. If you are
in any doubt as to what to do where you wish to change your proxy instruction, please contact the Company’s registrars or your stockbroker,
solicitor, accountant or other professional adviser.
Termination of proxy appointments
If you wish to revoke your proxy instruction, you must send to the Company’s registrars a signed hard copy notice clearly stating your
intention to revoke your proxy appointment. If you are a corporation, the revocation notice must be executed under your common seal or
signed on your behalf by an officer of you or an attorney for you. Any power of attorney or any other authority under which the revocation
notice is signed (or a notarially certified copy of such power or authority) must be included with the revocation notice. The revocation notice
must be received by the Company’s registrars before the start of the meeting. If you attempt to revoke your proxy appointment but the
revocation is received after the time specified then, subject as follows, your proxy appointment will remain valid. Appointing a proxy does not
stop you from attending the meeting and voting. If you appoint a proxy and attend the meeting, your proxy appointment will automatically
be terminated.
Multiple corporate representatives
If you are a corporation, you may appoint one or more corporate representatives who may exercise on your behalf all your powers as a member
provided they do not do so in relation to the same A shares.
Name and address of the Company’s registrars
The Company’s registrars are Computershare Investor Services PLC. They can be contacted at The Pavilions, Bridgwater Road,
Bristol, BS99 6ZZ.
Display documents
The following will be available for inspection at the Company’s registered office during normal business hours (Saturdays, Sundays and public
holidays excepted) from the date of this notice until 10am on the day of the meeting:
• copies of the executive directors’ service contracts; and
• copies of the letters of appointment of the non-executive directors.
After 10am on the day of the meeting, these documents will be available for inspection in the Civic Suite in Wandsworth Town Hall,
Wandsworth High Street, Wandsworth, London SW18 2PU until the end of the meeting.
Communication
Any address or number used for the purpose of sending or receiving documents or information by electronic means that is referred to in the
Company’s annual report 2013 or any proxy form for the Company’s 124th annual general meeting may not be used to communicate with the
Company for any purpose other than any expressly stated.
60 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
EXPLANATORY NOTES TO TH E NOTICE OF M EETI NG
Notice of the 124th annual general meeting of Young
& Co.’s Brewery, P.L.C. (the “Company”) to be held on
Tuesday, 9 July 2013 is set out on pages 57 to 60. The
directors consider that all the resolutions to be put to the
meeting are in the best interests of the Company and
its shareholders as a whole; accordingly, the Company’s
board of directors will be voting in favour of them and
unanimously recommends that all A shareholders do so
as well.
Resolutions 1 to 10 are ordinary resolutions; this means that
for each of those resolutions to be passed, more than half
of the votes cast must be in favour.
Resolution 1: annual accounts and reports
The directors have to lay copies of the Company’s annual
accounts, the directors’ report and the auditor’s report on those
accounts and that directors’ report before you at a general
meeting; this is a legal requirement.
Resolution 2: final dividend
An interim dividend of 7.02p per share was paid in December
2012. The directors are recommending a final dividend of 7.61p per
share for the year ended 1 April 2013, bringing the total dividend for
the year to 14.63p per share. Subject to approval being given, the
final dividend is expected to be paid on 11 July 2013 to shareholders
on the register at the close of business on 7 June 2013.
Resolution 3: re-appointment of auditor
An auditor is required to be appointed for each financial year
of the Company. Ernst & Young LLP, the Company’s current
auditor, has agreed to serve for the current financial year and its
re-appointment is therefore being proposed.
Resolution 4: auditor’s remuneration
In accordance with normal practice, the directors are asking for
your authority to determine the auditor’s remuneration.
Resolutions 5-8: re-appointments of directors
Each of Nicholas Bryan, Stephen Goodyear and Patrick Dardis will
be retiring automatically from the office of director at the meeting;
this is because he held that position at the last two annual general
meetings and did not retire at either of them. Edward Turner will
also be retiring automatically from the office of director at the
meeting; this is because he was appointed by the board since the
last annual general meeting. Each of these individuals is seeking
re-appointment and his brief biographical details are on page 13.
