Annual Report
for the 52 weeks ended 28 March 2022
The Young’s difference
Highlights
Revenue
(£m)*
£309.0
2021: £88.0
Operating
profit/(loss) (£m)*
£51.7
2021: £(34.5)
Adjusted operating profit/(loss)
(£m)1*
£51.4
2021: £(33.2)
Adjusted profit/(loss) before tax
(£m)1*
£41.8
2021: £(43.2)
Profit/(loss) before
tax (£m)*
Net cash generated from
operations (£m)
£42.1
2021: £(44.5)
£107.0
2021: £(23.0)
Adjusted basic earnings/(loss)
per share1
Basic earnings/(loss)
per share
56.26p
2021: (66.63)p
58.83p
2021: (68.23)p
Dividend
per share
18.81p
2021: –
Net assets
per share2
11.97p
2021: 11.04p
* from continuing operations.
1 Reference to an ‘adjusted’ item means
that item has been adjusted to exclude
non-underlying costs (see notes 11 and 12).
2 Net assets per share are the group’s
net assets divided by the shares in issue
at the period end.
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The Young’s difference
Young’s pubs and hotels are at the heart of our
local communities in London and the south of
England. With more than 200 establishments,
our award-winning design approach means
excellence in ambience as well as service and
location. From poetic pubs steeped in history to
secret underground cocktail bars, the character
and individuality of each of our premises gives
them a unique feel. Our pubs have style and soul,
and the people who work with us have pride in
our culture and passion for the work they do.
Contents
Investing in our estate
Strategic Report
04 Chairman’s statement
06 Young’s at a glance
08
10 Our business model
12 Chief executive’s review
15 Our strategy
16 Key Performance Indicators
18 Our latest acquisitions
20 Section 172(1) statement
24 Sustainability report
40 Principle risks and uncertainties
45 Business and financial review
Corporate Governance
52 Chairman’s corporate governance statement
54 Board of directors
57 Leadership team
59 Corporate governance report
66 Audit committee report
72 Remuneration committee report
76 Directors’ report
Independent auditor’s report
Financial Statements
82
90 Group income statement
91 Group statement of comprehensive income
92 Balance sheets
93 Statements of cash flow
94 Group statement of changes in equity
95 Parent company statement of changes in equity
96 Notes to the financial statements
Shareholder Information
141 Notice of meeting
146 Explanatory notes to the notice of meeting
148 Senior personnel, committees, banks, advisers and others
148 Shareholder information
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
01
Strategic Report
Year in review
It has been another extraordinary year that began with all pubs in our estate
closed. Once open, record weeks began to tumble as customers flocked back.
Despite the challenges we faced along the way, there have been many highlights,
here are just a few.
June – July
The initial delay to ‘freedom day’ was disappointing just when the
country was riding a wave of positivity as England progressed to the
final of the UEFA European Football Championships. It was not until
19 July when all remaining restrictions would drop away.
August
Our hotels saw a boost during August with many families enjoying their
holidays in the UK once again. Recent investments in our hotels in Devon
and Poole (pictured above) were perfectly placed to capitalise on the
demand for domestic leisure travel during the school summer holidays.
April – May
We could not wait to open our pubs two weeks into the period, even
if trading restrictions limited our initial openings to 70% of our estate.
From 17 May, restrictions were relaxed to allow internal trading and
the remainder of our estate were up and running.
02
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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December
Early Christmas excitement was curtailed by the rapid spread of the
Omicron variant. This dealt a significant blow to everyone across the
hospitality industry as people hunkered down to protect their family
and planned festivities.
September
The sunshine helped us celebrate 190 years of Young’s with our famous
dray horses taking to the streets of Greenwich, starting at the Richard
the First, then vising the Cutty Sark, Old Brewery and ending at Enderby
House on the banks of the River Thames.
January – March
The start of the year began with our ‘Veganuary’ campaign as we
partnered with Matt Pritchard to launch the ‘Dirty Vegan’ burger.
February heralded the long-awaited return of the Six Nations, where
Diageo helped us host special one-off events throughout the tournament.
As we ended the year, the Guinea Grill (Mayfair) was crowned 7th in
the Estrella Damm’s top 50 Gastro pubs in the UK.
October – November
As we headed into Autumn, our fantastic external spaces once again
came into their own. Trading had come back stronger and excitement
had started to build ahead of the Christmas period. Our pubs in Central
London and the City had also started to see improvements with more
and more people returning to work in the office.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
03
Strategic Report
Chairman’s statement
“ These results
are testament
to the dedication,
professionalism and
hard work of the
Young’s team across
what was a disrupted
trading year.”
04
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
£309.0m
Revenue
£82.5m
Adjusted EBITDA from continuing operations
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In a year that continued to be overshadowed by covid-19, I am
enormously proud of Young’s performance, delivering adjusted
EBITDA from continuing operations of £82.5 million (2021:
loss of £1.3 million). Trade was strong from day one when initial
restrictions were lifted in April, and we were pleased to see
all our pubs and beer gardens full again from mid-July when
the final restrictions dropped away. Sadly, the Omicron variant
significantly dampened demand through the key Christmas
and New Year trading periods, however we finished the year
strongly, delivering turnover from continuing operations of
£309.0 million (2021: £88.0 million).
Our long-standing strategy of operating a differentiated,
premium, and well-invested pub estate remains unaltered.
This strategy was further supported by our decision during the
summer to withdraw from the tenanted model and focus solely
on our predominantly freehold managed pubs and hotels.
Young’s has been focused on steering a measured long-term
course through the covid-19 crisis and the decision to sell our
tenanted estate, combined with the financing decisions taken
during the summer of 2020, has given us significant financial
capacity to continue with our investment programme, investing
£73.7 million during the year. This included the acquisition of
nine new sites, most notably an extraordinary collection of six of
the finest pubs and hotels in and around Cheltenham, which are
an excellent addition to our pubs in the Cotswolds. Elsewhere,
we continued to invest in our existing estate including several
truly transformational projects, notably at the Grand Junction
Arms (Harlesden), King’s Head (Winchmore Hill) and the
Spread Eagle (Wandsworth) – where we created 21 boutique
bedrooms and transformed the pub back to its glorious former
Victorian best. These investments have added an additional
114 bedrooms, taking us to 802 bedrooms by the end of the
period. After a year of significant investment, the business
remains conservatively financed, with net debt of £173.8 million
(2021: £248.7 million), being 2.1 times adjusted EBITDA.
The board is delighted to recommend the reintroduction of
a final dividend of 10.26 pence. If approved by shareholders,
this will result in a total dividend for the year of 18.81 pence
(2021: no dividend) and it is expected to be paid on 7 July
2022 to shareholders on the register at the close of business
on 10 June 2022.
