T H E H E A RT O F YO U R C O M M U N I T Y
YO U N G ’ S A N N U A L R E P O RT
FOR THE 52 WEEKS ENDED 30 MARCH 2015
We are focused on developing and growing an estate of
premium pubs, primarily in London and the home counties
with an emphasis on managed operations.
We will continue to invest in our estate to maintain our
premium position and continue to look to acquire further
managed houses, either as packages or individual pubs.
C O N T E N T S
STRATEGIC REPORT
CHAIRMAN’S STATEMENT
CHIEF ExECUTIvE’S REvIEw
HOw wE PERFORMEd
PRINCIPAL RISkS ANd UNCERTAINTIES
3
5
6
8
FINANCIAL STATEMENTS
INdEPENdENT AUdITOR’S REPORT
GROUP INCOME STATEMENT
23
24
STATEMENTS OF COMPREHENSIvE INCOME 25
BALANCE SHEETS
BUSINESS ANd FINANCIAL REvIEw
10
STATEMENTS OF CASH FLOw
dIRECTORS’ REPORT
OUR BOARd
COMMITTEES
OTHER dISCLOSURES
PREPARATION ANd dISCLAIMER
16
17
21
22
GROUP STATEMENT OF CHANGES
IN EqUITY
PARENT COMPANY STATEMENT
OF CHANGES IN EqUITY
NOTES TO THE FINANCIAL STATEMENTS
FIvE YEAR REvIEw
SHAREHOLdER INFORMATION
NOTICE OF MEETING
ExPLANATORY NOTES TO THE NOTICE
OF MEETING
YOUNG’S PUBS ANd HOTELS
SENIOR PERSONNEL, COMMITTEES
ANd AdvISERS
SHAREHOLdER INFORMATION
26
27
28
29
30
60
61
65
66
68
68
F I N A N C I A L H I G H L I G H T S
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
2015
£m
2014
£m
%
CHANGE
REV ENUE
227.0
210.8
+7.7
ADJUSTED OPERATING PROFIT (1)
OPERATING PROFIT
ADJUSTED PROFIT BEFORE TAX (1)
PROFIT BEFORE TAX
37.4
41.5
32.0
36.1
33.2
+12.7
32.6
+27.3
27.2
+17.6
26.6
+35.7
ADJUSTED BASIC EARNINGS PER SHARE (1) 50.62p
42.88p
+18.1
BASIC EARNINGS PER SHARE
55.17p
45.78p
+20.5
DIVIDEND PER SHARE
(interim and recommended final)
16.46p
15.52p
+6.1
NET ASSETS PER SHARE (2)
£8.40
£7.86
+6.9
All of the results above are from continuing operations.
(1) Reference to an “adjusted” item means that item has been adjusted to exclude exceptional items (see notes 9 and 10).
(2) 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 2015
1
Fox & Anchor
(Smithfield Market)
2
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
C H A I r mA N ’ S S TAT e m e N T
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Nicholas Bryan
Chairman
+
7.7%
Revenue
+
6.5%
managed house
like-for-like revenue
+
17.6%
Adjusted profit
before tax
Our clear strategy
of maintaining and
operating a premium
well-invested pub
estate, focussed on
London and the south
east, continues to
bear fruit.
This year, total revenue grew by 7.7%,
as our core business, in particular,
continued to prosper. On the back of
this increased revenue and a strong
operating performance, profit before
tax increased by 35.7% to £36.1 million
and once adjusted for exceptional items
increased by 17.6% to £32.0 million.
importantly, all three of our formats
– Young’s, Geronimo, and the Ram
Pub Company, which comprises our
tenanted operation – are contributing
to this growth.
This year we invested a total of £50.9
million in our pubs and employed 139
more people.
We have added eight pubs, 76
bedrooms and have continued to
enhance our existing estate. These
investments will provide a solid
foundation on which to build next
year’s performance. The business, as
ever, remains conservatively financed
with net debt of £129.0 million (2014:
£112.0 million) being 2.47 times
EBiTDA (2014: 2.45 times).
We were pleased to see that march’s
Budget cut beer duty for the third
successive year. Such support increases
our ability to invest for growth, and we
hope that the Government will continue
to recognise the important part the
British pub plays in the UK economy.
in January we welcomed Trish Corzine
to our board, as a non-executive
director. Trish has excellent credentials,
bringing with her a wide-ranging
knowledge of the hospitality and leisure
sector having spent the majority of
her career in the restaurant industry,
latterly with The Restaurant Group plc
where she spent 20 years, nine as an
executive director responsible for their
concessions business.
We recently announced Rupert Clevely’s
retirement as a non-executive director.
On behalf of the Board, i would like to
thank him for the excellent job he did in
leading Geronimo during its integration
into Young’s. We are also grateful for his
contribution as a non-exec following his
stepping down as an executive director
in the early part of 2013. in addition
David Page will be retiring from the
Board after seven years at the end of
our forthcoming AGm. We would like
to express our gratitude to David for
the insight, guidance and good humour
that he has provided over many years
on the Board. We wish them both well.
We are a highly focussed successful
pub company but, above all, we remain
a people business, relying heavily on
the dedication, enthusiasm, boundless
energy and creativity of almost 3,500
people working with us to exceed
the expectations of our discerning
customers on a daily basis. The quality
of the Young’s team makes me very
proud and, together with my colleagues
on the Board, i would like to express
my thanks for the work they have done
during the year in delivering these
excellent results. As a consequence
the Board is recommending, for the
eighteenth consecutive year, an increase
in the final dividend, this time by 6.1%
to 8.56 pence, resulting in a total
dividend for the year of 16.46 pence
(2014: 15.52 pence).
N I C H O L AS B RYAN
Chairman
20 may 2015
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
3
Coborn
(Bow)
4
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
C H I e F e X e C U T I V e ’ S r e V I e W
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
I’m pleased to report
on another successful
year for Young’s
with profit before
tax up 35.7% and
once adjusted for
exceptional items by
17.6%. Adjusted basic
earnings per share
increased 18.1% to
50.62 pence.
This profit increase was created by
the combination of strong revenue
growth and an improving operating
performance driven by operational
excellence and cost discipline.
Revenue was up 7.7% to £227.0 million,
primarily the result of an industry
leading like-for-like performance, up
6.5%, from our managed houses.
This represents the fourth year of
consistently high managed house
like-for-like sales growth, following
increases of 6.0%, 4.6% and 6.7%
in the previous three years. Adjusted
operating profit increased 12.7%
to £37.4 million as a result of both
the sales performance and an
improved margin.
Well-invested, well-
positioned and performing
well year after year
Our three distinct formats, Young’s
and Geronimo, which comprise our
managed house division, and the
Ram Pub Company, our tenanted
division, are all growing well. in each
market, our absolute and like-for-like
performance was underpinned by:
our continued investment in growth
projects; strong operational delivery;
focus on our London and south east
heartland and our clear positioning at
the premium end of the market; not
to mention a warm and dry summer
last year.
At the year-end we had 166 managed
pubs (including 22 hotels) and 80
tenancies, spanning a mixture of vibrant
London destinations including Borough
market, Covent Garden, mayfair,
the Southbank and Westminster in
central London alongside affluent
London neighbourhoods such as
islington, Richmond, Wandsworth and
Wimbledon. in turn, these locations are
complemented by pubs in picturesque
cities and market towns like Stow on
the Wold, Shaftesbury, Chichester
and Guildford. Amidst this variety, the
common strand remains premium,
well-invested pubs which seek to play
a pivotal role in their communities,
run by teams who maintain traditional
values in an environment that appeals
to today’s consumers.
We invested £24.3 million in
acquisitions. in the summer we acquired
the Fox & Anchor pub and hotel in
Smithfield market and the White
Bear in Kennington. in October we
purchased the 580 Group for £10.4
million, adding four large London pubs
in attractive locations where we were
looking to grow our presence; all are
performing excellently. in January we
acquired the Bell at Stow, another pub
and hotel, in the heart of the Cotswolds
and the Trafalgar Arms in Tooting,
which is due to open in early autumn
after an extensive redevelopment.
Over the course of the year, we also
invested £26.3 million in our existing
estate. As part of our strategy to
maximise the potential of our pubs
and to develop, where appropriate,
a premium, boutique hotel offering,
we have added 76 bedrooms and
undertaken some transformative
developments elsewhere.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
5
Stephen Goodyear
Chief Executive
129
(2014: 128)
37
(2014: 35)
CYAN
MAGENTA
YELLOW
BLACK
SCALE MM: THIS RULER MEASURES 100MM WHEN ARTWORK IS 100%
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S P E C I A L I N S T R U C T I O N S
I M A G E S I N A / W
P R I N T C O L O U R S
CLIENT
CONTACT
JOB NUMBER
PROJECT
DESIGN
DESIGNER / ARTWORKER
PRODUCTION CONTACT
AW APPLICATION
COLOUR PROFILE
DATE
1
ARTWORK
VERSION No.
Young’s
Gill McLaren
YOU145/05
Ram Pub Company
Full Colour
SL/GH
Christie Nelson
Illustrator CS5.1
jkr-operations (FOGRA39)
13/05/14
80
PL EA SE N OT E IF VIEWI NG TH IS A RT WOR K A S A PD F IT M A Y N OT
B E T O SC A LE. TH E S CA L E OPP OSIT E WIL L GIV E A N IN D ICA T ION
OF T HE RE DU C TIO N
N.B. The colours on this artwork run out are for colour indication only.
Refer to listed Pantone (PMS) specification or attached swatches
where applicable for true colour representation.
All artwork is approved by jkr as of the date given.
Please double check ALL details with client prior to final production.
ANY changes made after this date are the responsibility of the client.
A/C management
Production
P L E A S E R E A D
Date
D ate
1 00
90
70
80
60
(2014: 79)
F O N T S U S E D I N A / W
• HELVETICA LT BOLD (LEGEND)
• DELTA
Date
H o W W e p e r F o r m e d
We measure the development, performance and position of our business against a number of key indicators.
Revenue £m
This is our total group revenue,
including both managed and tenanted
businesses.
227.0
210.8
193.7
Like for like revenue %
This is our revenue growth for this
period compared with the previous
period for our managed pubs and
hotels that traded throughout
both periods.
6.7
6.5
4.6
7
6
5
4
3
2
1
0
RevPAR £
This is our revenue per available
bedroom; it is the average room rate
achieved multiplied by the occupancy
percentage.
58
56
54
52
50
48
46
56.82
52.02
49.26
2013
2014
2015
2013
2014
2015
2013
2014
2015
Adjusted EBITDA £m
This is our adjusted earnings before
interest, taxes, depreciation and
amortisation.
Adjusted profit before tax £m
This is our profit before tax on
continuing operations only, adjusted
to exclude any exceptional items for
the group.
Adjusted earnings per share (pence)
This is our adjusted profit before tax,
but after tax has been deducted,
divided by the weighted average
number of ordinary shares in issue.
52.2
45.7
39.8
32.0
27.2
23.2
35
30
25
20
15
10
5
55
50
45
40
35
30
25
50.62
42.88
36.34
2013
2014
2015
2013
2014
2015
2013
2014
2015
Gearing %
This is our net debt divided by our net
assets (expressed as a percentage).
Interest cover (times)
This is our adjusted operating profit
divided by our finance costs.
Recycling (tonnes)
This is the amount of waste we recycle
and divert from landfill.
33.7
29.5
31.7
8
7
6
5
4
3
2
5.6
4.9
7.2
5,000
4,000
3,000
2,000
2,313
1,000
4,481
3,065
2013
2014
2015
2013
2014
2015
2013
2014
2015
6
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
230
220
210
200
190
180
170
55
50
45
40
35
30
25
50
40
30
20
10
0
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Soundly financed, asset
backed with a progressive
dividend policy
We are a highly focussed, successful
premium pub company with a
progressive dividend policy and a
balance sheet underpinned by freehold
property, predominantly in London.
helped by our strong operating
performance and sound investment, our
total property value has increased to
£617.3 million (2014: £559.2 million).
We have debt facilities of £175 million
with the Royal Bank of Scotland and
Barclays repayable between 2018 and
2023. At the year-end we had net debt
of £129.0 million representing a 2.47
multiple of EBiTDA, gearing of 31.7%,
with interest covered 7.2 times by
adjusted operating profit. As a result we
are well placed to expand and enhance
our estate further. We continue to
seek out opportunities either alongside
our existing estate or by extending
our trading area into those cities and
market towns in the south where our
premium offering finds a natural home.
We focus on pubs that add to the
depth, richness and variety that already
exists within our estate.
Betjeman Arms
(St Pancras Station)
Outlook
Last year’s strong sales performance has
continued into the current period and
with the uncertainty surrounding the
general election behind us, we should
continue to benefit from the improving
economy and consumer confidence.
managed house revenue in the first
seven weeks of the new financial year
was up 8.1% in total and 5.6% on a
like-for-like basis.
Next year will benefit from the eight
new acquisitions made during the year
and the large investments made in our
estate elsewhere. These will provide a
helpful tailwind as we compete against
the strong comparatives we have set
ourselves. in addition, already this
year we have opened, after longer
than expected planning delays, the
Bull & Gate (Kentish Town) and have
acquired and opened the Canonbury,
an iconic islington pub. Three other
pubs currently under development
are due to open in the late summer/
autumn: the Nine Elms Tavern, the
Trafalgar (Tooting) and the Guard
house (Woolwich). We have sold the
Seven Stars (Brighton) and exchanged
contracts for the sale of the New Town
(Sutton) for a total of £3.4 million.
Furthermore, we can look forward to
Rugby World Cup 2015 this autumn, an
event we would expect to draw a lot of
people into Young’s pubs in south west
London and beyond.
As a result we are confident that,
through our long-standing strategy, the
talent, commitment and passion of my
colleagues, our strong financial profile
and our progressive dividend policy, we
will continue to deliver superior returns
to our shareholders.
Stephen Goodyear
Chief Executive
20 may 2015
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
7
D
E
T
A
L
E
R
-
R
E
M
U
S
N
O
C
I
L
A
C
N
A
N
I
F
p r I N C IpA L r I S k S A N d U N C e rTA I N T I 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 may currently be unknown and others currently regarded as immaterial could turn out to be
material. Further information on the group’s financial risk management objectives and policies are set out in note 22,
starting on page 49.
rISk/UNCerTAINTY
poTeNTIAL ImpACT
mITIGATIoN
Our revenue is largely dependent
on consumer spending in our
managed houses. A consumer’s
decision of if and where to spend his
or her money can be affected by a broad
range of matters (including confidence
in the economy, fears of terrorist activity,
improved awareness of the potential
adverse health consequences associated
with misuse of alcohol and the
weather), all set against a background
of an ever-increasing choice of
where to go and what to do.
A reduction in our
revenue could lead to
lower growth rates.
Our pubs and hotels are spread throughout
southern England, albeit the majority are within
the m25. Through them we provide an hospitable
and welcoming home from home, often at the
heart of the local community. They benefit from
customer-focussed designs, high service standards,
quality food and market-leading drinks, all things
that matter to the discerning consumer. By having a
mix of excellent riverside, garden and city pubs and
hotels, we seek to address the impact of seasonality
and changes in consumers’ spending habits.
Various factors may result in the
amount we pay for our key supplies
(including food, drink, gas and electricity)
being increased, making our offering
potentially less attractive to consumers
if they are passed on.
increased costs will have an
impact on our margins and result
in lower profits. A reduction in
our revenue could also lead to
lower growth rates.
Fixed-price arrangements are in place with
some of our food and drink suppliers.
Regarding utilities, we continually look at ways
of reducing our levels of consumption; we also
regularly review our energy needs and price
changes in the market, and, where appropriate,
we make forward purchases.
The pub industry is subject to a
variety of taxes, including business
taxes, duty on alcoholic beverages
and property rates. Property rates
on our estate are due to be revised
upwards in April 2017 (based on a
revaluation of our properties). The new
rates would be impacted by any changes
to the business rates regime (for
example increased rates or reduced
reliefs for large businesses).
We operate a defined benefit
pension scheme, the Young
& Co.’s Brewery, P.L.C. Pension
Scheme, which has to be funded to
meet agreed benefit payments. The
value of the scheme, and therefore its
funding, is subject to changes in life
expectancy assumptions, lower than
anticipated performances of the
stock market and by reduced
bond yields.
The introduction of new
taxes and/or increases in the
rates of existing taxes will
result in lower profits.
Through our membership of the British
Beer and Pub Association, we seek to
ensure that appropriate action is taken to
minimise this risk.
Variations in the difference
in value between the assets
of the scheme and its liabilities
may increase the amount we are
required to pay into it in order to
account for past service benefit
deficits and future service
benefit accruals.
The scheme was closed to new entrants in
2003 and we make additional contributions
over and above regular service contributions
in order to address any funding deficit.
We also maintain a close dialogue with the
scheme’s trustee.
Our financial structure involves bank
borrowings. The business therefore
needs to generate sufficient cash to
repay these debts with accrued interest.
interest rates are also subject
to change.
Our ability to trade as a
going concern depends on
generating sufficient cash to
meet these repayments.
The board ensures the group’s debt profile is long
dated, facilities are committed and debt is carefully
managed within financial covenants. A mix of
debt at fixed and variable interest rates is also
maintained with interest rate swaps used to help
manage this exposure.
8
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
I
S
N
O
T
A
R
E
P
O
I
N
O
T
A
L
U
G
E
R
rISk/UNCerTAINTY
poTeNTIAL ImpACT
mITIGATIoN
We rely on a number of key
suppliers to provide our pubs and
hotels with food and drink.