Resolution 9: political donations and expenditure
This resolution seeks renewal of the existing authority for the
Company and its subsidiaries to make or incur certain political
donations and political expenditure. Although there is no intention
to make or incur such donations or expenditure, the legislation
is very broadly drafted and may catch activities such as funding
seminars and other functions to which politicians are invited
and supporting certain bodies involved in policy review and law
reform. The authority given by this resolution will be capped at
£50,000 in total.
Resolution 10: general authority to allot
This resolution effectively seeks renewal of the directors’ existing
authority to allot shares and grant rights. Paragraph (a) of this
resolution would give the directors the authority to allot shares
or grant rights to subscribe for, or to convert any securities into,
shares up to an aggregate nominal amount equal to £2,009,333 –
this amount represents approximately one-third of the Company’s
issued share capital as at 21 May 2013 (but would be reduced
by the nominal amount of any shares allotted or rights granted
under paragraph (b) of this resolution in excess of £2,009,333).
In line with guidance issued by the Association of British Insurers,
paragraph (b) of this resolution would give the directors authority
to allot shares or grant rights to subscribe for, or to convert any
securities into, shares in connection with a rights issue in favour
of shareholders up to an aggregate nominal amount equal to
£4,018,666, as reduced by the nominal amount of any shares
allotted or rights granted under paragraph (a) of this resolution
- this amount (before any reduction) represents approximately
two-thirds of the Company’s issued share capital as at 21 May
2013. Therefore the maximum nominal amount of shares and
rights that may be allotted or granted under this resolution is
£4,018,666. The authorities sought under paragraphs (a) and (b) of
this resolution will expire at the end of next year’s annual general
meeting (or, if earlier, the close of business on 30 September
2014). The directors have no present intention of exercising
either of the authorities sought under this resolution other than in
respect of any one or more of the Company’s share schemes.
As at the date of the notice, no shares are held by the Company
in treasury.
Resolutions 11 and 12 are special resolutions; this means
that for each of those resolutions to be passed, at least
three-quarters of the votes cast must be in favour.
Resolution 11: general power to disapply
This resolution effectively seeks renewal of the directors’ existing
power to allot shares (or sell any shares which the Company elects
to hold in treasury) for cash without first offering them to existing
shareholders in proportion to their existing shareholdings. This
authority would be, similar to previous years, limited to allotments
or sales in connection with pre-emptive offers and offers to holders
of other equity securities if required by the rights of those shares
or as the directors otherwise consider necessary, or otherwise up
to an aggregate nominal amount of £301,400. This aggregate
nominal amount represents five per cent. of the Company’s
issued share capital as at 21 May 2013. The power sought under
this resolution will expire at the end of next year’s annual general
meeting (or, if earlier, the close of business on 30 September 2014).
Resolution 12: authority to undertake market purchases
of own shares
This resolution effectively seeks renewal of the Company’s existing
authority to make market purchases of not more than 4,822,400
of its shares, being no more than ten per cent. of its issued
share capital as at 21 May 2013. The authority sought under this
resolution will expire at the end of next year’s annual general
meeting (or, if earlier, the close of business on 30 September
2014). The directors have no present intention of exercising
the authority to make market purchases, however the authority
provides the flexibility to allow them to do so in the future. The
directors will exercise this authority only when to do so would
be in the best interests of the Company, and of its shareholders
generally, and could be expected to be earnings enhancing. Any