The Young’s board continues to evolve and, as previously
announced, Patrick Dardis will be stepping down as Chief
Executive at this year’s AGM on 5 July, following 20 years
with Young’s. He will be succeeded by Simon Dodd, who
brings significant experience built over a decade working in
the industry. He was recruited three years ago with succession
planning in mind and has delivered substantial strategic,
operational, and cultural progress since joining. We believe
that Simon’s excellent leadership skills, vision and operational
experience will be great assets to Young’s. Patrick will remain
on the board to oversee the transition to Simon until he retires
at the end of September. Happily, Patrick has agreed to stay on
in a consultancy role until the end of March 2023. I have really
enjoyed working with Patrick over the last 20 years. He has
worked very effectively and with great energy and passion for
the business. On behalf of the board, I would like to thank him
for his huge contribution and his many successful achievements
during his time at Young’s. I am looking forward to working
with Simon and a very talented executive team who will take
Young’s to the next chapter.
We were pleased to welcome Aisling Meany as a non-executive
director on 1 September 2021. She has considerable investment
banking, capital market, financial services and strategy
experience. We are very much looking forward to working
with her.
As a board we are passionate about building a sustainable
company, which is central to driving future growth and
delivering long-term value. We have a long-standing
commitment to driving a positive Environmental, Social, and
Governance (‘ESG’) agenda and the company has made
progress this year to formalise its approach. We are delighted
to have appointed our first sustainability manager who will be
supported by the board and wider leadership team. We are
equally pleased that Aisling has agreed to become the board’s
first designated non-executive director for ESG, supported by
the company secretary.
Finally, I would also like to personally thank Patrick and his
executive team of Mike, Simon, and Tracy, for their continued
exemplary leadership and support throughout the pandemic,
and also our shareholders for their continued loyalty during
such a demanding period. The ability to retain the momentum
in our business whilst maintaining the morale of the Young’s
team has meant that we were able to quickly open our pubs
and welcome back our loyal customers. Young’s remains a
sound resilient business, built on a firm financial footing with a
balanced, well-invested, and substantial estate of great pubs.
Stephen Goodyear
Chairman
18 May 2022
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
05
Strategic Report
Young’s at a glance
From stunning riverside terraces to flower-filled
garden huts, our collection of pubs have some of the
best gardens in London and the south of England.
Inside, our pubs have style and soul, and the people
who work with us have pride in our culture and
passion for the work they do.
1831
Established
£808.0m
Valuation of our estate
£771.1m
£773.7m
£808.0m
222
Pubs
40
3
2020
2021
2022
5,275
Employees
55.5
44.5
Female
Male
Managed
Freehold*
Tenanted
Leasehold
*
includes long leaseholds
802
Hotel rooms
1.2m
Cocktails sold
219
182
51
Burger Shacks
3.0m
App transactions
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Young & Co.’s Brewery, P.L.C. | Annual Report 2022
No. of pubs
Map ref
No. of pubs
South East
Map ref
No. of pubs
13. Kensington & Chelsea
14. Kingston-upon-Thames
9
5
25. Cambridgeshire
26. East Sussex
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South West
Map ref
31. Berkshire
32. Devon
33. Dorset
34. Gloucestershire
35. Hampshire
36. Oxfordshire
37. Wiltshire
No. of pubs
3
6
2
13
1
3
1
1
1
3
1
20
2
10
27. Hertfordshire
28. Kent
29. Surrey
30. West Sussex
2
6
1
14
7
3
6
28
14
Our locations
Greater London
Map ref
1. City of London
2. Barnet
3. Brent
4. Bromley
5. Camden
6. Ealing
7. Enfield
8. Greenwich
9. Hackney
8
1
1
2
15. Lambeth
16. Lewisham
11
17. Merton
4
1
8
3
18. Newham
19. Richmond
20. Southwark
21. Sutton
10. Hammersmith & Fulham 10
22. Tower Hamlets
11. Hounslow
12. Islington
1
10
23. Wandsworth
24. Westminster
Greater London
165
7
2
13
10
3
6
5
12
9
24
1
22
18
11
19
23
15
20
16
14
17
21
8
4
0
1-5
6-10
11-15
16-20
More than 20
25
34
36
27
31
35
37
33
29
30
28
26
South East
28
32
South West
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07
Strategic Report
Investing in our estate
Investing in our world-class pubs and hotels remains key to the success and
long-term growth of our business. During the period we invested £24.7m
in our existing managed estate, restoring iconic favourites and adding new
boutique bedrooms.
Chequers, Walton-on-the-Hill (below and right)
The complete transformation of this traditional country pub in the
picturesque village now boasts beautiful interiors with open fires, wood
panelled dining rooms, a traditional snug bar, and a bright and elegant
garden room. Complete with 6 new bespoke lodges that overlook the
best pub garden in Surrey, this popular dining destination is perfect for
casual catch-ups, spontaneous visits, and planned celebrations.
King’s Head, Winchmore Hill (above and left)
This jewel in North London has had it’s regal beauty restored both inside
and out. An elegant overhaul of the interior space included significant
work on the Green Room, an event space spanning the entire top
floor, with its own bar and facilities, perfect for weddings and other
celebrations. Outside, our large beer garden with increased covers is now
home to private huts and a fire pit fit for a King!
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Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Grand Junction Arms, Harlesden (below)
This old tenancy site perched on the Grand Union Canal has an
outstanding outdoor space that includes a spacious beer garden and
balcony. After significant investment, the pub is now complete with seven
garden lodges, our famous Burger Shack offering and a retractable roof
for all seasons of the year. Inside is a majestic Victorian pub finished to
the highest modern standards.
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Richard the First, Greenwich (above)
After purchasing the old Greenwich Union pub next door to our
beloved Richard the First, we took the opportunity to realise the site’s
potential and create one epic pub in the heart of Greenwich. Keeping the
traditional theme throughout, we now have a larger garden, cosy snug
seating and a lovely bar area.
Spread Eagle, Wandsworth (above and right)
Following its transfer from our tenanted division, this Grade II listed
Victorian pub has been sensitively restored to celebrate its past.
Stylish etched glass, reclaimed wooden floorboards, heritage colours and
brass fittings all combine to create an outstanding traditional British pub
complete with 21 boutique bedrooms in the heart of Wandsworth.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Strategic Report
Our business model
Our business model captures how we are a resilient business that delivers
value for all of our stakeholders in a sustainable, long-term way.
What we do
We manage, acquire and invest in
premium, differentiated pubs and
hotels in prime locations in London
and the south of England.