We, and particularly our managed
estate, are reliant on information
systems and technology for many
aspects of our business (including
communication, sales transaction
recording, stock management,
purchasing, accounting and reporting
and many of our internal controls).
Supply disruption could
affect customer satisfaction,
leading to a reduction in our
revenue and possibly lower
growth rates.
Any failure of such systems or
technology would cause some
disruption, and any extended
period of downtime, loss of
backed up information or delay
in recovering information could
impact significantly on our
ability to do business.
We are dependent on having
the right people throughout our
organisation, whether that is in our
pubs and hotels or in our
head office.
Our ability to achieve our
strategic and operational
objectives could be affected if
we are unable to attract and
retain the right people with the
right capabilities.
Food and drink is sourced from a number
of suppliers. informal arrangements are
also in place such that substitute suppliers
or products could be used if required. We
regularly review our choice of suppliers.
Firewalls and anti-virus software are installed to
protect our networks. information is routinely
backed up and arrangements are in place with a
third party provider to assist with data recovery.
An off-site disaster recovery facility is also available
if anything major happens at our head office
or to our systems. The iT needs of the business
are regularly monitored and we invest in new
technology and services as necessary.
We look to recruit and retain the best. The
remuneration and reward packages we offer
are competitive and designed to retain and
motivate staff. We have training and development
programmes in place intended to ensure that our
people have the right skills to perform their jobs
successfully and achieve their full potential.
Part of our growth plan is built
around us acquiring or developing
more pubs and hotel rooms.
if we do not acquire the right
opportunities when planned,
or at all, our desired future
rate of growth will be delayed
or reduced.
We have relationships with a variety of third parties to
ensure, as far as possible, that we are made aware of
acquisition opportunities as and when they come up.
We have provided a number of agents and landlords
with details of our preferred site profile.
We are required to meet a range
of ever-increasing health and safety
obligations in the operation of our
business (including in the areas of food
and fire safety).
The Government will be introducing
a statutory code to govern the
relationship between tenants and large
pub companies (owning more than 500
pubs). With 246 pubs, the code will
not apply to us.
A failure to comply could
result in an accident or incident
occurring involving injury,
illness or even loss of life. This
could damage our reputation,
possibly leading to a reduction
in our revenue and lower
growth rates. increases in the
cost of compliance will have
an impact on our margins and
result in lower profits.
The imposition on us of a
statutory code (if things were
to change) could increase the
running costs of our tenanted
business and reduce our revenue
from it. Any increase in costs will
result in lower profits and any
reduction in revenue could lead
to lower growth rates.
Training programmes, processes and audits
designed to promote and achieve compliance with
health and safety legislation are in place. These
audits are undertaken by a third party who also
works with us to ensure changes in health and
safety practices and procedures are incorporated
into our business and reviewed on a regular
basis. insurance cover to help with any financial
compensation that may be payable as a result of
an accident or incident has been taken out.
We have in place and follow a fully-accredited
legally-binding code which meets the
latest requirements of the UK pub industry
framework code of practice on how tied
agreements should operate in the pub trade;
this is different from a statutory code.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
9
B U S I Ne S S A N d F I N A N C I A L r e V I e W
Revenue increased by
7.7% to £227.0 million
with good like-for-
like growth across all
three formats: Young’s
(7.6%), Geronimo
(3.1%) and the Ram
Pub Company (3.0%).
This was the result of the benefit of
recent investments, strong operating
performances, a warm dry summer
and a buoyant festive period. An
improvement in operating margin
to 16.5% (2014: 15.7%) and lower
finance costs resulted in a 17.6%
increase in adjusted profit before tax
to £32.0 million.
managed houses
Our managed estate, which at the
year-end comprised 129 Young’s
pubs (including 22 hotels) and 37
Geronimo pubs, has had another
excellent year. Our managed pubs
follow a straightforward strategy; they
are community-led, well-invested with
market leading products and high levels
of customer service and are all designed
to exceed our customers’ expectations.
This strategy, coupled with our
commitment to provide our highly
motivated team with the freedom and
opportunity to perform, has driven
strong revenue growth, on both
an absolute (7.6%) and like-for-like
basis (6.5%), and a higher operating
margin (23.4%, 2014: 22.6%), the
combination of which has resulted
in a 11.3% increase in adjusted
operating profit to £50.1 million.
Revenue and profits
Total drink sales increased by 7.1% and
by 5.6% on a like-for-like basis. Draught
lager sales grew by 5.5%, as once again
our consumers’ tastes shifted to the
more premium ranges. The launch of
Young’s London Stout alongside a fine
range of craft beers, with an emphasis
on local brewing, has clearly met popular
demand for variety and choice, leading
to a 6.3% increase in draught ale and
stout sales. The excellent summer
helped sales of cider, rosé and white
wine. Sparkling wine was up over 25%
in volume for the second year in a row.
Spirit sales were up 12.3% supported
by the shift into premium brands and
promotions, which drove 26.1% volume
growth in gin.
Our food strategy remains steadfastly
focussed on freshly prepared, seasonal
British pub food, whilst serving best-in-
class classics and the ultimate Sunday
roasts. As a result food sales grew by
6.9% and now comprise 31.5% of our
drink:food sales mix.
We have been consistently increasing our
accommodation profile over recent years,
and this year we invested £10.8 million
in our 22 hotels on a combination of
76 extra bedrooms and raising the
standard of 75 existing ones. We have
added 17 bedrooms at the Dog & Fox
(Wimbledon Village), 13 at the Orange
Tree (Richmond) and 13 rooms to the
Windmill (Clapham Common), acquired
the Fox & Anchor (Smithfield market)
and The Bell at Stow (Stow on the Wold)
and have taken the Lamb inn (hindon)
back into managed operations. We
have upgraded rooms at the Alexander
Pope (Twickenham), Coach and horses
(Kew) and Rose and Crown (Wimbledon
Village) to our premium, boutique
standard. Despite the disruption these
investments have contributed to
increases in average room rate (£4.77),
occupancy (1.8% points) and RevPAR
(£4.80). We now have a total of 476
bedrooms across our hotel business.
in addition, we have made some exciting
improvements to a number of pubs,
most notably the Castle (Tooting) where
we have transformed the car park into
a 78 seater orangery, with the warmth
of a central fireplace in the winter and
concertina windows that open into a
beautiful garden in the summer. We also
added a roof terrace at the Windmill
(mayfair) and an eye-catching new
conservatory at the Richard the First
(Greenwich). in addition we have now
embarked upon a two-year roll out
of our new signage across all Young’s
managed pubs. This refreshed corporate
identity, with contemporary illustrative
pictorials, is designed to capture the
individuality of our pubs, embrace our
heritage and truly reflect the modernity
of each pub’s offer.
Geronimo’s rate of growth, both like-
for-like and total, was adversely affected
by events at heathrow. The closure of
Terminal 1 resulted in the loss of the
Tin Goose in October. Airline changes
at Terminal 3 saw reduced passenger
numbers visiting the Three Bells.
Our Geronimo business is now well
established and reinvigorating its growth
is a priority for the year ahead. With
three new openings scheduled for the
current year and the full year benefit of
the Owl & Pussycat (Shoreditch) and
the Fellow (King’s Cross) the overall
Geronimo footprint continues to expand.
investment
During the course of the year we
have invested £48.5 million in our
managed estate.
We invested £27.7 million in
Young’s pubs. We acquired the
White Bear (Kennington), Defector’s
Weld (Shepherd's Bush) and the
John Salt (islington), the latter two
acquired through the purchase of
the 580 Group. major developments
were carried out at the Britannia
(Kensington), Coborn (Bow), Crooked
Billet (Wimbledon), Crown (Lee),
Duke on the Green (Fulham), Finch’s
(formerly the master Gunner, Finsbury
Square), halfway house (Earlsfield),
Porchester (Paddington), Richard the
First (Greenwich) and the Spring
Grove (Kingston).
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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Bull & Gate
(Kentish Town)
Our hotels benefitted from a £10.8
million investment, as we added
an extra 76 bedrooms through a
combination of converting existing
space into rooms, two acquisitions and
transfers between our tenanted and
managed operations.
We have invested £10.0 million in
our Geronimo estate, which includes
the purchase of the Owl & Pussycat
(Shoreditch) and the Fellow (King’s
Cross), also as part of the 580 Group
acquisition. major developments were
completed at the Betjeman Arms
(St Pancras) and the Bull (Westfield
in Shepherd’s Bush).
Customer engagement
We continue to strengthen our
e-marketing platform to deliver
enhanced local engagement,
maximise consumer loyalty and
position pubs right at the heart
of their communities. We are
using new technology within our
pubs to improve the face-to-face
communication with customers.
Over one third of the estate is now
using tablet technology to facilitate
our “you stay there and we’ll look
after you” service proposition.
Together, we and our customers are
seeing the benefit of these tablets
across a wide range of pubs from the
Lamb Tavern (Leadenhall market),
delivering exceptional service
through their “Thirst Aiders”, to
our many pubs with large gardens,
where regularly over 30% of their
sales are delivered through the use
of tablets. Our new virtual hotel hot
desk ensures that guests unable to
get through to their desired hotel first
time are transferred to an available
hotel receptionist, who will be able to
attend to their booking or enquiry on
behalf of any hotel within our estate.
Events in our pubs have gone from
strength to strength with many
creating bespoke occasions to
inspire, involve and connect our
customers. Last spring we launched
‘Ginspiration’, our festival of gin,
while also running a series of highly
successful cider versus wine taste
matching dinners.
Our innovative, individual pubs are
also creating new ways of engaging
with their local communities, and
in September we were delighted
when Barbara Smith from the
Grange (Ealing Common) won the
Publican and morning Advertiser
national award for Best Community
Pub. Barbara and the Grange typify
what we try to achieve across all
of our pubs, namely to be the
community’s hub, with business
savvy and digitally minded ideas
attracting a wide range of customers:
from parents with their babies, local
business people, salsa and quiz night
enthusiasts, all alongside the more
traditional regulars. They even cater
to pets, with weekly ‘play dates’ for
customers’ dogs. Elsewhere, initiatives
range from the White hart’s (Barnes)
‘#TweetYourStreet’ campaign
offering one-off deals to residents of
a different street every week, giving
those residents a chance to ‘meet
YOUNG & CO.’S BREWERY, P.L.C. ANNUAL REPORT 2015 11
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Coborn
(Bow)
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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
their neighbours’, to mouth-watering
food quizzes at the Castle (Tooting).
As autumn arrived we celebrated
Young’s Day, now an annual
tradition, which provides us with an
opportunity to thank our customers
for their loyalty. Over 13,000 of them
took up our offer to enjoy a free
pint to celebrate our 183rd birthday.
meanwhile within Geronimo we held
harvest food festivals, linking up
with City Farms, and raising funds to
enable city children to experience a
taste of rural life.
As winter set in we had one of the
most exciting Rugby Six Nations
tournaments, providing the perfect
backdrop for this autumn’s Rugby
World Cup 2015. Our pubs are
perfectly placed to take advantage of
these events.
Ram Pub Company
The benefits of strategic initiatives
implemented over the last few years,
which culminated in the launch of the
Ram Pub Company, are now evident.
Our tenanted operation has returned
to revenue and profit growth both on
a total and a like-for-like basis.
Revenue and profits
Total revenue was up 9.6%, the result
of 3.0% like-for-like growth, the full year
benefit of last year’s acquisitions (the
Clapham North, New inn (Ealing) and
the Royal Oak (Bethnal Green)) and a
net three transfers from our managed
operations over the last year (the
marquess Tavern (islington), Riverside
(Chelmsford), King’s Arms (Epsom)
and the Butcher’s hook (formerly the
Thatched house, hammersmith) with
the Lamb inn (hindon) moving in the
opposite direction). Adjusted operating
profits increased by 13.2% and by 7.2%
on a like-for-like basis. Our 80 tenanted
pubs (2014: 79), represent 5.5% of our
group revenue (2014: 5.4%) and 7.9%
of group adjusted operating profit at
outlet level (2014: 7.8%).
investment
We invested £2.1 million in our
tenanted business, with major
developments at the Butcher’s
hook, Dog & Bull (Croydon), Grand
Junction Arms (harlesden), Grey
horse (Kingston), hope (Norwood),
horse Pond (Castle Cary), Riverside
(Chelmsford) and the Unicorn
(Somerton). The external appearance
of all our tenanted pubs has, where
appropriate, been rebranded with the
Ram Pub Company signage. These
investments have been partly funded
by the sale of the Tamworth Arms
(Croydon) and the Bunch of Grapes
(Bradford-on-Avon).
Tenant engagement
The Ram Pub Company is small enough
to provide flexible agreements with
plenty of choice, financial backing for
trade-building initiatives and, together
with marketing and operational support,
is a model designed to attract and
harness the entrepreneurial flair of
today’s business partners.
This year’s re-branding, new website
and strengthened support team has
provided a new impetus to the division,
allowing us to market ourselves more
successfully to a wider audience and
to have more effective communication
with our existing tenants.
The Small Business, Enterprise and
Employment Bill, which will alter the
relationship some businesses have with
their tenants through the introduction
of a Statutory Code of Practice, received
Royal Assent at the end of march.
importantly, due to our size, we will
not be required to offer our tenants a
free of tie option. We will continue to
operate our code of practice and expect
to update this as and when a new pub
industry framework code of practice on
how tied agreements should operate in
the pub trade is introduced. The new law
is not expected to have a material impact
on the Ram Pub Company’s operations.
Property and treasury
Property
CBRE, an independent and leading
commercial property and real estate
services adviser, revalued 20% of
our estate as at the year-end. The
remaining 80%, as permitted by
international Accounting Standards
and in common with other listed pub
groups, was revalued internally. This
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
internal review, which was led by
Andrew Cox mRiCS, our Director
of Property and Tenancies, used
updated trading results together with
management’s knowledge of each pub.
improving pub values, especially in our
London and south east heartland, once
coupled with our improving trade,
have driven a net upward revaluation
of £23.8 million. The total estate is now
valued at £617.3 million. in accordance
with international Financial Reporting
Standards, 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, but these have no
cash impact.
Treasury
This has been another year of record
operating cash flow (£50.6 million,
2014: £47.3 million) driven by 7.7%
revenue growth which in turn increased
EBiTDA, before exceptional items, by
14.2% to £52.2 million. This cash flow
helped finance £50.9 million of capital
expenditure including eight new pubs.
As a result of this investment, net debt
increased by £17.0 million to £129.0
million. Despite this, fixed charge cover
improved to 3.9 times (2014: 3.2 times),
interest cover increased to 7.2 times
(2014: 5.6 times), annualised net debt to
EBiTDA was little changed at 2.47 times
and gearing was 31.7% (2014: 29.5%).
We have debt facilities of £175 million
with the Royal Bank of Scotland and
Barclays repayable between 2018 and
2023, which provide us with capacity
to expand and enhance our business
further. With these committed
facilities, our freehold-backed
balance sheet and the benefit of the
conservative financial ratios outlined
above, these financial statements, as
usual, have been prepared on a going
concern basis.
We believe it is important to have
some protection from adverse
movements in interest rates and have
over the years entered into interest
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 13
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Alma
(Wandsworth)
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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
rate swaps. Presently £80 million of
our £129.0 million net debt is fixed
through these swaps. These swaps,
the bank’s margin and other costs
result in a combined rate of just
below 4.8%. in addition we have
entered into a forward starting £30
million swap, which runs from the
expiry of one for the same amount in
December 2016 for the remaining life
of our term loan. As a consequence,
in 2016 we expect to have an interest
rate of 5.1% on the hedged element
of our bank debt. These swaps are
valued each year at market rates,
have maturities that match the
underlying liabilities and have been
designated as cash flow hedges for
accounting purposes. As a result
the £3.6 million adverse movement
(2014: £5.6 million improvement)
in their market value has been
recorded in the statement of other
comprehensive income.
The group’s financial position, its cash
flow, liquidity position and borrowing
facilities are set out in note 22 of
the financial statements. This note
also summarises the group’s capital
management and principal treasury
objectives and the tools we use to
monitor and manage exposure to
certain financial risks.
Retirement benefits
The deficit on our final salary defined
benefit scheme, which closed to
new entrants in 2003, has increased
by £7.1 million to £13.1 million.
The fair value of the scheme assets
increased by £10.4 million to £115.7
million, which was principally the
result of investment performance.
however this performance, with the
additional benefit of lower inflationary
expectations, only partially offset
the impact of lower long-dated
corporate bond yields on the schemes
liabilities. it’s these yields, now at
unprecedented lows, that are used by
our actuary to determine the rate at
which our liabilities are discounted.
The present value of the scheme’s
liabilities has increased by £17.5
million to £128.8 million.
Corporate and social
responsibility
We pride ourselves on being at the heart
of the community, and recognise the
importance of operating a responsible
and sustainable business. Our recycling
efforts have gone up a gear and last
year we recycled 4,481 tonnes (2014:
3,065 tonnes). Recycled waste now
represents 64% of our total waste (2014:
57%) with just 2% going to landfill and
163,000 litres of waste cooking oil being
converted to bio-diesel. We have now
switched practically all our managed
pubs to LED lighting which has saved
around 2,900,000 kWh of electricity
and in turn has prevented 1,570 tonnes
of CO2 emissions being released into
the atmosphere.
in recognition of Geronimo’s own
ongoing commitment to sustainability,
it once more received a three star
award from the Sustainable Restaurant
Association, the highest award available.
in the year of Rugby World Cup
2015 we are proud to announce our
association with Wooden Spoon, the
children’s charity of rugby. Together
we will raise money to support local
disadvantaged and disabled children.