shares purchased pursuant to this authority will be held in treasury
or be cancelled. The minimum price, exclusive of expenses, which
may be paid for a share is its nominal value. The maximum price,
exclusive of expenses, which may be paid for a share is an amount
equal to 105% of the average of the middle market quotations
for that share for the five business days immediately preceding
the date of the purchase. As at 1 May 2013, there were options
outstanding over 119,892 A shares, representing 0.25 per cent of
the Company’s issued share capital at that date. If the Company
were to purchase its own shares to the fullest possible extent
of its existing authority and of the authority sought pursuant to
this resolution, these would then represent 0.31 per cent. of the
Company’s issued share capital. No warrants to subscribe for
shares are outstanding.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 61
FIVE YEAR REVI EW
2013
£000
2012
£000
2011
£000
2010
£000
2009
£000
Revenue
193,677
178,964
142,597
127,539
126,091
Operating profit before exceptional items
Operating exceptional items
Net finance costs and other finance income
Profit/(loss) before tax
Taxation
Profit/(loss) from continuing operations
(Loss)/profit from discontinued operation
28,935
(1,809)
(4,807)
22,319
(5,274)
17,045
–
26,162
(28,827)
(4,829)
(7,494)
2,100
(5,394)
(1,117)
21,746
(4,883)
(3,569)
13,294
2,555
15,849
1,964
20,307
(234)
(2,844)
17,229
(5,858)
11,371
1,147
20,546
(10,519)
(3,281)
6,746
(2,988)
3,758
(1,684)
Profit/(loss) for the period
17,045
(6,511)
17,813
12,518
2,074
Adjusted profit before tax
24,128
21,333
18,177
17,463
17,265
Net assets employed
Non current assets
Current assets and assets held for sale
Current liabilities
Non current liabilities
Financed by
Share capital
Reserves
543,436
526,931
356,503
277,506
276,992
17,588
(36,707)
16,205
(28,614)
9,362
(30,611)
(189,772)
(196,879)
(153,737)
10,174
(19,734)
(99,332)
8,760
(20,505)
(101,036)
334,545
317,643
181,517
168,614
164,211
6,028
6,028
6,028
6,028
6,028
328,517
311,657
175,504
162,586
158,183
Non controlling interest
–
(42)
(15)
–
–
334,545
317,643
181,517
168,614
164,211
Purchase of fixed assets and business combinations
20,493
25,605
78,614
10,819
24,487
Net debt
(112,563)
(118,069)
(122,615)
(62,632)
(65,690)
Per 12.5p ordinary share
Adjusted basic earnings from continuing operations
Basic earnings/(loss) from continuing operations
Dividends – paid in period
37.77
35.23
14.27
33.41
(11.13)
13.58
28.36
32.89
13.12
24.92
23.62
12.87
23.09
7.84
12.62
Pence
Pence
Pence
Pence
Pence
Gearing
33.6%
37.2%
67.6%
37.1%
40.0%
Average number of employees
3,242
2,985
2,335
2,059
2,084
62 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
SEN IOR PERSON N EL, COM M ITTEES AN D ADVISERS
Nominated adviser and
stockbroker
J.P. Morgan Securities plc
25 Bank Street
London E14 5JP
Solicitors
Slaughter and May
One Bunhill Row
London EC1Y 8YY
Wragge & Co
55 Colmore Row
Birmingham
B3 2AS
Directors
Nicholas Bryan, B.A., F.C.A.
Non-executive Chairman
Stephen Goodyear
Chief Executive
Torquil Sligo-Young
Human and Information Resources
Peter Whitehead, F.C.A.
Finance
Patrick Dardis
Retail
Edward Turner
Managing Director Geronimo Inns
Roger Lambert, M.A.
Non-executive Senior Independent
Director
David Page
Non-executive
Rupert Clevely
Non-executive
Company Secretary
Anthony Schroeder
Audit committee
Nicholas Bryan (Chairman)
Roger Lambert
David Page
Remuneration committee
David Page (Chairman)
Nicholas Bryan
Roger Lambert
Auditor
Ernst & Young LLP
1 More London Place
London SE1 2AF
Bankers
Royal Bank of Scotland Group plc
Corporate Banking London
280 Bishopsgate
London EC2M 4RB
Barclays Bank plc
1 Churchill Place
London E14 5HP
S HAR E H O LD E R I N F O R MATI O N
Registrar
Share dealing service
Proposed financial diary 2013
The company’s registrar is Computershare
J.P. Morgan Cazenove
5 June 2013
Investor Services PLC.
020 7588 2828
Ex-dividend date for final dividend
If you have questions about your
shareholding or if you require other
guidance (e.g. to notify a change of address
or to give instructions for dividends to be
paid directly into a bank account), please
contact Computershare.
The availability of this service should not be
7 June 2013
taken as a recommendation to deal.