How we do it
Our competitive advantages enable
us to deliver sustainable growth and
provide the agility needed in the face
of unforeseen challenges.
Freehold estate
We run a predominantly
freehold estate that gives
us greater control and
opportunities within our
business and enables us to
negotiate better terms with
lenders, whilst allowing us to
also benefit from increases
in property values.
Premium pubs
We operate differentiated,
premium, mostly drink-led
managed pubs in London
and the south of England.
Our locations are mainly
in areas that have a high
proportion of affluent and
discerning customers.
People
• Depth of knowledge
and expertise
• Strong customer
relationships
• Reliable partners
• Unique culture
Revenue mix
• Our revenue mix is 61.5%
drink, 34.5% food and
4.0% accommodation
Diversified estate
• Freehold-rich estate
• Prime locations often
within walking distances
of public transport links
Buying power
• Buying power of our
managed estate to source
the best products at the
best prices
Our Values
Authentic
We’ve been around since 1831 and
see our heritage as the foundation
of our success. We’re proud of where
we’ve come from but have our sights
set firmly on the future.
Assured
We’re not humble but we are also
not show offs. We do things well, with
an understanding that in life, you get
what you pay for.
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The value we deliver
Our business creates value for our
stakeholders and economic value
in the regions where we operate.
Employees
• Creating rewarding careers
Suppliers
• Building long-standing
for our employees
Investors
• Sustainable financial returns
for our shareholders
Customers
• High quality service across
our pubs and hotels
relationships with
our suppliers
Society
• Contributing to our
local communities
Sustainable growth
We create long-term
sustainable growth through
strategic investments in our
estate, our people and our
communities, delivering value
for all of our stakeholders.
At Young’s, we go beyond
thinking about profit – we
are making investments that
not only build up the bottom
line, but also build up society.
Community
We are the centre of the community,
essential and well-loved by our
patrons, as essential and well-loved
as they are by us. We believe in local
community celebration.
Convivial
Premium yet personal hospitality.
Friendly, lively good humour.
Individual
From the late-night city bolt holes to the
sprawling neighbourhood centrepieces,
from ancient, oak-beamed village inns
to underground cocktail bars, our pubs
are as individual as the customers who
frequent them every day.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Strategic Report
Chief executive’s review
£51.7m
Operating profit*
£107.0m
Net cash generated
“ With this, my
final year as
Chief Executive,
I am delighted to
announce a strong
set of results that
reflect a return
to normalised
profitability with
unrestricted trading.”
*
from continuing operations
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In a period where our pubs remained closed for the first two
weeks, followed by varying restrictions until ‘freedom day’
in July, we found ourselves navigating challenges at nearly
every turn. Despite the storms, floods and tube strikes, or the
unwelcome arrival of the Omicron variant which hampered
our Christmas trading, our total revenue was up by 251.1%
to £309.0 million (2021: £88.0 million), with managed house
sales ahead of the two-year comparative by 2.9%. Total group
adjusted operating profit from continuing operations was
£51.4 million (2021: adjusted operating loss from continuing
operations of £33.2 million), with operating profit from
continuing operations of £51.7 million (2021: operating loss
from continuing operations of £34.5 million).
I would like to thank the teams across the business who have
worked so hard to deliver these great results in another year
of extraordinary circumstances. It has been a huge privilege
to lead the group for the past six years, culminating in a year
when Young’s celebrated its 190th birthday. I owe enormous
thanks to all my colleagues for their support, contribution and
dedication that has made Young’s the business it is today.
During the period we were able to move on from measures
introduced to steer us through the covid-19 pandemic. In May
2021, we began by repaying the £30.0 million borrowed
under the Bank of England’s Covid Corporate Financing Facility
and then didn’t need to extend the £20.0 million bilateral
revolving credit facility with NatWest that matured in November.
This marked an important step away from temporary finance
support measures.
The sale of most of the tenanted estate to Punch Pubs & Co for
£53.0 million was a defining moment in our strategy to focus
on operating predominantly freehold, individual, differentiated
and premium managed pubs and pubs with rooms. The sale
left us with seven tenanted pubs, three of which we have now
sold. One of the remaining pubs, the Grand Junction Arms
(Harlesden), now operates as a managed pub following a
major investment. This significant strategic move gave us cash
to further strengthen our balance sheet and extra capacity
both to invest in our existing estate and capitalise on attractive
acquisition opportunities that present themselves.
After a quiet period on the acquisition front last year, we made
some exciting investments. The most significant of these was the
acquisition of six pub and hotel assets from the Lucky Onion
group in Cheltenham and the Cotswolds during February
2022. These predominantly freehold premium pubs and hotels
perfectly complement our existing businesses in the area.
We also completed on three other single site acquisitions: the
Bull (Ditchling, Sussex), Pheasant (Lambourn, Berkshire) and
White Horse (Hascombe, Surrey).
With our focus on returning to normalised trade there was
a reluctance to close pubs for major projects. However,
maintaining a premium and well-invested pub estate through
continued investment is fundamental to our success, and
we spent £30.4 million on our existing business and new
head office. It has been a long-term strategic opportunity to
maximise the potential of certain assets within our tenanted
estate, and two standout examples were at the Grand Junction
Arms (Harlesden) and Ship Inn (East Grinstead) following their
transfer to our managed operation.
In line with our strategic objective to increase further our
freehold mix, we have been busy this year building our new
head office, Copper House, on the same site as the refurbished
Spread Eagle hotel, back in the heart of Wandsworth. It is
great to return to our spiritual home, directly opposite our old
brewery site where the story began in 1831.
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Young’s is a company with a long heritage, and we are
committed to building a business which nurtures and develops
our people, respects the environment, and makes a lasting
and positive contribution to the communities we operate in.
We recognise that operating sustainably is fundamental to
delivering long-term value for all our stakeholders and for the
future success of Young’s. Within our annual report, we have
included our first sustainability report, detailing the many things
we have achieved so far and the steps we are taking to embrace
a more structured approach to sustainability going forward.
It’s been a great start to the new financial year, for the last 13
weeks revenue was up 17.0% versus pre-pandemic levels of
2019 and up 38.5% for the last 5 weeks against 2021. Our well
invested gardens were perfectly primed to maximise on the
welcome sunshine for the Easter bank holiday, with some record
takes. We look forward to the extended Jubilee weekend where
we expect to break even more records.
Young’s is well placed to manage the impact of the current
inflationary environment on our cost base, with the ability to flex
our menus, our utilities hedged until March 2024 and having
recently renegotiated a large proportion of our drinks contracts.