Shareholder returns
This year’s performance, as in
previous years, is the result of a
clear strategy to deliver earnings and
dividend growth. Revenue growth
of 7.7% and an extra 0.8% points
added to our operating margin
when coupled with lower net finance
charges has resulted in adjusted
profit before tax increasing by 17.6%
to £32.0 million and by 35.7% to
£36.1 million on an unadjusted
basis. Earnings per share increased
by 20.5% to 55.17 pence and our
adjusted EPS was up 18.1% at 50.62
pence after allowing for the following
exceptional items:
• A non-cash £4.2 million valuation
gain arising from the revaluation
of our pub estate (i.e. pubs where
there has been a reversal of previous
downward valuations);
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
• Acquisition costs of £1.0 million,
including legal and professional fees
and stamp duty, incurred on the
business combination of 580 Limited,
the Bell at Stow Limited and three
other freehold pub purchases;
• Profit on disposal, net of selling costs,
of £0.9 million on the sale of the
Elephant (City of London), Tamworth
Arms and Bunch of Grapes, and the
termination of the Tin Goose lease;
• A £0.2 million pension scheme
settlement gain in relation to the
members who have left the scheme;
and
• A £0.2 million capital gains tax
provision for the shares held in
connection with 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; this is impacted by an
increasing share price.
Dividends
in line with our dividend policy we are
recommending a 6.1% increase in the
final dividend to 8.56 pence per share,
making a total dividend for the year of
16.46 pence. Our progressive policy is
designed to deliver year-on-year growth
whilst allowing us to retain sufficient
profits in the business to enable us to
make the investments on which this
long-term track record depends. The
dividend, following this eighteenth
consecutive increase, is covered 3.1
times by our adjusted earnings.
Summary
Our strategy continues to deliver
shareholder value and strong revenue
and earnings growth, while allowing
us to invest £50.9 million this year to
create the platform for future growth
and enabling us to maintain our
balance sheet strength.
On behalf of the board
STE P H E N G O O DY EA R
Chief Executive
20 may 2015
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 15
d I r e C To r S ’ r e p o rT
F O R T h E 5 2 W E E K S E N D E D 3 0 m A R C h 2 0 1 5
Welcome to our board of directors. Apart from Patricia (‘Trish’) Corzine who was appointed on 12 January 2015, all
served throughout the period; no other person was a director during the period other than Rupert Clevely who served
throughout the period but stepped down from the board on 27 April 2015.
Nicholas Bryan, B.A., F.C.A.
NON-EXECUTIVE CHAIRMAN
Stephen Goodyear
CHIEF EXECUTIVE
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 62.
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. Was recently the
master of the Brewers’ Company, one of the
oldest Livery Companies in the City of London.
Aged 59.
Torquil Sligo-Young
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 the group’s
technological needs and for health and safety.
Previously worked for stockbrokers Bell,
Lawrie, macgregor & Co.
Aged 55.
Peter Whitehead, 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 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 Breweries
PLC (now marston’s PLC), business development
with Guinness Brewing and retail management with
Whitbread PLC and Courage Ltd.
Aged 56.
Edward Turner
MANAGING DIRECTOR GERONIMO INNS
Joined in 2010 and appointed to the board in
2013. has overall responsibility for Geronimo
inns, including strategy and pub acquisitions and
developments within the Geronimo estate. 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 47.
Roger Lambert, M.A.
NON-EXECUTIVE AND
SENIOR INDEPENDENT
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, Canaccord
Genuity. Previously worked for 26 years in
corporate finance at J.P. morgan 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.
Aged 56.
David Page
NO N-EXECUTIVE
Trish Corzine
NO N-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 mEATliquor,
Franco manca and The Real Greek. Was co-founder
and chairman of The Clapham house Group, owner
of Gourmet Burger Kitchen and other restaurant
brands. Prior to that, spent 27 years with Pizza
Express where at various times he was chairman,
chief executive and the owner/manager of the
group’s largest franchisee organisation. Chairman of
Fulham Shore, a quoted company, which is to invest
in distinct growth restaurant businesses. Aged 62.
Appointed to the board in 2015. has wide-ranging
knowledge of the hospitality and leisure sector,
having spent the majority of her career in the
restaurant industry. Before her retirement from the
board of The Restaurant Group plc in 2013, she
spent 20 years with them, nine as an executive
director responsible for their concessions business.
Aged 58.
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STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
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.
Corporate governance
The board is committed to good corporate governance in the management and operation of the group’s business.
Summarised below are its current corporate governance arrangements; no particular corporate governance code has
been adopted.
The role of the board
The board is collectively responsible for the business
and management of the group. its role includes:
• approving and monitoring the group’s long-term
objectives, commercial strategy, major acquisitions and
disposals and the group’s annual operating and capital
expenditure budgets;
• ensuring a sound system of internal control and risk
management; and
• overseeing the group’s operations, ensuring competent
and prudent management, sound planning, adequate
accounting and other records, and compliance with
statutory and regulatory obligations.
Board composition
The board is made up of:
• a non-executive chairman: Nicholas Bryan;
• five executive directors: Stephen Goodyear, Torquil
Sligo-Young, Peter Whitehead, Patrick Dardis and
Ed Turner; and
• three further non-executive directors: Roger Lambert,
David Page and Trish Corzine.
Their roles and brief biographical details appear
opposite.
how the board works
The board governs through its executive management and via committees.
The board has a formal written schedule of matters reserved for its review and approval; this includes those matters
described above as well as major financial and key operational issues.
The board meets every two months with additional meetings arranged as required; it met nine times during the year. Formal
agendas and reports are provided to the board on a timely basis along with other information to enable it to discharge its
duties. Each of the executive directors and the company secretary updates the board at each meeting on matters for which
they are responsible. This flow of information is in addition to information exchanged between and prior to board meetings,
and regular meetings of non-executives with one or more of the executive directors outside of board meetings.
The board has a procedure in place such that it can consider and, if it sees fit, authorise situations where a director has an
interest that conflicts, or may possibly conflict, with the interests of the company.
The board’s committees
The board has four standing or permanent committees: executive, audit, remuneration and disclosure. The latter three committees
have specific terms of reference which can be found in the investors section of www.youngs.co.uk.
Executive committee
Chairman: Stephen Goodyear
members: Executive directors
it is responsible for the daily running of the group and the execution of
approved policies and the business plan. it usually meets on a weekly basis,
with members of the group’s senior management being invited to attend
as appropriate.
Remuneration committee
Chairman: David Page
members: Nicholas Bryan
Roger Lambert
its primary function is to determine, on behalf of the board, the remuneration
packages of the executive directors (see Remuneration: executive directors on
page 19). After David Page’s retirement in July, the committee will comprise
Nicholas Bryan, who will chair it, Roger Lambert and Trish Corzine.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 17
d I r e C To r S ’ r e p o rT
C O N T i N U E D
Audit committee
Chairman: Nicholas Bryan
members: Roger Lambert
David Page
it assists the board in fulfilling its oversight responsibilities, with its primary functions
being monitoring the integrity of the company’s financial statements and internal
control systems (including risk management), overseeing the company’s relationship
with its external auditor and reviewing the effectiveness of the audit process. The
finance director usually attends the committee’s meetings as do the external audit
partner and audit manager when the business of the meeting relates to the full year
and half year results. The committee meets separately with the group’s business risk
assurance manager and with the external audit partner and audit manager without
any other member of the group’s management present to give them the opportunity
to raise any concerns they may have and any issues arising from their work. The
committee has a meeting planner which sets out the basic items to be covered at
its regular meetings. At its meeting in may the committee reviews the company’s
preliminary announcement, the report and accounts and the performance of the
group’s external auditor and also assesses whether the auditor continues to show the
required level of independence; the focus of the November meeting is on reviewing
the interim report and agreeing the scope for the next external audit, the audit
plan and related fees. At each of its meetings there is an internal audit report from
the group’s business risk assurance manager. Following David Page’s forthcoming
retirement from the board at the company’s AGm in July (see below), the committee
will comprise Roger Lambert, who will chair it, Nicholas Bryan and Trish Corzine.
Disclosure committee
Chairman: Peter Whitehead
members: Executive directors
it assists the company in making timely and accurate disclosure of any information
required to be disclosed in order to meet legal and regulatory obligations.
Other committees are established from time to time depending on the needs of the business.
Balance of the board
There is a clear division of responsibility between the chairman and the chief executive. The former is responsible for the
effective running of the board; the latter has overall responsibility for the running of the business.
Each of the executive directors has specific roles and responsibilities, and all of the non-executives are experienced business
people who bring a wide range of skills and experiences to the board. in their roles the non-executive directors are
required, amongst other things, to constructively challenge and contribute to the development of strategy, to scrutinise the
performance of management in meeting agreed goals and objectives and to monitor the reporting of performance.
Roger Lambert is the Senior independent Director. in his current role as Chairman of Corporate Broking at Canaccord
Genuity, he attends and advises at board meetings of corporate clients. Coupling this with his many years working in
corporate finance at JPmorgan Cazenove, where he was a senior managing director with responsibilities for corporate client
coverage of the consumer sector, including brewing, drinks and hospitality, he is able to provide knowledge, support and
advice to the chairman and to the other members of the board.
The directors consider that the board is a well-balanced one that has the right number of members for the size of the group.
Board nominations and appointments
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 it. 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.
Once appointed, the company’s articles of association ensure that any new board member is subject to re-appointment by
the company’s voting shareholders at the first AGm after their appointment – this applies to Trish Corzine at this year’s AGm.
They are then subject to a further re-appointment vote every third AGm after that – this applies to Torquil Sligo-Young, Peter
Whitehead and Roger Lambert at this year’s AGm (and each of them is seeking re-appointment and their brief biographical
details are on page 16). This latter requirement also applies to David Page; however, as announced on 27 April 2015, he has
decided not to seek re-appointment and he will therefore be retiring from the board at the end of the company’s AGm in July.
18
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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Subject to shareholder re-appointment, each of the executive directors has been appointed for an indefinite period and is
generally entitled to not less than one year’s notice from the company if it wishes to terminate his appointment. in return,
each of Stephen Goodyear, Torquil Sligo-Young and Peter Whitehead has to give not less than six months’ notice if he
wishes to leave, and Patrick Dardis and Ed Turner have to give at least one year’s notice.
The non-executives have been appointed for fixed terms which are terminable earlier by them or the company giving
notice and they are likewise subject to shareholder re-appointment. The expiry dates of their current fixed terms and their
minimum periods of notice are as follows: Nicholas Bryan (11 July 2017 and three months), Roger Lambert (31 July 2017
and six months) and Trish Corzine (11 January 2018 and six months). David Page’s current fixed term was due to expire
on 31 July 2015; however, he will now be retiring from the board at the end of the company’s AGm in July.
No compensation is payable by the company for early termination.
The executive directors are expected to devote substantially the whole of their time, attention and ability to their duties, whereas,
as one would expect, the non-executives have a lesser time commitment. Apart from the chairman, who has agreed to spend
30-50 days a year on work for the company, it is anticipated that each of the non-executives will dedicate 15 days a year.
Copies of the executive directors’ service contracts and copies of the letters of appointment of the non-executive directors
are available for inspection at the company’s registered office.
Advice for the board
Subject to certain limitations, all of the directors are entitled to obtain independent professional advice at the company’s
expense; they also have access to the advice and services of the company secretary.
Keeping up to date generally and particularly with the market
From time to time the directors attend training courses and/or industry forums. They also attend relevant specialist
briefings, some of which form part of board or executive committee meetings.
The directors, executive and non-executive, regularly spend time out in the trade with fellow directors, colleagues and
friends. This helps to keep them up to date with the group’s operations, developments in the market and the competition.
Directors and officers’ liability insurance cover
The company maintains, at its own expense, insurance cover in respect of legal action against its directors and officers.
Remuneration: executive directors
The remuneration of the executive directors is determined by the remuneration committee in the context of the
company’s reward policy, the principal objective of which is the recruitment and retention of officers with appropriate
skills and qualities to drive the company’s strategy and deliver value for shareholders. Against this background,
the remuneration committee determined that base salary levels for the executive directors should be in line with
the market while variable remuneration should be linked to key performance measures and reward achievement
accordingly. None of the executive directors are involved in deciding their own remuneration.
This variable element is currently delivered via deferred annual bonus awards which are dependent on certain
performance targets being achieved. The terms of the awards are such that if any bonus is paid, half of it has to be
settled in shares, with the other half being paid in cash except to the extent that the director elects to receive all or
part of it in shares instead. For every share taken in place of cash, the director is allowed to subscribe at nominal
value for one ‘matching’ share. 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 their employment terminates by reason of illness, disability or redundancy. The ‘matching’ shares are subject
to satisfaction of a further condition relating to the increase over a set period in the group’s adjusted earnings per
ordinary share in respect of the group’s continuing operations. Any of the shares acquired, whether ‘matching’ or
otherwise, are liable to forfeiture in certain circumstances.
The remuneration committee believes that the company’s remuneration policy is consistent with the group’s risk
management policy as it does not encourage inappropriate risks to be taken to achieve the performance targets;
the focus is very much on a long-term remuneration model.
Details of the remuneration of each executive director appear in note 8 on page 37; none of them receive
remuneration as a non-executive director elsewhere.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 19
d I r e C To r S ’ r e p o rT
C O N T i N U E D
Remuneration: non-executives
The remuneration of the non-executives is determined by the executive committee, with the intention being that the fees
paid are not out of line with the market and go some way towards rewarding the non-executives for the time they commit
to their various roles. Accordingly all non-executive directors receive a basic fee; they do not participate in bonus schemes
or share options and none of them are members of any group pension scheme other than for the purposes of complying
with pensions auto-enrolment legislation. Rupert Clevely was, however, a participant in a bonus scheme as a result of his
former employment within the group as an executive director. The non-executives are entitled to be reimbursed for certain
business-related expenses.
Details of the remuneration of each non-executive director appear in note 8 on page 37.
Risk and internal control
The board has overall responsibility for the group’s internal control system and for reviewing its effectiveness. The
executive directors implement and maintain the risk management and internal control systems, and the audit committee
assists the board in fulfilling its oversight responsibilities by monitoring the system’s integrity.
The system is designed to manage risk; it cannot eliminate it and therefore provides reasonable, not absolute,
assurance against material misstatement or loss. As part of the system, the board regularly reviews its financial controls
memorandum; this lengthy and detailed document seeks to:
• mitigate risks which might cause the failure of business objectives;
• help safeguard assets against unauthorised use or disposal;
• ensure the maintenance and reliability of proper accounting records and financial information used within the business
or for publication; and
• help achieve compliance with applicable laws and regulations.
The group’s business risk assurance manager regularly tests controls contained in the financial controls memorandum in order to
assess their effectiveness. The results of his work are shared with the executive directors concerned and with the audit committee.
With the approval of that committee, changes, as appropriate, are then made to the financial controls memorandum.
The group, through its business risk assurance manager, carries out internal reviews of financial areas according to a programme
set by the audit committee following input from the finance director, the head of finance and the group’s external auditor. The
business risk assurance manager reports to the company secretary and is independent of the areas which he reviews. his reports,
the management responses and the recommended actions are presented to the audit committee on a regular basis. management
may from time to time supplement the internal resource for these reviews with specialist external resources.
The group also employs an in-house team of retail auditors who monitor the controls in place in the group’s managed
pubs and hotels, in particular those covering stock and cash. This team reports to the head of finance.
The group has business continuity arrangements in place with third parties. it also has, and reviews annually, business
continuity plans for each of the departments within the group’s head office.
in 2008 the group introduced a whistleblowing policy. This is overseen by the audit committee and allows staff to raise any
concerns in confidence directly with the chairman of the audit committee, the company secretary or the group’s business
risk assurance manager.
Relations with shareholders
Copies of the annual report and the interim report are sent to all shareholders and copies can be downloaded from the
investors section of www.youngs.co.uk. Other information for shareholders and interested parties is also provided on the
website. Written or e-mailed enquiries are handled by the company secretary.
The company has an ongoing programme of individual meetings with institutional shareholders and analysts following
the preliminary and half year results presentations to the City. These meetings allow the chief executive and the finance
director to update shareholders on strategy and the group’s performance. Additional meetings with institutional investors
and/or analysts are arranged from time to time. All members of the board receive copies of feedback reports from the City
presentations and meetings, thus keeping them in touch with shareholder opinion.
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.
20
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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Directors’ holdings and interests
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 8(e)
on pages 26 and 27.
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)
Edward Turner (i)
Roger Lambert
David Page
Rupert Clevely (i)
Trish Corzine
Also interested in:
Beneficial and family
Beneficial and family
Beneficial and family
Beneficial and family
Beneficial and family
Beneficial and family
As at
30 march 2015
31 march 2014
30 march 2015
31 march 2014
30 march 2015
31 march 2014
30 march 2015
31 march 2014
30 march 2015
31 march 2014
30 march 2015
31 march 2014
30 march 2015
31 march 2014
30 march 2015
31 march 2014
30 march 2015
31 march 2014
31 march 2015
31 march 2014
30 march 2015
31 march 2014
A shares
8,505
8,505
196,283
147,566
253,153
246,255
4,154,340
3,689,188
95,363
68,547
39,891
14,670
8,854
–
5,250
5,250
3,278
3,278
13,081
20,081
–
–
Non-voting
shares
–
–
–
–
3,000
7,000
649,914
549,591
–
–
–
–
–
–
5,000
5,000
–
–
–
–
–
–
(i) 635,064 (2014: 680,856) A shares held in trust by RBT ii Trustees Limited – see note 28 on page 58.