Record date for final dividend
Shareholder offers
Details of shareholder discounts and offers
9 July 2013
Annual general meeting
are mailed to shareholders from time to
11 July 2013
time. Any shareholder who does not wish
Payment of final dividend
All requests to amend account details must
be made in writing to:
to receive details of such offers should
write to the Company Secretary at the
Computershare Investor Services PLC
registered office.
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
You can also contact Computershare by
telephone on 0870 707 1420.
Shareholders can manage their Young’s
shareholding online at:
www.investorcentre.co.uk
Registered office and
company number
Riverside House
26 Osiers Road
Wandsworth
London SW18 1NH
Registered number: 32762
Further information
Please visit www.youngs.co.uk
21 November 2013
Interim results announcement
27 November 2013
Ex-dividend date for interim dividend
29 November 2013
Record date for interim dividend
13 December 2013
Payment of interim dividend
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013 63
YOU NG’S PU BS AN D HOTELS
Balham
Devonshire
Grove
Nightingale
Barnes
Bull’s Head
Coach & Horses
White Hart
Barnet
Lord Nelson
Battersea
Duke of Cambridge
Northcote
Plough
Prince Albert
Bayswater
Mitre
Beddington
Plough
Betchworth
Dolphin
Blindley Heath
Red Barn
Bloomsbury
Calthorpe Arms
Lamb
Bognor Regis
Waverley
Borough Market
Bunch of Grapes
Wheatsheaf
Bow
Coborn Arms
Crown
Bradford-on-Avon
Bunch of Grapes
Brighton
Seven Stars
Bristol
Bristol Ram
Highbury Vaults
Horts
Rope Walk
Brixton
Grand Union
Broadway,
Nr Illminster
Bell Inn
T
T
G
G
G
T
G
T
T
T
T
T
Bromley
Two Doves
Burnham-on-Sea
Dunstan House Inn
Camberwell
Grand Union
Camden
Spread Eagle
Carshalton
Greyhound
Castle Cary
Horse Pond
Catford
Catford Ram
Chelmsford
O’Connor’s
Riverside Inn
Chelsea
Builder’s Arms
Chelsea Ram
Cooper’s Arms
Hollywood Arms
King’s Arms
Phoenix
Surprise
Chertsey
Crown Hotel
Chichester
Crown & Anchor
Chislehurst
Bull’s Head Hotel
City of London
Albion
Boisdales
Dirty Dick’s
Elephant
Lamb Tavern
Master Gunner
Oyster Shed
Paternoster
Three Lords
White Horse
Clapham Common
Windmill on
the Common
Clapton
Princess of Wales
Claygate
Foley
T
H
T
H
T
T
T
H
G
G
G
G
G
H
H
T
G
G
H
G
H
64 YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2013
T
T
T
T
T
T
T
T
T
T
T
T
H
T
H
Clerkenwell
Sekforde Arms
Congresbury
Old Inn
Covent Garden
Marquess of Anglesey
Croydon
Dog & Bull
Tamworth Arms
Dartford
Court House
Malt Shovel
Dorking
Falkland Arms
Old House at Home
Dulwich
Dulwich Wood House
Ealing
Grange
Earlsfield
Halfway House
Leather Bottle
East Grinstead
Ship
East Sheen
Hare & Hounds
Effingham
Plough
Emsworth
Sussex Brewery
Epsom
King’s Arms
Rising Sun
Esher
Bear Inn
Euston
Square Tavern
Exeter
City Gate
Double Locks
Exmouth
Grove
Farnborough
Rose & Crown
Fetcham
Bell
Key
Young’s managed house unless marked
Tenanted
Geronimo
Hotel
T
G