However we are mindful of the potential impact that this
inflationary environment could have on consumer sentiment
and ultimately consumer spending.
In April, we launched our exciting new beer range including
a number of first-to-market products demonstrating that
Young’s continues to be at the forefront of product innovation.
Our investment programme continues at pace, with the
transformational scheme at the Phoenix in Victoria due
to complete later this month. Also in May, we completed
the freehold purchase of the Bedford Arms hotel in
Buckinghamshire, extending the Young’s business into another
new territory.
Having announced my intention to step down as Chief
Executive after six years in the role I am pleased to hand
over the reins to my successor, Simon Dodd, and the rest of
the executive team, at the coming AGM in July. Simon was
recruited three years ago with succession planning in mind,
his excellent leadership skills, vision and operational experience
will be great assets to Young’s. It’s been 20 wonderful years at
Young’s and I am leaving behind a fantastic business in a strong
financial position ready for the next chapter. I am confident
in Young’s proven strategy to deliver profitable returns for
our shareholders.
Patrick Dardis
Chief Executive
18 May 2022
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Strategic Report
The Young’s difference
The Spread Eagle is less a
transformation, and more a
reincarnation of everything we
love about the Great British pub.
To step inside the Spread Eagle is to immerse
oneself in the quintessential sights, ambiance
and outstanding hospitality of a proper
Young’s pub.
houses of her past. A haven for foodies, the
menu includes pub classics which are joyfully
redolent of British dishes served in days
gone by.
Gleaning inspiration from her history,
this classic Victorian pub and hotel stands
proudly in the very heart of Wandsworth
and is reminiscent of the 18th century public
Grade II listed and sensitively restored, the
Spread Eagle houses 21 beautiful boutique
bedrooms and showcases nostalgic,
traditional features.
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Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Our strategy
Delivering growth through
our three strategic priorities
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Investing in our estate
We look to grow through a combination
of investing in our existing pub estate,
opportunity-led acquisitions and our
people. Each year, on average, we
reinvest about two-thirds of the cash
we generate.
Hand-picked acquisitions
We invest in hand-picked acquisitions,
based in locations where we feel our
style of operation will thrive, as well
as benefitting the surrounding area.
All acquisitions have to pass our strict
internal investment criteria.
Investing in our people
We believe in investing in our people
and nurturing our own talent, so
they are able to continue to grow our
businesses by surprising and delighting
our customers.
Our progress in 2022
• Our long-term strategy to maximise
the potential within our tenanted
estate through transfers to our
managed division was epitomised by
the investments at the Grand Junction
Arms, Ship Inn and Spread Eagle.
• Further projects at the King’s Head,
Chequers and Richard the First were
all designed to offer a more premium
trading environment all year round.
Our progress in 2022
• The exciting purchase of six pubs
and hotels from the Lucky Onion
group expanded our presence in the
Cotswolds, whilst adding 73 hotel
rooms to the estate.
Our progress in 2022
• The Ram App was launched, delivered
by our e-learning platform, and is
designed to help internal networking,
communication, training and
health support.
• We acquired a further three premium
pubs, the Bull, Pheasant and the White
Horse, and purchased the freehold
interest in the Lamb.
• Fulfilled our strategy to recruit from
within the business, successfully filling
75% of general manager positions
with internal candidates.
Our priorities for 2023
• Our project at the Phoenix in Victoria
remains onsite and is due to complete
by the end of May.
• We remain committed to identifying
opportunities to maximise the
potential within our existing estate
whilst ensuring that we maintain our
premium standard in all pubs.
Our priorities for 2023
• Actions taken during the pandemic
alongside the sale of the majority of
our tenanted estate, puts us in a strong
position to capitalise on opportunities
that present themselves.
• In April we completed the purchase
of the Bedford Arms, a freehold
hotel in Buckinghamshire, a new
Young’s territory.
Our priorities for 2023
• We will launch our fully interactive
digital career pathway in April 2022
to all teams and team members
regardless of their role.
• Having successfully launched the Ram
Agency in 2022, our aim is to have
over 300 team members registered
with the agency by the end of
the year.
£30.4m
Invested in our estate
£43.3m
Acquisition investment
25
Current apprentices
11 12
11 12
10 12 13
The circled numbers refer to Principal risks and uncertainties on pages 40 to 43.
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Key Performance Indicators
We measure the development, performance and position of our business against a
number of key performance indicators. The reference to an ‘adjusted’ item means
that the item has been adjusted to exclude non-underlying items. These alternative
performance measures have been provided to help investors assess the group’s
underlying performance.
Revenue £m*
This is our group revenue, including both
our managed and tenanted business.
Like-for-like revenue %
This is our revenue movement for this
period compared with the previous
period for our managed pubs and hotels
that traded throughout both periods.
* Current year has been compared to 2020
RevPAR £
This is our revenue per available
hotel bedroom; it is the average
room rate achieved multiplied by
the occupancy percentage.
311.6
309.0
-2.4
-2.9*
59.23
55.50
88.0
2020
2021
2022
2020
-72.1
2021
2022
2020
2021
2022
29.68
Adjusted EBITDA £m*
This is our earnings before interest, taxes,
depreciation and amortisation adjusted
to exclude any exceptional items for the
group. (See notes 11 and 12).
Adjusted profit/(loss) before
tax £m*
This is our profit/(loss) before tax from
continuing operations only, adjusted to
exclude any exceptional items for the
group. (See notes 11 and 12).
Adjusted earnings/(loss)
per share (p)*
This is our adjusted profit/(loss) after tax,
divided by the weighted average number
of ordinary shares in issue. (See notes 12
and 17).
79.6
82.5
37.7
41.8
60.18
56.26
-1.3
2020
2021
2022
-43.2
2021
2022
2020
-66.63
2020
2021
2022
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.
47.5
38.5
24.8
5.4
5.4
7,458
4,351
4,433
2020
2021
2022
2020
-3.4
2021
2022
2020
2021
2022
* Results for 2022 are for continuing operations. 2021 comparatives have been restated but 2020 figures are as reported at that time and have not been restated.
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The Young’s difference
Our menus are as varied as our
venues, serving delicious seasonal
food that is sourced with a focus
on British provenance.
Our food is simple, with a focus placed on the
quality of the ingredients and the execution of
the cooking technique and craft.
Our chefs take great pride in producing
consistent, best in class, British, seasonal pub
food that goes above and beyond in delighting
our guests.
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Our latest acquisitions
Following a quiet period last year on the acquisition front, it has been extremely
positive to add a number of exciting pubs and hotels to our growing managed
estate. In total, we invested £36.8 million with the purchase of six assets from
the Lucky Onion group alongside three other single assets.