(ii) 387,541 (2014: 477,769) A shares held in trust by Young’s Pension Trustees Limited – see note 28 on page 58.
Qualifying indemnity 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 indemnity
provisions in favour of Rupert Clevely are described in note 28 on page 58; 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.
Other disclosures
AIM: the company’s shares are traded on Aim. There are no other exchanges or trading platforms on which the company has
applied or agreed to have its shares admitted or traded.
PROFIT AND DIVIDENDS: the profit for the period attributable to shareholders was £26.7 million. The directors recommend a
final dividend for the period of 8.56 pence per share. Subject to approval at the AGm, this is expected to be paid on 9 July 2015
to shareholders on the register at the close of business on 12 June 2015. When added to the interim dividend of 7.90 pence per
share, this will produce a total dividend for the period of 16.46 pence per share.
AGM: notice convening the AGm and an explanation of the resolutions being proposed are set out on pages 61 to 64.
IMPORTANT EVENTS SINCE THE END OF THE PERIOD AND LIKELY FUTURE DEVELOPMENTS: in accordance with
section 414C(11) of the Companies Act 2006, the directors have chosen to include in the strategic report (on pages 1 to 15)
particulars of important events affecting the group which have occurred since the end of the period and an indication of likely
future developments in the group’s business.
FINANCIAL INSTRUMENTS AND RELATED MATTERS: included in note 22, starting on page 49, are the group’s financial risk
management objectives and policies and an indication of the group’s exposure to certain risks.
EMPLOYEES: 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 both formally and informally, 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
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 21
d I r e C To r S ’ r e p o rT
C O N T i N U E D
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
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 invited all employees of the group who had been continuously employed on and from 1 April 2012
to join the group’s savings-related share option scheme for 2014. 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 840 pence per share, being a
discount of 20% to the market price at the time the invitations were issued. 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.
PUBLIC HEALTH RESPONSIBILITY DEAL: 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 significant
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 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. 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.
NOTIFICATIONS OF MAJOR HOLDINGS OF VOTING RIGHTS: as at 30 march 2015 the company had been notified
of the following holdings of 3% or more of the voting rights in the company:
Torquil Sligo-Young
James Young
Lindsell Train Limited
14.82%
13.81%
5.28%
BlackRock investment management (UK) Limited <5.00%
3.12%
helena Young
3.10%
El Oro and Exploration Company plc
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 31 march 2015 and 19 may 2015, both dates inclusive.
STATEMENT OF CERTAIN RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS AND OTHERWISE:
for each financial period the directors are required to prepare an annual report, comprising of a strategic report, a directors’ report
and financial statements. The latter must be prepared in accordance with international Financial Reporting Standards (“iFRS”) as
adopted by members of the EU 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 reasonable steps for the prevention and detection of fraud and other irregularities.
DISCLOSURE OF INFORMATION TO THE AUDITOR: each of the persons who was a director at the time when this report was
approved has confirmed that, so far as they were 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 they took
all the steps that they ought to have taken as a director to make themselves 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.
Preparation and disclaimer
This annual report, comprising of a strategic report, a directors’ report and financial statements for the period ended 30 march
2015, 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
20 may 2015
22
22
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
I N d e p eN d e N T A U d I To r ’ S r e p o rT
F O R T h E 5 2 W E E K S E N D E D 3 0 m A R C h 2 0 1 5
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
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 52 week period ended 30 march 2015 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 Statement of Changes in Equity and the
related notes 1 to 31. 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 22, 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 and to
identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course
of performing the audit. 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 30 march 2015 and of the
group’s profit for the 52 week 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 Strategic Report and the Directors’ Report for the financial year 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
20 may 2015
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 2015 23
G r o U p I N C o m e S TAT e m e N T
F O R T h E 5 2 W E E K S E N D E D 3 0 m A R C h 2 0 1 5
revenue
Operating costs before exceptional items
Operating profit before exceptional items
Operating exceptional items
operating profit
Finance costs
Finance revenue
Other finance charges
profit before tax
Taxation
profit for the period attributable to shareholders of the parent company
earnings per 12.5p ordinary share
Basic
Diluted
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Notes
6
7
9
11
11
24
12
2015
£m
227.0
(189.6)
37.4
4.1
41.5
(5.2)
–
(0.2)
36.1
(9.4)
26.7
2014
£m
210.8
(177.6)
33.2
(0.6)
32.6
(5.9)
0.3
(0.4)
26.6
(4.5)
22.1
pence
Pence
15
15
55.17
55.09
45.78
45.72
All of the results above are from continuing operations.
The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.
24
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YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
S T ATe m eN T S o F C o m p r e H e N S I V e I N C o m e
F O R T h E 5 2 W E E K S E N D E D 3 0 m A R C h 2 0 1 5
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
profit for the period
other comprehensive income
Group
Company
Notes
2015
£m
26.7
2014
£m
22.1
2015
£m
22.9
Items that will not be reclassified subsequently to profit or loss:
Unrealised gain on revaluation of property
Remeasurement of retirement benefit schemes
Tax on above components of other comprehensive income
17
24
Items that will be reclassified subsequently to profit or loss:
Fair value movement of interest rate swaps
Tax on fair value movement of interest rate swaps
22
19.6
(9.1)
(0.7)
(3.6)
0.7
6.9
21.9
3.0
0.9
5.6
(1.6)
29.8
17.6
(9.1)
(0.4)
(3.6)
0.7
5.2
2014
£m
17.3
18.3
3.0
1.3
5.6
(1.6)
26.6
Total comprehensive income for shareholders of the parent company
33.6
51.9
28.1
43.9
The prior period unrealised gain on revaluation of property and associated tax charge has been repositioned from items that will be reclassified
subsequently to profit or loss to items that will not be reclassified subsequently to profit or loss.
All of the results above are from continuing operations.
The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 25
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Group
Company
2015
£m
20.9
617.3
–
7.7
645.9
2.7
5.5
0.2
8.4
654.3
(5.0)
(29.2)
(4.0)
(38.2)
(124.2)
(12.0)
(59.8)
(13.1)
(209.1)
(247.3)
407.0
6.1
2.7
1.8
(9.6)
209.6
196.4
407.0
2014
£m
20.4
559.2
–
4.8
584.4
2.6
5.9
2.4
10.9
595.3
–
(29.2)
(3.2)
(32.4)
(114.4)
(8.4)
(54.4)
(6.0)
(183.2)
(215.6)
379.7
6.0
1.7
1.8
(6.7)
193.1
183.8
379.7
2015
£m
–
546.3
31.3
7.6
585.2
2.0
27.6
0.2
29.8
2014
£m
–
501.7
24.3
4.8
530.8
2.0
26.7
1.3
30.0
615.0
560.8
(6.0)
(27.9)
(3.7)
(37.6)
(124.2)
(12.0)
(52.6)
(13.1)
(201.9)
(239.5)
375.5
6.1
2.7
1.8
(9.6)
201.7
172.8
375.5
–
(27.9)
(2.0)
(29.9)
(114.4)
(8.4)
(48.4)
(6.0)
(177.2)
(207.1)
353.7
6.0
1.7
1.8
(6.7)
186.9
164.0
353.7
Notes
16
17
18
23
19
20
22
21
22
22
23
24
25
B A L A N C e S H e e T S
A T 3 0 m A R C h 2 0 1 5
Non-current assets
Goodwill
Property and equipment
investment in subsidiaries
Deferred tax assets
Current assets
inventories
Trade and other receivables
Cash
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
Total equity
Approved by the board of directors and signed on its behalf by:
Nicholas Bryan
peter Whitehead
20 may 2015
Chairman
Finance Director
The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.
26
26
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
S TAT e m e N T S o F C A S H F Lo W
F O R T h E 5 2 W E E K S E N D E D 3 0 m A R C h 2 0 1 5
operating activities
Net cash generated from operations
interest received
Tax paid
Net cash flow from operating activities
Investing activities
Sale of property and equipment
Sale of discontinued operations
Purchases of property and equipment
Business combinations, net of cash acquired
Acquisition of subsidiaries, net of cash acquired
Net cash used in investing activities
Financing activities
interest paid
Equity dividends paid
increase/(decrease) in borrowings
increase in short term borrowings
Net cash flow used in financing activities
Decrease in cash
Cash at the beginning of the period
Cash at the end of the period
Notes
27
17
13
18
14
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Group
Company
2015
£m
2014
£m
2015
£m
50.6
–
(7.1)
43.5
3.3
–
(32.4)
(18.5)
–
(47.6)
(4.9)
(7.7)
9.5
5.0
1.9
(2.2)
2.4
0.2
47.3
–
(6.1)
41.2
–
5.0
(22.8)
(10.8)
–
(28.6)
(5.5)
(7.3)
(3.5)
–
(16.3)
(3.7)
6.1
2.4
40.0
1.0
(4.7)
36.3
3.3
–
(30.1)
(6.6)
(7.0)
(40.4)
(4.8)
(7.7)
9.5
6.0
3.0
(1.1)
1.3
0.2
2014
£m
43.1
1.0
(5.7)
38.4
–
5.0
(20.0)
(10.8)
–
(25.8)
(5.5)
(7.3)
(3.5)
–
(16.3)
(3.7)
5.0
1.3
The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 27
G r o U p S TAT e m e N T o F C H A N G e S I N e q U I T Y
A T 3 0 m A R C h 2 0 1 5
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
At 1 April 2013
7.3
1.8
(10.7)
168.9
167.2
334.5
Capital
Share redemption
capital (1)
reserve
£m
£m
Notes
hedging Revaluation
reserve
£m
reserve
£m
Retained
earnings
£m
Total
equity
£m
Total comprehensive income
Profit for the period
other comprehensive income
Unrealised gain on revaluation of property
Remeasurement of 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
Share capital issued
Dividends paid on equity shares
Share based payments
Tax on share based payments
At 31 march 2014
Total comprehensive income
Profit for the period
other comprehensive income
Unrealised gain on revaluation of property
Remeasurement of 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
Share capital issued
Dividends paid on equity shares
Revaluation reserve realised on disposal of properties
Share based payments
Tax on share based payments
At 30 march 2015
17
24
22
12
14
26
23
17
24
22
12
14
26
23
–
–
–
–
–
–
–
0.4
–
–
–
0.4
7.7
–
–
–
–
–
–
–
1.1
–
–
–
–
1.1
8.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22.1
22.1
–
–
5.6
(1.6)
4.0
4.0
–
–
–
–
–
21.9
–
–
2.3
24.2
24.2
–
–
–
–
–
–
3.0
–
(1.4)
1.6
23.7
–
(7.3)
0.1
0.1
(7.1)
21.9
3.0
5.6
(0.7)
29.8
51.9
0.4
(7.3)
0.1
0.1
(6.7)
1.8
(6.7)
193.1
183.8
379.7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
26.7
26.7
–
–
(3.6)
0.7
(2.9)
(2.9)
–
–
–
–
–
–
19.6
–
–
(2.5)
17.1
17.1
–
–
(0.6)
–
–
(0.6)
–
(9.1)
–
1.8
(7.3)
19.4
–
(7.7)
0.6
0.2
0.1
(6.8)
19.6
(9.1)
(3.6)
–
6.9
33.6
1.1
(7.7)
–
0.2
0.1
(6.3)
1.8
(9.6)
209.6
196.4
407.0
(1) Total share capital comprises the share capital issued and fully paid of £6.1 million (2014: £6.0 million) and the share premium account of £2.7 million
(2014: £1.7 million). Share capital issued in the period comprises the nominal value of £0.1 million (2014: £0.0 million) and share premium of £1.0
million (2014: £0.4 million).
The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.
28
28
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
pA r e N T C o m pA N Y S TAT e m e N T o F C H A N G e S I N e q U I T Y
A T 3 0 m A R C h 2 0 1 5
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
At 1 April 2013
7.3
1.8
(10.7)
165.9
152.2
316.5
Capital
Share redemption
capital (1)
reserve
£m
£m
Notes
hedging Revaluation
reserve
£m
reserve
£m
Retained
earnings
£m
Total
equity
£m
Total comprehensive income
Profit for the period
other comprehensive income
Unrealised gain on revaluation of property
Remeasurement of 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
Share capital issued
Dividends paid on equity shares
Share based payments
Tax on share based payments
At 31 march 2014
Total comprehensive income
Profit for the period
other comprehensive income
Unrealised gain on revaluation of property
Remeasurement of 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
Share capital issued
Dividends paid on equity shares
Revaluation reserve realised on disposal of properties
Share based payments
Tax on share based payments
At 30 march 2015
17
24
22
23
14
26
23
17
24
22
23
14
26
23
–
–
–
–
–
–
–
0.4
–
–
–
0.4
7.7
–
–
–
–
–
–
–
1.1
–
–
–
–
1.1
8.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
17.3
17.3
–
–
5.6
(1.6)
4.0
4.0
–
–
–
–
–
18.3
–
–
2.7
21.0
21.0
–
–
–
–
–
–
3.0
–
(1.4)
1.6
18.9
–
(7.3)
0.1
0.1
(7.1)
18.3
3.0
5.6
(0.3)
26.6
43.9
0.4
(7.3)
0.1
0.1
(6.7)
1.8
(6.7)
186.9
164.0
353.7
–
–
–
22.9
22.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3.6)
0.7
(2.9)
(2.9)
–
–
–
–
–
–
17.6
–
–
(2.2)
15.4
15.4
–
–
(0.6)
–
–
(0.6)
–
(9.1)
–
1.8
(7.3)
15.6
–
(7.7)
0.6
0.2
0.1
(6.8)
17.6
(9.1)
(3.6)
0.3
5.2
28.1
1.1
(7.7)
–
0.2
0.1
(6.3)
1.8
(9.6)
201.7
172.8
375.5
(1) Total share capital comprises the share capital issued and fully paid of £6.1 million (2014: £6.0 million) and the share premium account of £2.7 million
(2014: £1.7 million). Share capital issued in the period comprises the nominal value of £0.1 million (2014: £0.0 million) and share premium of £1.0
million (2014: £0.4 million).
The notes on pages 30 to 59 form part of these financial statements.
The independent auditor’s report is set out on page 23.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 29
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
F O R T h E 5 2 W E E K S E N D E D 3 0 m A R C h 2 0 1 5
1. Ge Ner AL INF orm ATI o N
The group and parent company financial statements of Young & Co.’s Brewery, P.L.C. for the period ended 30 march 2015 were authorised
for issue by the board of directors on 20 may 2015. 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 strategic report on pages 1 to 15.
The current period and prior period relate to the 52 weeks ended 30 march 2015 and 31 march 2014 respectively.
The financial statements are presented in pounds sterling and all values are rounded to the nearest hundred thousand (£0.1 million) except where
otherwise indicated.
2. B ASIS o F prep Ar ATI oN
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 £22.9 million (2014: £17.3 million).
New Accounting Standards, Amendments and Interpretations
The group has adopted the following new accounting standards during the period:
iFRS 10, iFRS 12 and iAS 27: investment Entities (Amendments): was effective for the full period ended 30 march 2015 and applies to companies that
meet the definitions of an investment entity under iFRS 10: Consolidated Financial Statements. None of the group’s entities meet the definition of an
investment entity so the amendment has no impact.
iAS 32: Offsetting Financial Assets and Financial Liabilities (Amendment): effective 1 January 2014 and clarifies the meaning of “currently has a legally
enforceable right to set-off”. The group has no such offsetting arrangements so the amendment has no impact.
iAS 36: Recoverable Amount Disclosures for Non-Financial Assets (Amendment): removes some of the disclosure requirements in respect of fair value
less costs of disposal. The amendment was effective for the full period ended 31 march 2014 but has had no impact on the group.
iAS 39: Novation of Derivatives and Continuation of hedge Accounting (Amendment): was effective for the full period ended 30 march 2015 and
provides relief from discontinuing hedge accounting when an entity novates its derivatives if certain criteria are met. The group has not novated any of
its derivatives during the current or prior periods, so the amendment has had no impact.
iFRiC 21: Levies: effective 1 January 2014 and clarifies that an entity recognises a liability for a levy when the activity that triggers payment, as identified
by legislation, happens. it also clarifies that no liability should be recognised for levies that are triggered on reaching a minimum threshold until that
threshold is reached. The adoption of iFRiC 21 has had no impact on the group.
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.
iAS 19
Defined Benefit Plans: Employee Contributions (Amendments)
1 July 2014
effective date
iFRS 10, iFRS 12 and iAS 27
investment Entities (Amendments)
iFRS 10 and iAS 28
iFRS 11
iAS 1
iAS 16 and iAS 38
Sale or Contribution of Assets between an investor and its Associate
or Joint Venture (Amendments)
Accounting for Acquisitions of interests in Joint Operations (Amendment)
1 January 2016
Disclosure initiative (Amendment)
Clarification of Acceptable methods of Depreciation
and Amortisation (Amendments)
iAS 16 and iAS 41
Agriculture: Bearer Plants (Amendments)
iAS 19
iAS 27
iAS 34
iFRS 5
iFRS 7
iFRS 14
iFRS 15
iFRS 9
Employee Benefits
Equity method in Separate Financial Statements (Amendment)
interim Financial Reporting
Non-Current Assets held for Sale and Discontinued Operations
Financial instruments: Disclosures
Regulatory Deferral Accounts
Revenue from Contracts with Customers
Financial instruments
30
30
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2017
1 January 2018
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
3. S U mm Ar Y o F SI GNI FICANT ACC oUN TIN G po L IC I eS
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. An investor controls an investee when it is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over the investee. The special purpose entity is Ram
Brewery Trust ii, 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.
(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 method.