H
Fitzrovia
Adam & Eve
One Tun
Fulham
Cock Tavern
Duke on the Green
Waterside
Greenford
Bridge Hotel
Greenwich
Cutty Sark
Richard the First
Hammersmith
Brook Green Hotel
Hammersmith Ram
Old Ship
Thatched House
Hampstead
Flask
Roebuck
Harlesden
Grand Junction Arms
Heathrow Airport
Five Tuns
Three Bells
Tin Goose
Hendon
Beaufort
Greyhound
Hindon
Lamb Inn
Isleworth
Castle
Coach & Horses
Islington
Castle
Duchess of Kent
Marquess Tavern
Narrow Boat
Kensington
Britannia
Curtains Up
Duke of Clarence
Kentish Town
Bull & Gate
Lion & Unicorn
Kew
Coach & Horses
Keynsham
Lock Keeper
G
H
H
T
G
G
G
T
T
T
G
G
G
G
G
H
Wandsworth
Alma
Armoury
Brewers Inn
County Arms
East Hill
Gardeners’ Arms
Grand Union
Grapes
Old Sergeant
Pig & Whistle
Queen Adelaide
Ship
Spread Eagle
Waterfront
Westminster
Buckingham Arms
Clarence
Morpeth Arms
Phoenix
Royal Oak
Weybridge
Hand & Spear
Wimbledon
Alexandra
Bayee Village
Crooked Billet
Dog & Fox
Fire Stables
Hand in Hand
Rose & Crown
Winchmore Hill
Kings Head
Witley
White Hart
Woolwich
Dial Arch
Wrington
Plough Inn
H
T
H
G
T
T
T
T
T
T
G
G
T
T
H
G
T
T
Kilburn
Queen’s Arms
Kingston
Albert
Bishop out of Residence
Grey Horse
Spring Grove
Lambeth
Surprise
Leatherhead
Penny Black
Lee
Crown
Lingfield
Greyhound
Littleton-on-Severn
White Hart
Maida Vale
Prince Alfred
Marylebone
Lord Wargrave
Mayfair
Guinea
Windmill
Mitcham
King’s Arms
Mortlake
Jolly Gardeners
Norwood
Hope
Railway Bell
T
T
T
T
T
T
T
T
T
Plumpton Green
Fountain Inn
Primrose Hill
Queens
Putney
Boathouse
Coat and Badge
Duke’s Head
Green Man
Half Moon
Spotted Horse
Radlett
Red Lion Hotel
Redhill
Home Cottage
William IV
Richmond
Lass O’Richmond Hill
Marlborough
Old Ship
Orange Tree
Red Cow
Shaftesbury
Waterman’s Arms
White Cross
Roehampton
Angel
King’s Head
Rotherhithe
Ship
St Pancras Station
Betjeman Arms
Shaftesbury
Mitre
Notting Hill
Duke of Wellington
Elgin
G
Shepherd’s Bush
Bull (Westfield)
Eagle
Oxford
Angel & Greyhound
King’s Arms
Sherfield-on-Loddon
White Hart
Oxshott
Bear
Paddington
Porchester
Peckham Rye
Clock House
Pimlico
Fox & Hounds
Rising Sun
T
T
Sherston
Rattlebone
Sidmouth
Swan
Somerton
Unicorn
Southampton
Mavericks
T
G
G
H
T
T
T
T
T
G
G
G
T
T
T
T
Southwark
Founders’ Arms
Mulberry Bush
Prince William Henry
Staines
Bells
Stepney
Queen’s Head
Stockwell
Trinity Arms
Stonebridge
Royal Oak
Stratford
Cow (Westfield)
Streatham
Pied Bull
Surbiton
Black Lion
Victoria
Waggon & Horses
Sutton
Lord Nelson
New Town
Robin Hood
Teddington
Abercorn Arms
Thornton Heath
Lord Napier
Railway Telegraph
Tooting
Castle
Tufnell Park
Lord Palmerston
Twickenham
Alexander Pope
Vauxhall
Fentiman Arms
Riverside
Wallington
Duke’s Head
Walton-on-Thames
Royal George
Swan
Walton-on-the-Hill
Chequers
T
T
T
T
G
T
T
T
T
T
T
T
T
G
H
G
H
T
Young & Co.’s Brewery, P.L.C.
Riverside House, 26 Osiers Road
Wandsworth, London SW18 1NH
Telephone: 020 8875 7000
Fax: 020 8875 7100
www.youngs.co.uk
Registered in England number 32762