Pheasant, Lambourn (below)
Bordering the village of Shefford Woodlands and overlooking Berkshire’s
famed Valley of the Racehorse, this beautiful country inn has a hospitality
pedigree that stretches back 450 years. The 14 bedrooms are perfect
for exploring local sights such as Highclere castle and the North
Wessex Downs.
Bull, Ditchling (below and right)
This historical building dates back to the 16th century and sits proudly in
the heart of this East Sussex village. With panoramic views of the Sussex
Downs and rustic charm by the bucket load, the Bull is the epitome of
a country inn. Featuring six bedrooms, the Bull is ideal for a countryside
escape from the city.
Tavern, Cheltenham (above)
This smart community pub, located in central Cheltenham,
is renowned for its lively atmosphere and live music, making
it the perfect place to meet, eat and drink.
White Horse, Hascombe (above)
An attractive, award-winning 16th century pub located in a small village
nestled amongst the Surrey Hills, an area of outstanding natural beauty.
The terrace and beer garden are havens of tranquility – a perfect spot
to enjoy the sunset with the fantastic views across the fields.
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George Hotel, Cheltenham (below)
This 46 bedroom hotel in central Cheltenham is perfect whether
visiting the Cotswolds on business or planning a romantic getaway.
Its collection of boutique rooms cater for every budget, offering
something for everyone.
Crown, Minchinhampton (below)
Located just off the market square, this local favourite
dates back some 300 years to 1715. The building was
used for public meetings for many years before
becoming a beer house.
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No. 38 The Park, Cheltenham (above)
One of the best places for a weekend break in the Cotswolds,
this beautiful Georgian townhouse is nestled in a leafy corner of
Pittville, and just a stone’s throw from Cheltenham Racecourse.
Wheatsheaf, Northleach (above)
This historic 17th century coaching inn has 14 bedrooms with
a combination of contempory touches alongside classic features.
With roaring fires, beautiful gardens, and a private dining room,
this Cotswolds gem is famous for its simple, rustic food made from
local ingredients that showcase the best of the British countryside.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Section 172(1) statement
Customers
Why?
The company’s biggest source of revenue is from customers
in the group’s managed houses (99.6% of total company
revenue), with drink sales being 61.4% of managed house
revenue, food being 34.5%, provision of accommodation being
4.0% and room hire being 0.1%. Lower revenue could lead
to lower profits. A consumer’s decision to spend their money
can be affected by a broad range of matters, all set against a
background of consumer choice of where to go and what to
do. See also principal risk/uncertainty 3 on page 41.
How?
See the Engagement with suppliers, customers and others in
a business relationship with the company section within the
directors’ report, starting on page 78.
Outcomes and actions
See the Engagement with suppliers, customers and others in
a business relationship with the company section within the
directors’ report, starting on page 78.
Our people
Why?
The commitment, skills and experience of the people employed
throughout the organisation (whether they are in the company’s
pubs and hotels or at Copper House) are integral to the
company’s long-term success; amongst other things, all of
them have a part to play in helping to continue to grow,
and/or support, the company’s business and in demonstrating
the company’s values on a daily basis. They are our most prized
asset and staff retention is therefore crucial. Consequently,
it is important that the company is an ‘employer of choice’,
provides an environment in which people are happy to work,
supports the physical and mental wellbeing of its staff, and
gives individuals the opportunity to develop. See also principal
risk/uncertainty 10 on page 42.
How?
See the Employee engagement section within the directors’
report, starting on page 77.
Outcomes and actions
See the Employee engagement section within the directors’
report, starting on page 77, Our people section of the
sustainability report starting on page 26 and Furloughing
of staff below.
Strategic Report
How we have engaged
with our stakeholders
The following describes how the
directors have had regard to the
matters set out in section 172(1)
(a) to (f) of the Companies Act
2006 when acting in the way they
considered, in good faith, would be
most likely to promote the success
of the company for the benefit of
its members as a whole. In line with
guidance issued by the Financial
Reporting Council, this statement
concentrates on matters that are
of strategic importance to the
company. Where appropriate and
to avoid duplication, the statement
cross-refers to other sections within
the annual report.
Principal stakeholder groups
The directors regard those listed below as the company’s
principal stakeholder groups.
Set out in relation to each group is:
• Why the directors believed it was important to engage
with that group (the Why?)
• The main methods used by the directors to engage with
that group and to understand the issues that concerned
that group (the How?)
• Information on the effect on the company’s decisions
and strategies during the period as a result of issues
raised by that group (the Outcomes and actions)
Customers
Our people
Suppliers
Investors
Lenders
Trustees of
the final salary
pension scheme
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Suppliers
Lenders
Why?
The business relies, in the main, on a small number of suppliers
to provide the company’s pubs and hotels with food and drink.
The range, availability and quality of the products sourced
is fundamental to the company’s reputation. To remain as a
provider of a market-leading, competitive premium offering
that new and existing customers would want to enjoy, it is
important that the company partners with the right suppliers,
and has good, strong and mutually beneficial business
relationships with them. 80% of the company’s spend is with
8% of its suppliers. See also principal risk/uncertainties 4 and 8
on pages 41 and 42.
Why?
Lenders are an additional important source of capital. As it
does with its investors, the company looks to get buy-in from
its lenders to the company’s strategy and business model.
The intention is to develop supportive, long-term relationships.
See also principal risk/uncertainty 7 on page 41.
How?
The chief financial officer regularly spoke with the company’s
banks and noteholders. Further, as required under the terms of
the company’s loan facilities, they received quarterly covenant
compliance certificates.
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Outcomes and actions
The company’s lenders remained supportive of the
company’s strategy and business model. Following the
return to more normalised trading conditions, discussions
between them and the company returned to focusing on
the company’s material activities (including acquisitions and
disposals – particularly of its 56 tenancies) and any appetite
to increase borrowings. Further discussion took place on the
general trading environment due to the covid-19 pandemic.
Particular discussion took place with Natwest on the covid-19
related £20 million RCF facility (which was never drawn), with
this facility not being extended past its first 6 month extension
date and maturing at the of November 2021.
How?
See the Engagement with suppliers, customers and others in
a business relationship with the company section within the
directors’ report, starting on page 78.
Outcomes and actions
See the Engagement with suppliers, customers and others in
a business relationship with the company section within the
directors’ report, starting on page 78 and Re-tendering of
our beer and spirits supply agreements below.
Investors
Why?