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 and the amount of any non-controlling interest in the acquiree. The consideration transferred is measured at acquisition date fair value.
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. The valuation is
assessed on the basis of the highest and best use. When the necessary requirements have been met in respect of assets identified for disposal and revalued
immediately prior to transfer to non-current assets held for sale, the highest and best use for a market participant may reflect an alternative use for the asset.
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)).
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.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 31
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
3. SUmmArY oF SIGNIFICANT ACCoUNTING poLICIeS (CoNTINUed)
(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, 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, and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets. 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 relates
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 and other 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 recognised initially at fair value. Directly attributable transaction costs are capitalised and amortised over the life of the
facility using the effective interest method through finance expense.
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 the former excludes items of income or expense that are taxable or deductible in other years and also 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 under UK law and that are applicable to
the period.
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.
32
32
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
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, 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 remeasured 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 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.
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 actuarial cost charged to the income statement in the period consists of the current service cost, net interest
on the net defined benefit liability or asset, past service cost and the impact of any settlements or curtailments.
Remeasurements of defined benefit pension and post retirement health care schemes are recognised in full in the statement of comprehensive
income in the period in which they occur.
The net defined benefit pension liability or asset in the balance sheet comprises the present value of the defined benefit obligations 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 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. 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 participants’ 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. Remeasurements of health care benefits are recognised in full directly in the statement of
comprehensive income.
(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.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 33
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
3. S Um mA rY o F S I G N I F I CAN T AC C o U NTI N G po LI C I e S ( C o NTI N Ue d)
(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. k eY AC C o U NTI N G e STI mAT e S AN d j U d G e m e NTS
The following are the key estimates and 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 presented in the financial statements.
(a) 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, performed by qualified valuers, 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. See note 17.
(b) 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 16.
(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), 13 and 16.
(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 17.
(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 24.
(f) Taxation
The group reviews potential tax liabilities and benefits to assess the appropriate accounting treatment. Tax provisions are made if it is probable that
a liability will arise. Tax benefits are not recognised unless it is probable that they will be obtained. Assessing the outcome of uncertain tax positions
requires judgements to be made based on past experience and the current tax environment. See notes 3(n), 12 and 23.
34
34
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
5. SeGmeNTAL reporTING
The group is organised into the reporting segments referred to below. 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 the Ram Pub Company. Both Young’s and
Geronimo managed houses operate pubs. Revenue is derived from sales of drink, food and the provision of 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. The Ram Pub Company 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.
Total segment revenue is derived externally with no intersegment revenues between the segments in either period. The group’s revenue is derived
entirely from the UK.
Income statement
2015
Total segment revenue
operating profit/(loss) before exceptional items
Operating exceptional items
operating profit/(loss)
2014
Total segment revenue
Operating profit/(loss) before exceptional items
Operating exceptional items
Operating profit/(loss)
managed
houses
£m
214.2
50.1
3.4
53.5
199.0
45.0
–
45.0
ram pub
Company
£m
Segments
total
£m
12.5
226.7
4.3
0.7
5.0
11.4
3.8
(0.3)
3.5
54.4
4.1
58.5
210.4
48.8
(0.3)
48.5
The following is a reconciliation of the operating profit to the profit before tax:
Unallocated
Total
£m
0.3
(17.0)
–
(17.0)
0.4
(15.6)
(0.3)
(15.9)
2015
£m
41.5
(5.2)
–
(0.2)
36.1
£m
227.0
37.4
4.1
41.5
210.8
33.2
(0.6)
32.6
2014
£m
32.6
(5.9)
0.3
(0.4)
26.6
operating profit
Finance costs
Finance revenue
Other finance charges
profit before tax
Balance sheet
2015
Segment assets
Deferred tax assets
Cash
Total assets
other segmental information
Depreciation
Additions to non-current assets
Net upward movements in property valuation (note 17)
2014
Segment assets
Deferred tax assets
Cash
Total assets
Other segmental information
Depreciation
Additions to non-current assets
Net upward movements in property valuation (note 17)
managed
houses
£m
ram pub
Company
£m
Segments
total
£m
581.3
–
–
581.3
(13.3)
48.5
3.5
526.7
–
–
526.7
(11.1)
25.8
0.3
57.7
–
–
57.7
(1.2)
2.1
0.7
52.3
–
–
52.3
(1.1)
7.7
–
639.0
–
–
639.0
(14.5)
50.6
4.2
579.0
–
–
579.0
(12.2)
33.5
0.3
Unallocated
Total
£m
7.4
7.7
0.2
15.3
(0.3)
0.3
–
9.1
4.8
2.4
16.3
(0.3)
0.1
–
£m
646.4
7.7
0.2
654.3
(14.8)
50.9
4.2
588.1
4.8
2.4
595.3
(12.5)
33.6
0.3
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 35
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
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 17)
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
2015
£m
214.0
13.0
227.0
–
227.0
2015
£m
(0.1)
58.7
71.3
14.8
44.9
2014
£m
199.6
11.2
210.8
0.3
211.1
2014
£m
(0.1)
55.0
66.4
12.5
43.8
189.6
177.6
5.5
0.6
6.1
0.2
–
–
–
–
0.2
5.9
0.6
6.5
0.2
–
–
–
–
0.2
36
36
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
2015
£m
65.1
5.1
1.1
71.3
0.2
71.5
2014
£m
60.5
4.7
1.2
66.4
0.3
66.7
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 3,496 (2014: 3,357).
(b) Directors’ emoluments
Nicholas Bryan
Stephen Goodyear
Torquil Sligo–Young
Peter Whitehead
Patrick Dardis
Edward Turner
Roger Lambert
David Page
Rupert Clevely
Trish Corzine
Total 2015
Total 2014
Basic salary
and fees
£
Benefits
£
85,300
–
Bonus
£
–
Total
excluding
pension
costs
2015
£
Total
excluding
pension
costs
2014
£
85,300
83,220
318,139
17,799
287,316
623,254
640,066
127,880
26,356
114,917
269,153
271,900
230,533
234,032
7,949
1,650
192,568
192,568
431,050
447,371
428,250
439,146
183,509
10,261
121,975
315,745
360,468
39,253
39,253
38,110
8,764
–
–
10,253
–
–
–
–
–
39,253
39,253
48,363
8,764
38,110
38,110
48,210
–
1,304,773
74,268
909,344
2,288,385
1,258,155
88,196
1,020,250
2,366,601
The Benefits column relates 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, Torquil Sligo-Young, Peter Whitehead and Ed Turner 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 2018 exceeds the same measure for the financial period ended 31 march 2014. 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 mid-June 2015). 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 is £143,658 (2014: £155,899), to Torquil Sligo-Young is £57,459 (2014:
£60,479), to Peter Whitehead is £96,284 (2014: £104,374) and to Ed Turner is £60,988 (2014: £nil).
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 37
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
8. e m pLoYm e NT ( C o NTI N Ue d)
(c) Retirement benefits
defined benefit pension scheme
The company operates a defined benefit pension scheme, namely the Young & Co.’s Brewery, P.L.C. Pension Scheme. All active members in
this pension scheme contribute to it, with contributions being at the rate of 5.0% of pensionable earnings. This pension scheme invests largely in
managed funds.
As at 30 march 2015 only one director, Patrick Dardis, was accruing benefits under the defined benefit pension scheme in respect of qualifying service.
his pension entitlement (being that which would be paid annually on retirement under the terms of his service agreement based on service to
30 march 2015) is £39,741 (2014: £36,262) and his normal retirement date will be reached when he is 60. Net of member contributions, the value
of the increase in his accrued pension during the year to 30 march 2015 was £42,710 (2014: £55,450) – this value was calculated using appropriate
methodology prescribed under relevant legislation: for example, this included applying a factor of 20 to the increase in accrued pension over the year
(net of the required allowance for inflation). This method of valuation is different from using the scheme’s normal cash equivalent transfer value basis.
The company accounts for retirement benefits in accordance with iAS 19 and detailed disclosures covering this are set out in note 24.
Stephen Goodyear and Torquil Sligo-Young have begun to draw their pensions; they therefore have no further defined benefit accrual. Peter Whitehead
has opted for 2014 Fixed Protection and has therefore also ceased future pension accrual (2014 pension entitlement: £60,872; 2014 value increase net
of member contributions: £64,116).
defined contribution pension scheme
The company also operates a defined contribution pension scheme.
As at 30 march 2015 three directors, Ed Turner, David Page and Rupert Clevely, were in such a scheme. For the year ended 30 march 2015 the
company paid contributions of £7,290 (2014: £8,550), £335 (2014: £nil) and £323 (2014: £135) respectively into a defined contribution pension
arrangement for them.
post retirement health care
in addition, the company bears the cost of post retirement health care premia for certain employees and ex-employees.
(d) Profit sharing scheme
Share allocations made up to and including those for the company’s financial period that ended on 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 members receive
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 the other directors
who served during the period have an accrued entitlement under the scheme.
(e) Savings-related share option scheme
The company operates a savings-related share option scheme. From year to year eligible employees of the group are invited to join the scheme and
be granted options to buy shares in the company. Employees must normally have been employed throughout a period of two years preceding the
financial year in which they are invited to join, and they must agree to save a fixed monthly amount with a savings institution through deductions
from net salary and usually over a three-year period. The amount to be saved determines the number of shares over which an option is granted.
if the Board chooses, options are granted at a discount of up to 20% of the market price of a share at the time invitations are sent out to join the
scheme for that year. There are no performance conditions other than continued employment.
The entitlement to A shares under the scheme of each of the directors who served during the period is as follows:
At
1 April 2014
Granted
during the period
At
30 march 2015
Stephen Goodyear
Torquil Sligo-Young
Peter Whitehead
Patrick Dardis
Edward Turner
1,844
–
1,844
–
1,844
–
1,844
–
1,844
–
–
1,071
–
1,071
–
1,071
–
1,071
–
1,071
1,844
1,071
1,844
1,071
1,844
1,071
1,844
1,071
1,844
1,071
Exercise
price
(pence)
488
840
488
840
488
840
488
840
488
840
Exercisable
from
01.09.15
01.09.17
01.09.15
01.09.17
01.09.15
01.09.17
01.09.15
01.09.17
01.09.15
01.09.17
Exercisable
to
28.02.16
28.02.18
28.02.16
28.02.18
28.02.16
28.02.18
28.02.16
28.02.18
28.02.16
28.02.18
The exercise prices of 488 pence per share and 840 pence per share represent a 20% discount to the then market price of 610 pence per share
and 1,050 pence per share respectively.
38
38
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
9. eXC e pTI o NA L IT e m S
Amounts included in operating profit:
Upward movement on the revaluation of properties (note 17)
Downward movement on the revaluation of properties (note 17)
Acquisition costs
Capital gains tax on ESOP Trust allocated shares
Net profit on sale of properties
Pension settlement gain
exceptional tax:
Tax attributable to above adjustments
Change in corporation tax rate
Total exceptional items after tax
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
2015
£m
2014
£m
6.4
(2.2)
(1.0)
(0.2)
0.9
0.2
4.1
(1.9)
–
(1.9)
2.2
3.8
(3.5)
(0.6)
(0.3)
–
–
(0.6)
(0.5)
2.5
2.0
1.4
The movement on the revaluation of properties relates to the revaluation exercise that was completed during the period. The revaluation was conducted
at an individual pub level and identified a net upward movement of £4.2 million (2014: £0.3 million net upward) which has been taken to the income
statement. The upward movement for the period ended 30 march 2015 was split between land and buildings (£4.5 million upward) and fixtures and
fittings (£0.3 million downward). in the previous period the upward movement was all within land and buildings. See note 5 for segmental information.
The acquisition costs relate to the freehold purchases of the Bull & Gate (Kentish Town), Fox & Anchor (Smithfield market) and the White Bear (Kennington);
and the corporate acquisitions of 580 Limited and The Bell at Stow Limited (see note 13). They include legal and professional fees and stamp duty.
The prior period acquisition costs related to the purchase of the Clapham North, New inn (Ealing), Royal Oak (Bethnal Green), Weyside (Guildford) and
the King’s head (islington).
The profit on sale of properties relates to the difference between the cash, less selling costs, received from the sale or lease termination of the Elephant
(City of London), Tin Goose (heathrow Airport), Tamworth Arms (Croydon) and the Bunch of Grapes (Bradford upon Avon) and the carrying value of
the assets on the date of sale. There were no sales of properties in the prior period.
The pension settlement gain relates to members who have left the scheme.
The capital gains tax on ESOP Trust allocated shares relates to shares held within the Ram Brewery Trust ii on behalf of the closed profit sharing scheme
(see note 8(d)). 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.
10 . oTH e r F I NA N C IAL m eAS U r e S
The table below shows how adjusted group EBiTDA, operating profit and profit before tax have been arrived at. These alternative performance
measures have been provided as the Board believes that they give useful additional measures of the group’s underlying performance. Details of the
exceptional items can be seen in note 9. All the results below are from continuing operations.
2015
exceptional
items
£m
Unadjusted
£m
Adjusted
£m
Unadjusted
£m
2014
Exceptional
items
£m
Adjusted
£m
52.1
0.1
52.2
44.8
0.9
45.7
(10.6)
41.5
(5.2)
(0.2)
36.1
(4.2)
(4.1)
–
–
(4.1)
(14.8)
(12.2)
(0.3)
(12.5)
37.4
(5.2)
(0.2)
32.0
32.6
(5.6)
(0.4)
26.6
0.6
–
–
0.6
33.2
(5.6)
(0.4)
27.2
eBITdA
Depreciation and net movement on
the revaluation of properties
operating profit
Net finance costs
Other finance charges
profit before tax
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 39
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
11. F I N AN Ce C o STS AN d r eVe N U e
Bank loans and overdrafts
Finance lease interest
Finance costs
interest receivable and unwinding of discounted deferred consideration
12 . T AX ATI o N
Tax charged in the group income statement
Current tax
Current tax expense
Adjustment in respect of current tax of prior periods
deferred tax
Origination and reversal of temporary differences
Change in corporation tax rate
Adjustment in respect of deferred tax of prior periods
Tax 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
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 expense
40
40
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
2015
£m
5.1
0.1
5.2
–
5.2
2014
£m
5.8
0.1
5.9
(0.3)
5.6
2015
£m
2014
£m
7.6
0.3
7.9
1.6
–
(0.1)
1.5
9.4
1.8
–
(0.3)
0.2
–
(0.2)
1.5
2.5
(1.8)
(0.7)
–
–
6.9
(0.1)
6.8
0.2
(2.6)
0.1
(2.3)
4.5
(0.8)
(1.0)
0.1
(0.6)
0.1
(0.1)
(2.3)
3.6
0.7
1.3
(4.9)
0.7
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
A reconciliation of the tax expense applicable to the profit from operating activities before tax at the statutory rate to the actual tax expense at the
group’s effective tax rate for the periods ended 30 march 2015 and 31 march 2014 respectively is as follows:
profit before tax
Total profit before tax at corporation tax rate of 21% (2014: 23%)
Tax effects of:
Expenses not deductible for tax purposes
Recognition of property revaluation, rollover claim and other property movements
Non-assessable income
Remeasurement of deferred tax – change in corporation tax rate
Prior period adjustment – current tax
Prior period adjustment – deferred tax
Total tax expense
2015
£m
36.1
7.6
0.7
1.8
(0.9)
–
0.3
(0.1)
9.4
2014
£m
26.6
6.1
0.7
0.4
(0.1)
(2.6)
(0.1)
0.1
4.5
The change in the UK corporation tax rate from 21% to 20%, which was effective from 1 April 2015, was substantively enacted in the prior year.
Accordingly, the deferred tax balances have been measured at 20%.
13 . B U S I N e S S C o m B I NATI o N S
580 Group
On 16 October 2014 the group acquired the entire issued share capital of 580 Limited for consideration of £10.4 million on a debt and working capital
free basis. 580 Limited, through its four subsidiaries, owns and operates four pubs in prime London locations: the Defector’s Weld (Shepherds Bush), John
Salt (islington), Owl & Pussycat (Shoreditch) and the Fellow (King’s Cross). The transaction sees the continuation of our strategy of adding carefully selected
high-quality managed houses to our Young’s and Geronimo estates.
The fair value of the identifiable assets and liabilities of the acquired business at the date of acquisition was as follows:
Assets and liabilities acquired:
Property and equipment
inventories
Cash
Trade and other receivables
Overdrafts and loans
Trade and other payables
Deferred taxation on fair value adjustments
Net assets
Goodwill arising on acquisition (note 16)
Total consideration for share capital
Cash flow on acquisition:
Cash acquired
Overdrafts and loans acquired and repaid
Net working capital acquired and repaid
Cash paid for share capital
Net cash outflow
Fair
value
£m
10.4
0.1
0.8
0.1
(3.6)
(0.8)
(0.9)
6.1
0.9
7.0
0.8
(3.6)
(0.6)
(7.0)
(10.4)
in addition, the group incurred £0.5 million of costs associated with the acquisition, paid in cash, which have been recorded as an operating
exceptional item.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 41
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
13 . B U S I N e S S C o m B I NATI o N S (C o NTI N Ue d)
The Bell at Stow Limited
On 7 January 2015 the group acquired the entire issued share capital of The Bell at Stow Limited for consideration of £1.5 million on a debt and
working capital free basis. The Bell at Stow owns and operates a pub and hotel in the Cotswolds which, together with the newly acquired and adjacent
Stuart house (see below), added a further 13 high quality boutique hotel rooms to the Young’s estate.