Continued access to capital is of vital importance to the
long-term success of the company’s business. Via its
engagement activities, the company strives to obtain investor
buy-in to the company’s strategy of how to grow the business
and the company’s business model setting out how value is
created. The aim is to promote an investor base interested in
a long-term holding in the company. See also principal risk/
uncertainty 7 on page 41.
How?
See the Shareholder relations section within the corporate
governance report, starting on page 65, for information on the
company’s main methods of engagement with investors.
Outcomes and actions
The company’s investors remained supportive of the company’s
strategy and business model.
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Strategic Report
How we have engaged with our stakeholders
Section 172(1) statement continued
Trustees of the final salary pension scheme
Why?
The company operates a defined benefit pension scheme
covering benefits payable to various current and former
employees; the scheme was closed to new entrants in February
2003. The scheme is a key company financial commitment
as it needs to be funded to meet agreed benefit payments
and regulatory pension funding requirements. The scheme’s
trustee is Young’s Pension Trustees Limited, a corporate trustee.
The company recognises that the trustee and the company
each has a vital role to play in the proper running of the
scheme and that regular, clear and open communication and,
where necessary, consultation is important in helping maintain
a good working relationship between the company and the
trustee. The company is party to all scheme deeds, undertaking
responsibilities under the scheme’s trust deed and rules
together with pension legislation and regulation, as required.
See also principal risk/uncertainty 6 on page 41.
How?
During the period, the chief financial officer worked closely
with the trustee. The chief financial officer attended meetings
with the trustee and delivered presentations on the company’s
business, thus keeping the trustee informed of the company’s
financial position and of any plans that would change or
impact upon the employer covenant supporting the scheme.
In addition, the chief financial officer was invited to join scheme
investment discussions. The chairman of the trustee is a director
of the company and gave presentations to the company’s board
on various aspects of the scheme.
Outcomes and actions
Discussions primarily focussed on funding, investment and
employer covenant considerations, ensuring an integrated
approach to risk management. Strategic scheme initiatives,
such as the approach to liability management and minimising
volatility, were discussed; these saw the trustee continuing
with a carefully designed strategy to manage liabilities and
underlying scheme risk, all against the background of the
scheme’s continuing maturity. The company was consulted on
the schemes intended liability-driven investment (‘LDI’) strategy
and approved a revised statement of investment principles
(reflecting the LDI changes and various technical changes,
required by the regulator, to statements of investment principles
from 1 October 2021), which led to an updated statement
being signed, and it was regularly updated on scheme funding,
membership changes and other key details. Other legislative
developments, such as the action to be taken as a result of
the need for GMP equalisation, were progressed. The 2020
triennial actuarial valuation was signed off ahead of the statutory
deadline (to provide greater certainty for the company, trustee
and members on funding and security in the uncertain
times caused by the pandemic). The trustees’ requested a
discretionary increase for the year starting 1 April 2022. Overall,
as a result of the company’s engagement and the proactive
appropriate stewardship of the trustee, stable contributions
continued to be paid to the scheme (as has been the case for
many years) and the company benefited from funding savings
resulting from liability management initiatives.
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Principal decisions
For the purposes of this statement, the directors regard their
principal decisions as not only those that are material to the
group, but also those that are significant to any of the company’s
principal stakeholder groups. Set out below are the principal
decisions made by the directors during the period; implicit in
making these was the desirability to maintain a reputation for
high standards of business conduct and the need to act fairly
as between members of the company.
Consequences of the pandemic
In addition to what is set out in this statement, the strategic
report (on pages 1 to 50) and the Employee engagement
section within the directors’ report, starting on page 77,
provide further detail on various decisions and actions taken
by the company in light of the pandemic.
Approval of capital and revenue budget
for FY2022/23
The capital and revenue budget for FY2022/23 was approved
by the board in March. In doing this, whilst the board were
confident business would return to normal with the removal of
covid-19 restrictions in line with the government’s plans to live
with and manage the virus, they acknowledged that there was
still a degree of uncertainty. With the expectation that business
will return to ‘normal’, the board believed that the company’s
premium offering would remain attractive to existing customers
and act as a draw to new ones, the company’s business model
would allow the company to continue to invest in its people
and pay them appropriately, and that capital would continue
to be available to enable selected hand-picked complementary
acquisitions to be made. The company’s plans, underpinning
the budget, are demanding but will position the company well
against its longer-term value creation vision whilst honouring
its commitments to its stakeholders.
Roger Lambert’s retirement as an independent
non-executive director; Aisling Meany’s
appointment as an independent non-executive
director and the announcement that Patrick Dardis
would be stepping down as chief executive and
that he would be succeeded by Simon Dodd
In July, Roger Lambert retired as a director of the company
and in September, Aisling Meany joined the board as an
independent non-executive director. In March, the company
announced that Patrick Dardis would be stepping down as
chief executive following the company’s 2022 AGM and that
he would be succeeded by Simon Dodd, the company’s chief
operating officer. Patrick will retire from the board at the end of
September 2022. He will remain available to the company for
the remainder of his notice period through to the end of March
2023. Further, inherent in all of these decisions was the balance
between executive and non-executive directors, the importance
of having at least three independent non-executive directors
on the board, and the board having an appropriate number
of members (with the right experience, knowledge, standards,
skills, personal qualities and capabilities) for the company,
its reputation and long-term strategy.
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Acquisitions of new managed houses
During the period the company acquired the following
freehold pubs and hotels as part of the group’s managed house
estate: the Pheasant (Lambourn), White Horse (Hascombe)
and the Bull (Ditchling). The company also acquired six pubs
and hotels from the Lucky Onion group during the period:
five of which were freeholds – the Wheatsheaf (Northleach),
No. 38 The Park (Cheltenham), George Hotel (Cheltenham),
Tavern (Cheltenham), and the Crown (Minchinhampton),
and one leasehold – the Hollow Bottom (Guiting Power).
During the period we also acquired the freehold interest in the
Lamb (Bloomsbury). Details of the consideration paid and the
associated costs are set out in note 15 starting on page 113.
The acquisitions were made to support the company’s value
creation acquisition strategy: right opportunities in existing or
exciting new locations where the board believes the company’s
premium offering will flourish. The purchases were financed
from the company’s cash reserves.
Property disposals of the Lord Wargrave
(Marylebone), the Grove House (Camberwell)
and the Prince William Henry (Blackfriars)
During the period, the company agreed to sell the Lord
Wargrave (Marylebone) and the Grove House (Camberwell)
and agreed an early exit from its lease at the Prince William
Henry (Blackfriars). These were tenancies and the disposals
had no impact on any of the company’s work colleagues.
The challenges facing these pubs meant that their sustainability
was in question; as such, in each case a sale was considered
the appropriate approach and consistent with the company’s
strategy. Together, the pubs were sold for £2.4 million above
their net book value – see note 11 on page 111.