The fair value of the identifiable assets and liabilities of the acquired business at the date of acquisition was as follows:
Assets and liabilities acquired:
Property and equipment
Trade and other receivables
Overdrafts and loans
Trade and other payables
Deferred taxation on fair value adjustments
Net assets
Goodwill arising on acquisition (note 16)
Total consideration for share capital
Cash flow on acquisition:
Cash acquired
Overdrafts and loans acquired and repaid
Net working capital acquired and repaid
Cash paid for share capital
Net cash outflow
Fair
value
£m
1.5
0.1
(0.4)
(0.3)
(0.2)
0.7
0.2
0.9
–
(0.4)
(0.2)
(0.9)
(1.5)
in addition, the group incurred £0.1 million of costs associated with the acquisition, paid in cash, which have been recorded as an exceptional
operating item.
The goodwill arising on the acquisitions of 580 Limited and The Bell at Stow Limited includes deferred taxation of £0.9 million and £0.2 million
respectively, which arises on the fair value adjustment of property and equipment. None of the goodwill is expected to be deductible for income
tax purposes.
The 580 Group and The Bell at Stow Limited contributed £3.2 million of revenue and £0.7 million of operating profit for the periods between the
dates of acquisition and the period end date.
if the acquisitions of the 580 Group and The Bell at Stow Limited had been completed on the first day of the financial period, group revenues for
the period would have increased by £4.2 million and the group operating profit would have increased by £0.7 million.
other business combinations
The group and company acquired the Fox & Anchor (Smithfield market), White Bear (Kennington) and Stuart house (Stow on the Wold) as business
combinations in the current period for considerations totalling £6.6 million. The aggregated fair value of the identifiable assets and liabilities of the acquired
businesses was property and equipment of £6.6 million and inventories of £nil. The group incurred £0.4 million of costs associated with the acquisitions,
which have been recorded as operating exceptional items.
in the prior period, the group and company acquired the Clapham North, New inn (Ealing), Royal Oak (Bethnal Green), Weyside (Guildford) and the King’s
head (islington). The aggregated fair value of the identifiable assets and liabilities of the acquired businesses was property and equipment of £10.8 million
and inventories of £nil. The group incurred £0.6 million of costs associated with the acquisitions, which were recorded as operating exceptional items.
Cash flow from business combinations
580 Group
The Bell at Stow Limited
Other business combinations
Total net cash outflow
42
42
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
2015
£m
(10.4)
(1.5)
(6.6)
(18.5)
2014
£m
–
–
(10.8)
(10.8)
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
14 . d IVI d e N d S o N e q U IT Y S HAr e S
Final dividend (previous period)
interim dividend (current period)
2015
pence
8.07
7.90
2014
Pence
7.61
7.45
15.97
15.06
2015
£m
3.9
3.8
7.7
2014
£m
3.7
3.6
7.3
in addition, the Board is proposing a final dividend in respect of the period ended 30 march 2015 of 8.56 pence per share at a cost of £4.1 million.
if approved, it is expected to be paid on 9 July 2015 to shareholders who are on the register of members at the close of business on 12 June 2015.
15. eA rNINGS per ord IN A r Y SHA re
(a) Earnings
Profit attributable to equity shareholders of the parent
Operating exceptional items
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
(b) Basic earnings per share
Basic
Effect of exceptional items and other adjustments
Adjusted basic
(c) Diluted earnings per share
Diluted
Effect of exceptional items and other adjustments
Adjusted diluted
2015
£m
26.7
(4.1)
1.9
–
24.5
2014
£m
22.1
0.6
0.5
(2.5)
20.7
Number
Number
48,397,275
69,303
48,275,784
60,685
48,466,578
48,336,469
pence
55.17
(4.55)
50.62
pence
55.09
(4.54)
50.55
Pence
45.78
(2.90)
42.88
Pence
45.72
(2.90)
42.82
The basic earnings per share figure is calculated by dividing the profit attributable to equity shareholders of the parent for the period 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 69,303 (2014: 60,685) dilutive potential shares under the SAYE
scheme (see notes 8(e) and 26).
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.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 43
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
16 . G o o dW I LL
2015
Geronimo
The Bell at Stow Limited
580 Limited
2014
Geronimo
Group
At 31 march
2014 Acquisitions
£m
£m
disposal
£m
At 30 march
2015
£m
20.4
–
–
20.4
–
0.2
0.9
1.1
(0.6)
–
–
(0.6)
19.8
0.2
0.9
20.9
At 1 April
2013
£m
Acquisitions
£m
At 31 march
2014
£m
Disposal
£m
20.4
20.4
–
–
–
–
20.4
20.4
Goodwill arising on the acquisitions of 580 Limited and The Bell at Stow Limited relates to the deferred taxation which arises on the fair value
adjustment of property and equipment. The goodwill has been allocated for impairment purposes to the individual pubs within the 580 Group and
The Bell at Stow Limited; these are the cash generating units and fall within the managed houses segment.
The opening 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.
During the current period the lease of the Tin Goose, one of the pubs trading within the Geronimo managed houses format, was terminated as a
result of heathrow Terminal 1 closing. The relative value of the goodwill associated with the Tin Goose, £0.6 million, had been included in the carrying
amount of the operation when determining the gain or loss on disposal.
The group tests goodwill annually for impairment or more frequently if there are indicators that goodwill may have been impaired.
There will be an impairment if the recoverable amount is lower than carrying value. Recoverable amount is value in use. The value in use is calculated
using the three year business plan approved by the board. Cash flows beyond this period assume 2.0% growth (2014: 2.0%) which is below the
industry long term average growth rate. The pre tax discount rate applied to cash flow projections is 9.1% (2014: 9.2%). The calculation is most
sensitive to revenue assumptions and the pre tax discount rate, however the board believes that the assumptions used are reasonable. The Board has
conducted a sensitivity analysis on the impairment test and neither a 10% decline in cash flow nor a 1% increase in the discount rate would lead to
the impairment of the goodwill in the period ended 30 march 2015 and is therefore comfortable that presently no reasonably possible change in key
assumptions would give rise to an impairment.
44
44
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
17. p ro per TY AN d eq UI pme NT
Group
Fixtures,
fittings &
equipment
£m
Land &
buildings
£m
Cost or valuation
At 1 April 2013
Additions
Business combinations
Fully depreciated assets
Revaluation(1)
– effect of upward movement
in property valuation
– effect of downward movement
in property valuation
At 31 march 2014
Additions
Business combinations
Disposals
Fully depreciated assets
Revaluation(1)
– effect of upward movement
in property valuation
– effect of downward movement
in property valuation
523.5
7.5
9.7
–
27.8
(5.9)
562.6
10.7
17.0
(2.0)
(0.8)
24.9
(5.3)
85.9
15.3
1.1
(8.9)
–
–
93.4
21.7
1.5
(0.1)
(9.7)
–
–
Total
£m
609.4
22.8
10.8
(8.9)
27.8
(5.9)
656.0
32.4
18.5
(2.1)
(10.5)
24.9
(5.3)
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Company
Fixtures,
fittings &
equipment
£m
Land &
buildings
£m
468.7
6.7
9.7
–
24.1
(5.8)
503.4
11.7
5.4
(2.0)
–
22.7
(5.1)
77.9
13.3
1.1
(8.9)
–
–
83.4
18.4
1.2
(0.1)
(9.2)
–
–
Total
£m
546.6
20.0
10.8
(8.9)
24.1
(5.8)
586.8
30.1
6.6
(2.1)
(9.2)
22.7
(5.1)
At 30 march 2015
607.1
106.8
713.9
536.1
93.7
629.8
depreciation and impairment
At 1 April 2013
Depreciation charge
Fully depreciated assets
Revaluation(1)
– effect of downward movement
in property valuation
– effect of upward movement
in property valuation
At 31 march 2014
Depreciation charge
Disposals
Fully depreciated assets
Revaluation(1)
– effect of downward movement
in property valuation
– effect of upward movement
in property valuation
At 30 march 2015
Net book value
At 1 April 2013
At 31 march 2014
45.0
2.1
–
3.5
(3.8)
46.8
2.3
(0.2)
(0.8)
1.9
(6.4)
43.6
478.5
515.8
48.5
10.4
(8.9)
–
–
50.0
12.5
(0.1)
(9.7)
0.3
–
93.5
12.5
(8.9)
3.5
(3.8)
96.8
14.8
(0.3)
(10.5)
2.2
(6.4)
39.1
1.3
–
3.2
(3.5)
40.1
1.3
(0.2)
–
1.3
(5.6)
45.2
8.7
(8.9)
–
–
45.0
10.9
(0.1)
(9.2)
–
–
84.3
10.0
(8.9)
3.2
(3.5)
85.1
12.2
(0.3)
(9.2)
1.3
(5.6)
53.0
96.6
36.9
46.6
83.5
37.4
43.4
515.9
559.2
429.6
463.3
32.7
38.4
462.3
501.7
At 30 march 2015
563.5
53.8
617.3
499.2
47.1
546.3
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 45
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
17. p ro per TY AN d eq UI pme NT (C o NTI N Ue d)
(1) The group’s net book value uplift due to revaluation of £23.8 million (2014: £22.2 million) comprises an upward movement of £19.6 million
(2014: £21.9 million) shown in the statements of comprehensive income plus a reversal of previous downward revaluations of £4.2 million (2014:
£0.3 million) in the income statement. The company’s net book value uplift due to revaluation of £21.9 million (2014: £18.6 million) comprises
an upward movement of £17.6 million (2014: £18.3 million) shown in the statements of comprehensive income plus a reversal of previous
downward revaluations of 4.3 million (2014: £0.3 million) in the income statement.
(a) Revaluation of property and equipment
The group’s property estate is valued externally on an annual basis in accordance with the provisions of the RiCS Valuation – Professional Standards
January 2014 (‘the Red Book’), which takes account of the properties’ highest and best value. The group’s freehold and leasehold land, buildings,
fixtures and fittings were valued at market value, as at 30 march 2015 and 31 march 2014, by CBRE Ltd, independent chartered surveyors and by
Andrew Cox mRiCS, the group’s director of property and tenancies and a Chartered Surveyor.
The external valuation is based on information, such as current and historic levels of turnover, gross profit, wages and overheads and resultant
EBiTDA. The external valuers have then applied a multiplier to the EBiTDA based upon the relative risks associated with the trading format, tenure
and property. in a number of cases the value of the property derived purely from an income approach understates the underlying property value. in
these cases the external valuers have applied a spot value to the property rather than a value derived from a multiple applied to the income. EBiTDA
represents a key unobservable input. in addition, the valuation was based on the valuer’s assumptions and models. Each individual pub is valued as
a fully equipped operational entity after taking into account its trading potential, location, tenure, size and condition and other factors such as recent
market transactions. Changes in these variables and assumptions could materially impact the valuations.
These valuations and the assumptions made are discussed and reviewed with Andrew Cox, the Board and the auditor. The highest and best use of
the group’s properties do not differ materially from their current use.
These techniques are consistent with the principles in iFRS 13 Fair Value measurement and use significant unobservable inputs such that the fair
value measurement of each property within the portfolio has been classified as Level 3 in the fair value hierarchy.
The key inputs to valuation on property and equipment are as follows:
Segment
2015
managed houses
managed houses
managed houses
Ram Pub Company
Ram Pub Company
Segment total
Unallocated
Tenure
Freehold
Leasehold
Concession
Freehold
Leasehold
eBITdA
multiple range
High
Low
6.0
1.5
Spot
6.0
2.0
12.0
3.5
Spot
9.5
3.0
Total net book value at 30 march 2015
The number of pubs above includes four pubs currently under development that are planned to open in the coming period.
2014
managed houses
managed houses
managed houses
Ram Pub Company
Ram Pub Company
Segment total
Unallocated
Total net book value at 31 march 2014
Freehold
Leasehold
Concession
Freehold
Leasehold
7.0
2.0
Spot
6.0
Spot
12.5
4.0
Spot
10.5
Spot
Number
of pubs
139
28
3
69
11
250
–
250
134
26
3
68
11
242
–
242
Value
of pubs
£m
531.3
22.1
0.3
55.8
0.2
609.7
7.6
617.3
478.6
18.5
0.4
51.7
0.3
549.5
9.7
559.2
if, at 30 march 2015, the property estate had been carried at historic cost less accumulated depreciation and impairment losses, its carrying amount
would have been approximately £393.7 million (2014: £357.8 million).
The revaluation surplus represents the amount by which the fair value of the estate exceeds its historic cost.
A sensitivity analysis has been conducted on the property estate to give an indication of the impact of movements in the most sensitive assumption,
EBiTDA. The analysis considers this single change with the other assumptions unchanged. in practice changes in one assumption may be
accompanied by changes in another. Changes in market values may also occur at the same time as any changes in assumptions. This information
should not be taken as a projection of likely future valuation movements. Decreasing the EBiTDA used in the revaluation by 10% would decrease
the valuation by £50.0 million (2014: £47.1 million). increasing the EBiTDA used in the revaluation by 10% would increase the valuation by £50.0
million (2014: £47.1 million).
46
46
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
(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
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
2015
£m
9.9
2014
£m
10.1
Capital commitments not provided for in these financial statements and
for which contracts have been placed amounted to:
10.6
5.4
18. I NV e ST me NTS IN SUBS I dIA r I eS
Cost and net book value
At 1 April 2013 and 31 march 2014
Additions
At 30 march 2015
Group subsidiary undertakings
Geronimo inns Limited
Geronimo Airports Limited
580 Limited
587 Limited
588 Limited
591 Limited
592 Limited
The Bell at Stow Limited
19. I NV e NT or I e S
Finished goods and raw materials
Company
£m
24.3
7.0
31.3
Country of
incorporation
and registration
Country of
principal
operations
% of
equity and
votes held
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
England
100
100
100
100
100
100
100
100
Group
Company
2015
2014
2015
£m
2.7
£m
2.6
£m
2.0
2014
£m
2.0
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 47
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
20. T r Ad e AN d oTH e r r e C e IVAB L e S
Trade receivables
Other receivables
Prepayments and accrued income
Amounts due from subsidiaries
Group
Company
2015
£m
1.8
0.5
3.2
–
5.5
2014
£m
2.0
0.3
3.6
–
5.9
2015
2014
£m
1.7
0.3
2.5
23.1
27.6
£m
1.8
0.3
3.0
21.6
26.7
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 30 march 2015, trade receivables with a nominal value of £0.7 million (2014: £0.7 million) were impaired and fully provided for.
movements in the provision for impairment of receivables were as follows:
2015
2014
Opening balance
Charge for period
Amounts written off
£m
0.7
0.2
(0.2)
0.7
The amounts written off in the period were specific debts which proved irrecoverable.
The analysis of trade receivables at 30 march 2015 is as follows:
Neither
past due
Total
nor impaired
£m
1.8
2.0
£m
0.6
0.7
<31
days
£m
0.4
0.8
31-60
days
£m
0.6
0.2
61-90
days
£m
0.1
0.1
2015
2014
£m
0.6
0.2
(0.1)
0.7
91+
days
£m
0.1
0.2
Of the trade receivables that are neither past due nor impaired by value, 7.8% (2014: 19.2%) reflects new customers with no previous history
of default, 51.0% (2014: 71.5%) represents existing customers with no history of default and 41.2% (2014: 9.3%) represents existing customers
with some history of default.
21. T r Ad e AN d oTH e r pAYAB Le S
Trade payables
Other related parties: Ram Brewery Trust ii
Other tax and social security
Other creditors
Accruals and deferred income
Group
Company
2015
£m
12.1
–
6.2
6.7
4.2
2014
£m
11.6
0.3
5.8
7.0
4.5
2015
£m
11.7
0.2
6.0
6.2
3.8
2014
£m
11.5
0.3
5.8
6.3
4.0
29.2
29.2
27.9
27.9
All trade payables are payable on demand and the carrying values above equate to fair value.
48
48
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
22. C A pITAL m AN AG eme NT AN d FINANCIAL INST r Ume NTS
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
Board monitors its capital using gearing ratios, such as net debt as a multiple of EBiTDA and interest cover. The group finances the business with a
mixture of equity (note 25) and debt (note 27).
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, liquidity and cash flow. Other risks that the group faces are referred to in the principal risks and
uncertainty section starting on page 8. The Board seeks to manage the financial risks 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.
2015
2014
Increase/
decrease
in %
effect on profit
before tax
£m
+1.0
–0.5
+1.0
–0.5
(0.490)
0.245
(0.250)
0.125
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.
(a) Derivative financial instruments: interest rate swaps
Financial liability – interest rate swaps
Fair value movement of interest rate swaps taken to equity
Group and company
2015
£m
(12.0)
(3.6)
2014
£m
(8.4)
5.6
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.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 49
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
22. C A pITAL m AN AG e m e NT AN d F I NAN C IAL I N ST rUm e NTS ( C o NTI N Ue d)
(b) Loans, borrowings, interest rates and fair values
2015
Secured
£20 million loan swapped into fixed rate
£30 million loan swapped into fixed rate
£20 million loan
£30 million loan swapped into fixed rate
£75 million revolving credit facility
Unsecured
Finance leases
Non-current financial liabilities
Current borrowings
Non-current financial liabilities
Financial liabilities
2014
Secured
£20 million loan swapped into fixed rate
£40 million loan swapped into fixed rate
£10 million loan
£30 million loan swapped into fixed rate
£75 million revolving credit facility
Unsecured
Finance leases
Non-current financial liabilities
Current borrowings
Non-current financial liabilities
Financial liabilities
Group and company
Term or
expiry date
Effective
interest rate
Period
rate fixed
march 2018
4.58%
march 2021 3.76% to 4.34%
Variable
march 2021
5.97%
march 2023
Variable
march 2019
3 years
6 years
None
8 years
None
Group and company
Term or
expiry date
Effective
interest rate
Period
rate fixed
4.58%
march 2018
4 years
march 2021 4.01% to 4.59% 1 to 7 years
None
march 2021
9 years
march 2023
None
march 2019
Variable
5.97%
Variable
Fair
value
2015
£m
21.6
32.3
19.9
37.8
23.9
Book
value
2015
£m
20.0
29.8
19.8
30.0
23.9
135.5
123.5
0.7
124.2
Group Company
2015
£m
5.0
2015
£m
6.0
124.2
124.2
129.2
130.2
Fair
value
2014
£m
21.5
40.7
9.9
35.7
14.3
Book
value
2014
£m
19.9
39.6
9.9
30.0
14.3
122.1
113.7
0.7
114.4
Group Company
2014
£m
–
114.4
114.4
2014
£m
–
114.4
114.4
The secured borrowings are secured on the assets of the group.
The fair values of borrowings and interest rate 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 £10 million overdraft facility with interest linked to the base rate. £5.0
million was drawn at the period end.
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 loan is repayable as to £20 million on 28 march 2018 and as to £30 million on 28 march 2023. The syndicated loan is
repayable on 17 march 2021. interest rate swaps have been entered into in respect of some of these bank loans which result in the effective interest
charge being fixed at the rates disclosed above.
50
50
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
revolving credit facility
The group has a £75 million revolving credit facility with the Royal Bank of Scotland and Barclays of which £24.5 million was drawn at the period
end. Final repayment of the total drawn down balance is due as one payment on 17 march 2019. This is a committed facility which permits
drawings of different amounts and for different periods. These drawings carry interest at a margin above LiBOR with a commitment payment on the
undrawn portions. interest is payable at each loan renewal date.
(c) maturity of the group’s financial liabilities and expiry of facilities
2015
Borrowings
Trade and other payables
Derivative financial instruments
2014
Borrowings
Trade and other payables
Derivative financial instruments
maturity of financial liabilities
Within
one year
£m
6.0
18.3
2.9
27.2
Within
one year
£m
0.6
16.6
3.1
20.3
Between
one and
two years
£m
Between
two and
five years
£m
1.3
–
3.1
4.4
Between
one and
two years
£m
1.1
–
3.0
4.1
48.0
–
8.2
56.2
Between
two and
five years
£m
39.0
–
8.5
47.5
After
five years
£m
82.6
–
5.0
87.6
After
five years
£m
83.6
–
7.7
91.3
Total
£m
137.9
18.3
19.2
175.4
Total
£m
124.3
16.6
22.3
163.2
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
Fair value
2015
£m
12.0
12.0
Group and company
Level 1
2015
£m
Level 2
2015
£m
–
–
Fair value
2014
£m
Level 1
2014
£m
8.4
8.4
–
–
Level 3
2015
£m
–
–
Level 3
2014
£m
–
–
12.0
12.0
Level 2
2014
£m
8.4
8.4
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.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 51
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
23. d e F e r r e d TA X
Deferred tax relates to the following:
deferred tax assets
interest rate swaps
Retirement benefit schemes
Decelerated capital allowances
Capital losses
Share based payments
deferred tax liabilities
Rolled over gains and property revaluations
Fair value gains on acquisition of subsidiaries
Group
Company
2015
£m
2014
£m
2015
£m
2014
£m
2.4
2.8
1.1
0.9
0.5
7.7
1.7
1.2
0.8
0.9
0.2
4.8
2.4
2.8
1.0
0.9
0.5
7.6
(53.6)
(6.2)
(59.8)
(49.1)
(5.3)
(54.4)
(52.6)
–
(52.6)
1.7
1.2
0.8
0.9
0.2
4.8
(48.4)
–
(48.4)
Net deferred tax liabilities
(52.1)
(49.6)
(45.0)
(43.6)
Opening balance
Tax (expense)/credit in the income statement
Tax (expense)/credit in the statement of comprehensive income
Tax credit recognised directly in equity
Deferred tax acquired in business combinations
Closing balance
Group
Company
2015
£m
(49.6)
(1.5)
–
0.1
(1.1)
(52.1)
2014
£m
(51.3)
2.3
(0.7)
0.1
–
(49.6)
2015
£m
(43.6)
(1.6)
0.3
0.1
(0.2)
(45.0)
2014
£m
(44.7)
1.3
(0.3)
0.1
–
(43.6)
The deferred tax assets and liabilities at the balance sheet date are calculated at the substantively enacted rate of 20%.
The group has realised capital losses of £6.1 million (2014: £5.6 million), which are available indefinitely to offset against future capital gains.
A deferred tax asset has not been recognised in respect of £1.6 million (2014: £1.3 million) of these losses because at present it is unclear whether
suitable gains will arise in the foreseeable future to utilise them. The company has realised capital losses of £4.5 million (2014: £4.3 million).
A deferred tax asset has been recognised in respect of these losses in both the current and prior period.
in addition, the group has unrealised capital losses of £15.2 million (2014: £15.3 million). No deferred tax asset has been recognised in respect
of these losses (2014: £nil) because it is uncertain whether they will be utilised. The company has unrealised capital losses of £12.8 million
(2014: £13.0 million). No deferred tax asset has been recognised in respect of these losses (2014: £0.1 million recognised).
52
52
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
24. r eT Ir e m e NT B e N e F I T S C H e m e S
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 aggregate contribution to the defined contribution scheme was £0.5 million (2014: £0.3 million).
independent, professionally qualified actuarial advice is sought to determine the liabilities arising from the defined benefit scheme, using the projected
unit credit method. The scheme is formally valued every three years. The obligations under the scheme consist mainly of a final salary scheme which
provides members with benefits based on length of service and salary.
Through its defined benefit scheme and post retirement health care scheme the group is exposed to a number of risks which are referred to in the
principal risks and uncertainties section starting on page 8.
The employer contribution to the defined benefit scheme for the period ended 30 march 2015 was £2.4 million (2014: £0.7 million) plus premiums of
£0.2 million (2014: £0.2 million) to the post retirement health care scheme. The current arrangement as regards contribution rates is described in the
relevant Schedule of Contributions.
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 2016 financial period are expected to be £2.8 million which includes
a special contribution of £2.5 million. The total contributions to the post retirement health care scheme in the 2016 financial period are expected to be
£0.2 million.
The defined benefit scheme is closed to new entrants. Consequently the current service cost will increase as the members of that scheme
approach retirement.
A settlement gain of £0.2 million was recorded during the current period within the pension scheme in relation to members who have left the scheme.
Financial assumptions
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
Pension
health care
2015
%
3.20
3.20
2.20
3.30
3.20
N/A
2014
%
3.50
3.50
2.50
4.60
3.50
N/A
2015
%
N/A
N/A
N/A
3.30
3.20
9.00
2015
Years
22.7
24.8
24.8
27.1
2014
%
N/A
N/A
N/A
4.60
3.50
9.00
2014
Years
22.8
25.2
24.7
27.1
At the period end date the average age of current pensioners was 71 years (2014: 70 years) and for future pensioners was 53 years (2014: 52 years).
The weighted average duration of liabilities for the current period was 18.7 years (2014: 17.5 years).
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
Increase
£m
decrease
£m
–
0.5
–
(0.4)
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 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 9.2%
increase/decrease by 8.0%
increase by 4.3%
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 53
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
24. r eT Ir e m e NT B e N e F I T S C H e m e S ( C o NTI N Ue d)
pension scheme and health care scheme assets and liabilities
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
Assets and liabilities
2014
£m
2015
£m
29.8
10.4
12.0
53.3
11.2
(1.0)
27.8
9.4
11.0
46.4
12.3
(1.6)
115.7
(128.8)
105.3
(111.3)
(13.1)
(6.0)
The pension scheme assets includes some of the company’s A shares with a fair value of £3.8 million (2014: £4.4 million). There are no property
assets of the scheme occupied by the company.
Of the above assets, £105.5 million are quoted securities.
movement in scheme deficits in the period
Group and company
2015
Health
care
scheme
£m
pension
scheme
£m
(a) Changes in the present value of the schemes are as follows:
Opening deficit
Current service cost
Settlement gain
Contributions
Other finance charges
Remeasurement through other comprehensive income
Closing deficit
(b) Recognised in the income statement
Current service cost included in operating costs
Settlement gain
(1.5)
(0.6)
0.2
2.4
–
(9.1)
(8.6)
(0.6)
0.2
(0.4)
(4.5)
–
–
0.2
(0.2)
–
(4.5)
–
–
–
Net interest expense
–
(0.2)
(c) Recognised in the statement of comprehensive income
Experience gains arising on the scheme liabilities
(Loss)/gain from change in demographic assumptions
Gain/(loss) from change in financial assumptions
Remeasurement of obligations
Return on scheme assets (less amounts included
in the net interest expense)
Net remeasurement recognised
0.9
–
(17.0)
(16.1)
7.0
(9.1)
0.3
–
(0.3)
–
–
–
Pension
scheme
£m
2014
health
care
scheme
£m
(4.2)
(0.7)
–
0.7
(0.2)
2.9
(1.5)
0.7
–
0.7
(4.6)
–
–
0.2
(0.2)
0.1
(4.5)
–
–
–
Total
£m
(8.8)
(0.7)
–
0.9
(0.4)
3.0
(6.0)
0.7
–
0.7
(0.2)
(0.2)
(0.4)
2.8
–
0.2
3.0
(0.1)
2.9
0.1
–
–
0.1
–
0.1
2.9
–
0.2
3.1
(0.1)
3.0
Total
£m
(6.0)
(0.6)
0.2
2.6
(0.2)
(9.1)
(13.1)
(0.6)
0.2
(0.4)
(0.2)
1.2
–
(17.3)
(16.1)
7.0
(9.1)
54
54
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
2015
Health
care
scheme
£m
pension
scheme
£m
Group and company
Total
£m
Pension
scheme
£m
2014
health
care
scheme
£m
(d) movements in the present value of scheme obligations during the period
Opening defined benefit obligations
Current service cost
interest on obligations
Contributions by scheme members
Remeasurement of obligations
Benefits paid
(106.8)
(0.4)
(4.8)
(0.1)
(16.1)
3.9
(4.5)
–
(0.2)
–
–
0.2
(111.3)
(0.4)
(5.0)
(0.1)
(16.1)
4.1
(108.0)
(0.7)
(4.8)
(0.1)
3.0
3.8
present value of scheme liabilities
(124.3)
(4.5)
(128.8)
(106.8)
(e) Change in fair value of scheme assets
Opening fair value of scheme assets
interest on scheme assets
Return on scheme assets (less amounts included
in the net interest expense)
Contributions by employer
Contributions by scheme members
Benefits paid
105.3
4.8
7.0
2.4
0.1
(3.9)
–
–
–
0.2
–
(0.2)
105.3
4.8
7.0
2.6
0.1
(4.1)
103.8
4.6
(0.1)
0.7
0.1
(3.8)
Fair value of scheme assets
115.7
–
115.7
105.3
(4.6)
–
(0.2)
–
0.1
0.2
(4.5)
–
–
–
0.2
–
(0.2)
–
Total
£m
(112.6)
(0.7)
(5.0)
(0.1)
3.1
4.0
(111.3)
103.8
4.6
(0.1)
0.9
0.1
(4.0)
105.3
25. S HAr e CAp ITAL AN d r e S e rVe S
Issued and fully paid shares – 12.5p each
Opening balance
issued under employee share schemes
2015
Shares
2015
£000
2014
Shares
2014
£000
48,290,292
6,036
48,224,000
6,028
163,307
21
66,292
8
Closing balance
48,453,599
6,057
48,290,292
6,036
Of the opening balance of 48,290,292 shares, 29,130,292 are A shares and 19,160,000 are non-voting shares (2014: 29,064,000 A shares,
19,160,000 non-voting shares). Of the closing balance of 48,453,599 shares, 29,293,599 are A shares and 19,160,000 are non-voting shares
(2014: 29,130,292 A shares, 19,160,000 non-voting shares).
The A shares issued in the current period relate to directors’ emoluments (note 8(b)) and the share awards (note 26).
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.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 55
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
26. S HAr e AWAr d S
The group operates two types of share based payment arrangements: a senior management deferred bonus scheme (“DBS”) and a Save-As-
You-Earn (“SAYE”) scheme.
(a) dBS
This scheme is designed to incentivise directors and certain other senior management to deliver long-term superior shareholder returns. For
the directors, half of any bonus is to be settled in shares, with the other half being paid in cash except to the extent that the director elects to
receive all or part of it in shares instead. For the senior management, there is no requirement for them to take any of their bonus in shares, but
they may elect to take up to half in this way. For every share taken in place of cash, the individual is allowed to subscribe at nominal value for
one ‘matching’ share. None of the individuals 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. During the restricted period the individuals are entitled to retain any dividends paid on their shares. 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 a particular period exceeds the same measure for an earlier financial period. Any of the shares acquired,
whether ‘matching’ or otherwise, are liable to forfeiture in certain circumstances. The number of shares to be issued to an individual in order to
fulfil his entitlement is 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.
The following table summarises the shares issued under the DBS. These shares are registered in the relevant individual’s name and, save as
explained above, are fully vested.
matching
shares
(Y/N)
Date of award
Stephen Goodyear
Torquil Sligo-Young
Peter Whitehead
Patrick Dardis
Edward Turner
Rupert Clevely
Senior management employees
June 2013
June 2013
June 2014
June 2014
June 2013
June 2014
June 2014
June 2013
June 2013
June 2014
June 2014
June 2013
June 2014
June 2014
June 2014
June 2013
June 2013
June 2013
June 2014
June 2014
N
Y
N
Y
N
N
Y
N
Y
N
Y
N
N
Y
N
N
N
Y
N
Y
At
1 April
2014
18,487
9,243
–
–
5,284
–
–
12,365
6,182
–
–
6,801
–
–
–
3,081
2,416
1,208
–
–
Awarded
during
the period
At
30 march
2015
issue
price
(pence)
Performance
period
–
–
32,478
16,239
–
12,599
6,299
–
–
21,744
10,872
–
21,744
10,872
8,854
–
–
–
10,547
10,547
18,487
9,243
32,478
16,239
5,284
12,599
6,299
12,365
6,182
21,744
10,872
6,801
21,744
10,872
8,854
3,081
2,416
1,208
10,547
10,547
827.5
12.5
960.0
12.5
827.5
960.0
12.5
827.5
12.5
960.0
12.5
827.5
960.0
12.5
960.0
827.5
827.5
12.5
960.0
12.5
Apr-13 to mar-16
Apr-14 to mar-17
Apr-14 to mar-17
Apr-13 to mar-16
Apr-14 to mar-17
Apr-14 to mar-17
Apr-13 to mar-16
Apr-14 to mar-17
65,067
162,795
227,862
The group’s adjusted earnings per share performance conditions set a range for the adjusted earnings per share for the period end march 2016
and march 2017 are not disclosed due to commercial sensitivity. Based on the recent performance of the group and assuming this performance
continues, it is anticipated that the maximum target for the adjusted earnings per share performance condition will be met.
A charge of £0.1 million (2014: £nil), was made to the group and company income statements in respect of the 71,462 ‘matching’ shares
outstanding at 30 march 2015.
(b) SAYe
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 with the proceeds of a related SAYE savings contract then being used to acquire shares at a later date if the option holders
choose to do so. 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.
in the current period, options over 43,023 A shares (2014: 27,542 A shares) were granted under the SAYE scheme on 17 July 2014 at an
exercise price of 840.0p per share (2014: 662.0p per share). Subject to the participants remaining in the employment of the group and making
36 monthly contributions, these options will be exercisable between 1 September 2017 and 28 February 2018.
Options over 137,104 A shares were outstanding at the beginning of the period. During the period, a total of 9,665 options lapsed. A further
512 options were exercised at 488.0p per share resulting in an increase in share capital of £64 and an increase in share premium of £2,435.
A charge of £0.1 million (2014: £0.1 million), valued using the Black-Scholes option pricing model, was made to the group and company income
statements in respect of these options in the period. As at 30 march 2015 options over 169,950 A shares remain outstanding.
56
56
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
27. N e T CAS H G e N e r ATe d F r o m o pe r ATI o N S AN d ANALYS I S o F N eT d e BT
Group
Company
profit before tax on continuing operations
Net finance cost
Other finance charges
operating profit on continuing operations
Depreciation
movement on revaluation of properties
Net profit on sales of property and associated goodwill
Pension scheme settlement gain
Difference between pension service cost and cash contributions paid
Share based payments
Provision for capital gains tax on ESOP Trust allocated shares
movements in working capital
- inventories
- Receivables
- Payables
2015
£m
36.1
5.2
0.2
41.5
14.8
(4.2)
(0.9)
(0.2)
(2.0)
0.2
0.2
(0.1)
0.4
0.9
2014
£m
26.6
5.6
0.4
32.6
12.5
(0.3)
–
–
(0.2)
0.1
0.3
(0.1)
(1.7)
4.1
2015
£m
2014
£m
30.9
4.1
0.2
35.2
12.2
(4.3)
(1.5)
(0.2)
(2.0)
0.2
0.2
–
(0.9)
1.1
21.5
4.7
0.4
26.6
10.0
(0.3)
–
–
(0.2)
0.1
0.3
(0.1)
3.0
3.7
43.1
Net cash generated from operations
50.6
47.3
40.0
Analysis of net debt
Cash
Loan capital and finance leases
Net debt
Group
Company
2015
£m
0.2
(129.2)
2014
£m
2.4
(114.4)
2015
£m
0.2
(130.2)
(129.0)
(112.0)
(130.0)
2014
£m
1.3
(114.4)
(113.1)
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 57
N oT e S To T H e F I N A N C I A L S TAT e m e N T S
C O N T i N U E D
28. r e LATe d pA rT Y Tr AN SAC TI o N S
Balances and transactions between the company and its wholly owned subsidiaries have been eliminated on consolidation and are not disclosed
in this note; they were on an arm’s length basis and are disclosed in note 20. The transactions in the current period were £3.9 million
(2014: £3.7 million) and mostly relate to the provision of payroll and administration recharges.