Furloughing of staff
The company chose to access the Coronavirus Job Retention
Scheme during the first half of the year with a view to keeping
as many members of staff employed until restrictions fell away
and the company’s estate fully re-opened.
Re-tendering of our beer and spirits
supply agreements
The company re-tendered its beer and spirits supply agreements
during the period. The new arrangements run from 1 April 2022
until the end of March 2024.
Interim dividend and final dividend
in respect of FY2021/22
Paying dividends remains an important priority for the board:
it helps demonstrate the company’s continuing ability to create
and deliver long-term value for its shareholders. Although the
company suspended dividend payments during the pandemic
due to, amongst other things, the extensive period of closure
of the company’s pubs and the lower levels of trade when they
reopened. The board always intended to resume dividend
payments as soon as it was appropriate. In November, the board
announced that it would pay an interim dividend in December
2021. The payment was in line with an agreement with NatWest
and its noteholders that any dividend payments during the
company’s financial year that started on 30 March 2021 would
not exceed £5 million in aggregate. There is no restriction on
the company recommending a final dividend with its results
for that year, and the company will recommend the payment
of a final dividend to shareholders for the financial year ended
28 March 2022 at the company’s 2022 AGM.
Sale of 56 tenanted pubs
In July 2021, the company announced the sale of most of its
tenanted estate, which would allow the company to further
focus on operating well-invested, premium managed pubs
and hotels. In all, 56 tenanted pubs were sold to Punch Pubs
& Co (“Punch”) for a total cash consideration of £53.0 million.
The proceeds from the sale strengthened the company’s
balance sheet and will ensure that it has sufficient funds
to invest further in its current estate and capitalise on any
attractive acquisition opportunities. As the pubs were tenancies
the disposals had no impact on any of the company’s work
colleagues except for three employees, one of which was
redeployed within the business and two who chose to transfer
their employment to Punch.
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Strategic Report
Sustainability report
“ As a board we want to drive
growth and deliver long-term
value for all our stakeholders.
We have a responsibility to do
the right thing and a long
tradition of implementing
carbon saving initiatives
throughout the business.”
Patrick Dardis
Chief Executive
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This is the company’s first sustainability report and it details
the many things we have achieved so far and the steps
we are taking to embrace a more structured approach to
sustainability going forward. We have appointed our first
sustainability manager and we are equally pleased that Aisling
Meany has agreed to become the board’s first designated
non-executive director for ESG, supported by our company
secretary. The board fully supports our evolving sustainability
strategy and we look forward to updating you on our progress
going forward.
Our net zero approach
The company is a founding member of the Zero Carbon
Forum, a collective of hospitality businesses which has created
a ‘Roadmap for Hospitality to Net Zero’ ahead of the UK
Government’s commitment of 2050. The company has
aligned itself with the industry’s roadmap which requires that,
as a collective, we are committed to achieving net zero for
our ‘Scope 1’ and ‘Scope 2’ emissions (our direct company
emissions) by 2030 and net zero for our ‘Scope 3’ emissions
(our supply chain emissions) by 2040. The roadmap is being
driven by the Zero Carbon Forum and is designed to provide
the hospitality sector with guidance on the steps we can take to
decarbonise our business and implement a net zero strategy.
We have engaged Savills Earth to advise and support us as we
develop our implementation plans and further information is
available in the Our environment section of this report.
Our approach to sustainability
Young’s is a company with a long heritage, and we are
committed to building a business which nurtures and develops
our people, respects the environment, and makes a lasting
and positive contribution to the communities we operate in.
The company has taken steps this year to formalise its approach
so that in the short-term we will develop our decarbonisation
pathway, plan our investments and set measurable targets so
that the company can demonstrate the progress that is being
made. We will continue to work with the Zero Carbon Forum
and its members to share best practice, insights and thought
leadership to drive progress.
We have adopted a clear governance framework in which
the board has oversight of our strategy, and the executive
committee considers and implements operational initiatives and
monitors their progress. The sustainability manager’s role is to
provide leadership and ensure that we are taking a coordinated
approach to sustainability throughout the business. As our
sustainability programme develops, we will be taking steps to
put targets in place, backed up with ongoing monitoring and
reporting systems to track our progress.
We are excited by the opportunities but the challenges we face are complex.
To realise our opportunities and address the challenges, our sustainability
programme focuses on three core areas:
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Our people
• We focus on the wellbeing of our colleagues with
comprehensive financial and mental health support.
• Engage and empower our teams with regular
communication and commitment to their
career pathway.
• We foster diversity and inclusion through our
approach to appointments and training.
Our environment
• Aim to reduce, reuse and recycle our waste
in the most sustainable way possible.
• Implement new emissions saving technologies
across our estate.
• Work closely throughout our supply chain
to improve the environmental impact of our
produce, from farm to fork.
Our communities
• Play a positive role in our communities and
give back where possible.
• Celebrate the best of British and champion
local suppliers throughout our menus.
• We do our utmost to support our suppliers
and be fair commercial partners.
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Strategic Report
The Young’s difference
Our people
Our people are at the heart
of everything we do, we
strive to develop them and
provide well-rounded hospitality
careers. By offering the chance to
build skills and earn qualifications,
we empower our people to reach
their career goals. We champion
diversity and inclusion, and we
have a well-established team
member wellbeing programme.
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Training and development
The company’s ‘career pathway’ is used to engage, inspire, and
develop our teams. Beginning at team member level the career
pathway offers a broad range of development opportunities for
our front of house teams, through to general manager level and
then on to operations manager. We also have a comprehensive
programme for our kitchen teams, and we are proud that our
kitchen assistants have the opportunity to develop into our head
chefs of the future.
Historically, the career pathway has been completed in
paper workbooks within the pubs, but after undergoing a
comprehensive project to streamline our training during
the period, the company will be launching the digital
career pathway in May 2022. It will be available to all teams
throughout the business and it will be fully interactive and
flexible across job roles. It will also mean we are completely
paperless, which is a huge cost saving to the business and
follows our sustainability strategy. The career pathway will be
delivered digitally via the ‘The Ram App’ or a desktop version
which can be accessed through an internet browser.
We expect the benefits of the digital career pathway to increase
engagement, team development and retention. Making the
career pathway digital also means that we have management
information at our fingertips, helping us to identify key talent
for succession planning.
There is also training and development courses available to
general managers and their support teams and the company
also offers apprenticeships at Commis Chef Level 2 and
Hospitality Supervisor Level 3.