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 21 and in notes 8(d) and (e) and 26.
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
£10,253 (2014: £9,787) and is included in the Benefits column for Rupert Clevely in note 8b;
• 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 £55,010 (2014: £59,741). No amount was outstanding at 30 march 2015 (2014: £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 received
£132,942 (2014: £149,991). £10,674 was outstanding at 30 march 2015 (2014: £36,463).
No other transactions requiring disclosure have been entered into with the directors.
Former director
Roy Summers, a former non-executive director, advises on the quality of the company’s own-brand beers brewed in Bedford by Charles Wells
Brewery Limited, formerly known as Wells & Young’s Brewing Company Limited, and also assists with quality monitoring. For these services (and
inclusive of expenses) he received £12,745 (2014: £14,549). £1,584 was outstanding at 30 march 2015 (2014: £1,790).
pension scheme and trusts
The Young & Co.’s Brewery, P.L.C. Pension Scheme 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 30 march 2015, the pension scheme held
387,541 A shares (2014: 477,769), being 1.32% of the class.
The trusts affecting the General Fund, formerly part of the Ram Brewery Trust, were terminated during the period ended 30 march 2015. As
such, Ram Brewery Trustees Limited (“RBTL”), the former manager of the fund and a company that had no other activities, ceased to serve any
useful purpose and it applied to have itself struck-off. This application was accepted by the registrar of companies and RBTL was dissolved in
January 2015.
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 30 march 2015 the trust held 635,064 A shares (2014: 680,856), being 2.17% 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.
in addition, the group made employers national insurance contributions of £0.2 million (2014: £0.2 million) and incurred a share based payment
of £0.1 million (2014: £nil).
58
58
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
29. o B LI GATI o N S U N d e r Le AS e S
(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
2015
£m
2014
£m
2015
£m
2014
£m
0.1
0.2
2.5
2.8
(2.1)
0.7
–
–
0.7
0.7
0.1
0.2
2.6
2.9
(2.2)
0.7
–
–
0.7
0.7
0.1
0.2
2.5
2.8
(2.1)
0.7
–
–
0.7
0.7
0.1
0.2
2.6
2.9
(2.2)
0.7
–
–
0.7
0.7
Future minimum rentals receivable from non-cancellable subleases on the above properties as at 30 march 2015 were £0.2 million (2014: £0.1 million).
(b) Operating lease agreements where the group is lessee
Operating leases for property are for terms ranging from one 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
6.2
19.8
35.1
61.1
5.8
18.5
35.7
60.0
3.0
10.5
19.9
33.4
2.8
10.4
22.2
35.4
Future minimum rentals receivable from non-cancellable subleases on the above properties as at 30 march 2015 were £1.2 million (2014: £0.9 million).
(c) Operating lease agreements where the group is lessor
The group leases licensed properties to third party tenants. These non-cancellable leases are over terms varying from one to 21 years.
Future minimum rentals receivable under non-cancellable operating leases are as follows:
3.6
- Not later than one year
5.9
- Later than one year and not later than five years
9.4
- Later than five years
3.4
4.6
7.3
3.4
5.9
9.4
18.9
15.3
18.7
3.4
4.6
7.3
15.3
30. p o ST BALANC e SH ee T e Ve NTS
There were no post balance sheet events apart from the acquisition of the Canonbury (islington) and the disposal of the Seven Stars (Brighton).
We have also exchanged contracts for the sale of the New Town (Sutton).
31. Co NTING eNT LIAB ILI TI eS
There were no contingent liabilities at the current or prior period balance sheet date.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 59
F I V e Y e A r r e V I e W
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
revenue
227.0
210.8
193.7
179.0
142.6
2015
£m
2014
£m
2013
£m
2012
£m
2011
£m
operating profit before exceptional items
Operating exceptional items
Net finance costs and other finance charges
profit/(loss) before tax
Taxation (charge)/credit
Profit/(loss) from continuing operations
(Loss)/profit from discontinued operation
Profit/(loss) for the period
Adjusted profit before tax
Net assets employed
Non-current assets
Current assets and assets held for sale
Current liabilities
Non-current liabilities
Financed by
Share capital
Reserves
37.4
4.1
(5.4)
36.1
(9.4)
26.7
–
26.7
32.0
33.2
(0.6)
(6.0)
26.6
(4.5)
22.1
–
22.1
27.2
28.9
(1.8)
(5.7)
21.4
(5.0)
16.4
–
16.4
23.2
26.1
(28.8)
(4.8)
(7.5)
2.1
(5.4)
(1.1)
(6.5)
21.3
21.8
(4.9)
(3.6)
13.3
2.6
15.9
1.9
17.8
18.2
645.9
8.4
(38.2)
(209.1)
584.4
10.9
(32.4)
(183.2)
543.4
17.6
(36.7)
(189.8)
526.9
16.2
(28.5)
(196.9)
356.5
9.4
(30.7)
(153.7)
407.0
379.7
334.5
317.7
181.5
6.1
400.9
407.0
6.0
373.7
379.7
33.6
6.0
328.5
334.5
20.5
6.0
311.7
317.7
25.6
6.0
175.5
181.5
78.6
purchase of fixed assets and business combinations
50.9
Net debt
(129.0)
(112.0)
(112.6)
(118.1)
(122.6)
per 12.5p ordinary share
Adjusted basic earnings from continuing operations
Basic earnings/(loss) from continuing operations
Dividends – paid in period
50.62
55.17
15.97
42.88
45.72
15.06
36.34
33.78
14.27
33.41
(11.13)
13.58
28.36
32.89
13.12
pence
Pence
Pence
Pence
Pence
Gearing
31.7%
29.5%
33.7%
37.2%
67.6%
Average number of employees
3,496
3,357
3,242
2,985
2,335
60
60
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
N oT I Ce o F m e e T I N G
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
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, 5 July 2015. 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 126th 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, 7 July 2015 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 30 march 2015, together with the strategic report, directors’ report
and the auditor’s report on those accounts and reports.
2. To declare a final dividend of 8.56p per share for the financial year ended 30 march 2015.
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 Torquil Sligo-Young be, and is hereby, re-appointed as a director.
6. That Peter Whitehead be, and is hereby, re-appointed as a director.
7. That Roger Lambert be, and is hereby, re-appointed as a director.
8. That Patricia Corzine 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 2016) 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 £2,018,800 (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 £4,037,600 (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,
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
2016) 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.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 61
N oT I Ce o F m e e T I N G
C O N T i N U E D
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 £302,834,
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 2016)
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 4,845,359 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 that may be paid for an Ordinary Share is the nominal
amount of that share and the maximum price that may be paid for an Ordinary Share is an amount equal to 5% 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
2016) 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
20 may 2015
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
62
62
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
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, 6 July 2015 (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, 5 July 2015.
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 2015 63
N oT I Ce o F m e e T I N G
C O N T i N U E D
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
(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 2015 annual report or any proxy form for the Company’s 126th annual general meeting may not be used to communicate with the
Company for any purpose other than any expressly stated.
64
64
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
e X p L A N ATo rY N oT e S To T H e N oT I C e o F m e e T I N G
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Notice of the 126th annual general meeting of Young & Co.’s
Brewery, p.L.C. (the “Company”) to be held on Tuesday,
7 july 2015 is set out on pages 61 to 64. 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 strategic report, directors’ report and the auditor’s
report on those accounts and reports before you at a general
meeting; this is a legal requirement.
Resolution 2: final dividend
An interim dividend of 7.90p per share was paid in December
2014. The directors are recommending a final dividend of 8.56p
per share for the year ended 30 march 2015, bringing the total
dividend for the year to 16.46p per share. Subject to approval
being given, the final dividend is expected to be paid on 9 July
2015 to shareholders on the register at the close of business on
12 June 2015.
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 Torquil Sligo-Young, Peter Whitehead, Roger Lambert and
David Page 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.
Patricia (‘Trish’) Corzine will also be retiring automatically from the
office of director at the meeting; this is because she was appointed
by the board since the last annual general meeting. All of these
individuals (apart from David Page) are seeking re-appointment
and their brief biographical details are on page 16. As a result of
not seeking re-appointment, David Page will be retiring from the
board at the end of the AGm.
Resolution 9: political donations etc.
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 £2,018,800 –
this amount represents approximately one-third of the Company’s
issued share capital as at 19 may 2015 (but would be reduced by
the nominal amount of any shares allotted or rights granted under
paragraph (b) of this resolution in excess of £2,018,800). in line
with guidance issued by the investment Association, 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 £4,037,600, 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 19 may 2015. Therefore
the maximum nominal amount of shares and rights that may
be allotted or granted under this resolution is £4,037,600. 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 2016). 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 £302,834. This aggregate
nominal amount represents approximately 5% of the Company’s
issued share capital as at 19 may 2015. 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 2016).
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 4,845,359
of its shares, being no more than 10% of its issued share capital
as at 19 may 2015. 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 2016). 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, that may be paid for
a share is its nominal value. The maximum price, exclusive of
expenses, that 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 2015, there were options outstanding
over 169,269 A shares, representing 0.35% 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 0.44% of the Company’s issued share
capital. No warrants to subscribe for shares are outstanding.
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 65
p U B S A N d H oT e LS
London and the surrounding areas
Stow on the Wold
Bell at Stow H
oxford
Angel & Greyhound
King’s Arms
radlett
Red Lion hotel H
Hendon
Beaufort
Greyhound T
kilburn
Queen’s Arms T
Harlesden
Grand Junction Arms T
Greenford
Bridge hotel H
kew
Coach & horses H
richmond
Lass O’Richmond hill
marlborough
Old Ship
Orange Tree H
Red Cow T
Shaftesbury
Waterman’s Arms T
White Cross
kingston
Albert
Bishop
Grey horse T
Spring Grove
Surbiton
Black Lion T
Victoria
Waggon & horses T
ealing
Grange
New inn T
Shepherd’s Bush
Bull (Westfield) G
Eagle G
Defector’s Weld
Hammersmith
Brook Green hotel H
Butchers hook T
hammersmith Ram
Old Ship
mortlake
Jolly Gardeners T
east Sheen
hare & hounds
Barnes
Bull’s head G
Coach & horses
White hart
putney
Boathouse
Coat and Badge G
Duke’s head
Green man
half moon G
Spotted horse
roehampton
Angel T
King’s head
Wimbledon
Alexandra
Bayee Village T
Crooked Billet
Dog & Fox H
Fire Stables
hand in hand
Rose & Crown H
epsom
King’s Arms T
Rising Sun T
Walton-on-the-Hill
Chequers
maida Vale
Prince Alfred
Notting Hill
Duke of Wellington
Elgin G
paddington
Porchester
Bayswater
mitre
kensington
Britannia
Curtains Up G
Duke of Clarence G
Fulham
Cock Tavern
Duke on the Green
Waterside
Wandsworth
Alma H
Armoury T
Brewers inn H
County Arms
East hill G
Gardeners’ T
Grand Union T
Grapes T
Old Sergeant T
Pig & Whistle T
Queen Adelaide
Ship
Spread Eagle T
Waterfront
earlsfield
halfway house
Leather Bottle
Sutton
Lord Nelson T
Robin hood T
Chelsea
Builder’s Arms G
Chelsea Ram G
Cooper’s Arms
hollywood Arms
King’s Arms G
Phoenix G
Surprise G
Battersea
Duke of Cambridge
Northcote G
Plough
Prince Albert G
Clapham
Clapham North T
Windmill H
Balham
Devonshire
Grove
Nightingale
Tooting
Castle
mitcham
King’s Arms T
Carshalton
Greyhound H
Heathrow Airport
Five Tuns G
Three Bells G
Isleworth
Castle T
Coach & horses
Twickenham
Alexander Pope H
Teddington
Abercorn Arms T
Staines
Bells T
Walton-on-Thames
Royal George T
Swan
Chertsey
Crown hotel H
Weybridge
hand & Spear
esher
Bear inn H
Claygate
Foley H
oxshott
Bear
Southern England
exeter
City Gate H
Double Locks
exmouth
Grove
Sidmouth
Swan T
Burnham-on-Sea
Dunstan house inn H
Congresbury
Old inn T
Wrington
Plough inn T
Broadway, Nr Illminster
Bell inn T
Somerton
Unicorn T
Sherston
Rattlebone T
Littleton-on-Severn
White hart
Bristol
Bristol Ram T
highbury Vaults
horts
Rope Walk T
keynsham
Lock Keeper
Castle Cary
horse Pond T
66
66
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
Chelmsford
O’Connor’s T
Riverside inn T
Clapton
Princess of Wales G
Stratford
Cow (Westfield) G
Bethnal Green
Royal Oak T
Bow
Coborn
Crown G
Stepney
Queen’s head T
Shoreditch
Owl & Pussycat G
City of London
Albion
Boisdales T
Dirty Dick’s
Finch’s
Fox & Anchor H
Lamb Tavern
Oyster Shed G
Paternoster
Three Lords T
White horse G
Barnet
Lord Nelson T
Winchmore Hill
Kings head G
Hampstead
Flask
Roebuck
Tufnell park
Lord Palmerston T
kentish Town
Bull & Gate
Lion & Unicorn G
Islington
Canonbury
Castle G
Duchess of Kent G
John Salt
King’s head
marquess Tavern T
Narrowboat
primrose Hill
Queens
Camden
Spread Eagle
king’s Cross &
St pancras Station
Betjeman Arms G
Curious Pig G
Fellow G
Bloomsbury
Calthorpe Arms T
Lamb
Clerkenwell
Sekforde Arms T
Covent Garden
marquess of Anglesey
euston
Square Tavern T
Fitzrovia
Adam & Eve G
One Tun
mayfair
Guinea
Windmill
Borough market
Bunch of Grapes
Wheatsheaf
Southwark
Founders’ Arms
mulberry Bush
Prince William henry T
dartford
Court house T
malt Shovel T
Greenwich
Cutty Sark
Richard the First
Woolwich
Dial Arch
rotherhithe
Ship T
Catford
Catford Ram T
Bromley
Two Doves T
Lee
Crown
Chislehurst
Bull’s head hotel H
key
Young’s managed house unless marked
Tenanted
Geronimo
hotel
T
G
H
peckham rye
Clock house
dulwich
Wood house
Norwood
hope T
Railway Bell T
kennington
White Bear
Camberwell
Grand Union T
Thornton Heath
Lord Napier T
Railway Telegraph T
Croydon
Dog & Bull T
marylebone
Lord Wargrave T
Westminster
Buckingham Arms
Clarence G
morpeth Arms
Phoenix G
Royal Oak T
pimlico
Fox & hounds T
Rising Sun T
Vauxhall
Fentiman Arms G
Riverside
Stockwell
Surprise T
Brixton
Trinity Arms
Grand Union T
Streatham
Bull
Wallington
Duke’s head H
Beddington
Plough
Sherfield-on-Loddon
White hart
Fetcham
Bell
Leatherhead
Penny Black
effingham
Plough T
Betchworth
Dolphin
Hindon
Lamb inn H
Shaftesbury
mitre
Guildford
Weyside
Witley
White hart T
emsworth
Sussex Brewery T
dorking
Falkland Arms T
Old house at home T
Stonebridge
Royal Oak T
Southampton
mavericks T
Chichester
Crown & Anchor
Bognor regis
Waverley
redhill
home Cottage
William iV T
Farnborough
Rose & Crown
Blindley Heath
Red Barn G
Lingfield
Greyhound T
east Grinstead
Ship T
plumpton Green
Fountain inn T
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015 67
S e N I o r p e r S o N N e L , C o m m I T T e e S A N d A dV I S e r S
STRATEGiC REPORT
DiRECTORS’ REPORT
FiNANCiAL STATEmENTS
ShAREhOLDER iNFORmATiON
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 Lawrence Graham & Co LLp
Two Snowhill
Birmingham
B4 6Wr
directors
Nicholas Bryan, B.A., F.C.A.
Non-executive Chairman
Stephen Goodyear
Chief executive
Torquil Sligo-Young
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
david page
Non-executive
patricia (‘Trish’) Corzine
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 H Ar e H o L d e r I N F o r m AT I o N
registrar
Shareholder offers
proposed financial diary 2015
The company’s registrar is Computershare
details of shareholder discounts and offers
11 june 2015
Investor Services pLC.
are mailed to shareholders from time to
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.
time. Any shareholder who does not wish
to receive details of such offers should
write to the Company Secretary at the
registered office.
registered office and
company number
All requests to amend account details must
riverside House
26 osiers road
Wandsworth
London SW18 1NH
registered number: 32762
Further information
please visit: www.youngs.co.uk
be made in writing to:
Computershare Investor Services pLC
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
12 june 2015
record date for final dividend
7 july 2015
Annual general meeting
9 july 2015
payment of final dividend
12 November 2015
Interim results announcement
26 November 2015
ex-dividend date for interim dividend
27 November 2015
record date for interim dividend
4 december 2015
payment of interim dividend
68
68
YOUNG & CO.’S BREWERY, P. L .C. ANNUAL REPORT 2015
C H E E R S !
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