Internal succession
We aim to promote internal succession above external
recruitment and support our teams in achieving this objective.
The company’s ‘Y’ factor sessions are run by operations
managers for all our new starters. It is an inspirational day
to finish off their induction into Young’s where we share
our heritage, culture and company values.
Starting with our career pathway, internal succession within
Young’s remains one of our key strengths. Offering our teams
a career, not just a job, means we are able to retain talent
within the business, many of whom go on to run our pubs and
kitchens. In the last year 75% of our general managers were
internal appointments. Many have been promoted from deputy
manager level or are general managers moving to a more
challenging pub. This also extends to our kitchen team where
35% of our head chefs were internal appointments from sous
chef level or head chefs progressing to another pub.
As a result of our career pathway, the company has many
examples of staff who have progressed through our
programmes and are now in leadership roles within the
business and we have included some case studies in this report.
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Realising and developing potential
Emma Dickinson, Head of Customer Marketing
In 2008 Emma joined the company on a part-time basis, working
evenings and weekends at The Ship, in Wandsworth. The general
manager quickly realised Emma’s potential and she was appointed
as the pub’s first sales and marketing coordinator, launching
The Ship’s popular social media channels. In 2011, she was
invited to join the marketing team as a marketing and events
manager, responsible for establishing a team of sales and marketing
coordinators. She then joined the company’s Career Development
Programme in 2015 and since then she has gone from strength
to strength, and in 2019 she was appointed head of sales, and
in 2021 she became head of customer marketing, developing
inspirational campaigns which support the company’s operational
business plan goals.
Supporting employees to
realise their career goals
Anthony Murray, Management Accountant
Anthony started his career with Young’s in 2013 as a team
member at the Fentiman Arms. After making the most of
his opportunities to develop, he moved through the ranks as
supervisor, then assistant manager before being appointed
deputy manager. He then joined the Management Academy, and
consolidated his experience over the next 18 months. In 2017
he was appointed as a general manager. After reflecting on his
strengths, he decided to seek an opportunity within the finance
function of Young’s with the goal of becoming a chartered
accountant. The company sponsored his training for the ACCA
qualification and after two years of study he qualified at the end
of 2021 and moved into a new role as a management accountant
in early 2022.
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75%
Of our general manager
vacancies were filled internally
(2021: 86%)
provides a variety of content to help with mental and physical
health as well as fun activities for employees to do outside of
their working day.
We also work with The Burnt Chef Project, which was setup
in 2019 with the sole intention of eradicating mental health
stigma within the hospitality industry. We offer a range of their
resources via the ‘How are You?’ page on the Ram App, such as
the Going Home Checklist, Wellness Action Plan and The Burnt
Chef Journal Podcast. These resources help raise the profile of
mental health within the company and provide tools to enable
employees to monitor their mental state and help managers
improve their employee conversations.
We offer counselling for those in need of someone to talk to.
This includes fully funded, confidential, one-to-one counselling
sessions with a qualified professional. Our employees also
have access to a 24/7 free confidential telephone counselling
service. By using alternative mechanisms such as FaceTime and
WhatsApp chat, this support was available throughout the year.
Structured training and development
Matteo Perra, Divisional Executive Chef
Matteo started his career at Young’s as a kitchen porter in 2012.
It was not long before the chef team realised his potential and they
trained him to run a section of the kitchen in busy times. In less
than four years, after participating in the company’s structured chef
training programme he was appointed as head chef. Becoming part
of the food team became Matteo’s next goal and after completing
the Hospitality Supervisor Level 3 programme, he was promoted
to divisional executive chef. He now has responsibility for a division,
helping and supporting heads chefs develop their menus.
Strategic Report
Our people continued
5,275
Employees
(2021: 4,185)
Employee involvement
The importance of good communication with our teams is
fundamental to the continued success of the company. We take
great care to ensure that all employees are kept well informed
of developments within the business throughout the year.
The company continued to evolve and enhance its engagement
with employees which included the use of Zoom, social media
and the launch of a monthly digital company magazine.
Social media played a key part in ensuring employees were
up to date with developments through periods of closure.
During these periods, the ‘Keeping in Touch at Young’s’
Facebook page was used to provide updates on general
arrangements, address queries from employees and to publish
video messages from our chief executive. The Facebook group
encouraged engagement and interaction across all levels of the
workforce and across all locations.
Once the pubs and hotels re-opened, employees were
encouraged to use The Ram App, delivered by the company’s
e-learning platform, to access the ‘Discover’ and ‘Keeping in
Touch’ pages, the latter replaced the ‘Keeping in Touch at
Young’s’ Facebook page when it was deactivated. The company
relaunched ‘The Ram Pages’ during the year as a monthly
digital magazine which has proved very popular with our teams.
It features team contributions and updates, new acquisitions,
pub re-developments, recipe inspirations and much,
much more.
We also engage with our employees and their representatives
through the company’s information and consultation committee.
This committee works to enhance communications within the
company, supplying information and giving opportunity for
feedback and consultation. It improves employee awareness
and involvement and supports ongoing improvements within
the business. Please see page 77 of the Directors’ Report
for further details of the workings of the information and
consultation committee.
Employee health and wellbeing
The health and wellbeing of our employees is vitally important
to us. We aim to create safe and healthy working environments
where employees can thrive and continue working with us.
Our well established wellness projects cover physical, mental
and financial wellbeing.
The pandemic has led to an even greater focus on mental
health and wellbeing. We have worked hard to build an in-
house team of mental health first aiders and mental health first
aid champions who support their colleagues across the business.
We launched the ‘How are You?’ page on the Ram App which
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800
Shifts filled by The Ram Agency
(March 2022)
5.3%
Median Gender Pay Gap
(National Average: 15.4%)
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The company continued to partner with Salary Finance to
offer free support and advice to employees to help them live
healthier, happier lives through the current and future financial
decisions they make. Working with Salary Finance, we run a
financial support programme aimed at helping our staff get
out of any financial difficulties they may find themselves in, by
offering affordable loans which give staff access to their salary
as it is earned. During the period, over 250 employees sought
their help and advice, and several employees took advantage
of the loan and debt support they provide.
We continued to provide information about a range of topics,
including the support available to employees from the Licensed
Trade Charity, who provided financial grants of more than
£1,400 to our team members during the period.
Flexible working – The Ram Agency
There is a growing desire for flexible working and achieving
a work-life balance. In order to cater for this, we launched
our own internal recruitment platform in August 2021, which
aims to give registered employees the power to pick their own
working hours. They can view shifts online and build their own
rota to suit their lifestyles. Shifts are available daily across our
estate of 222 managed pubs and prospective staff can apply
online. The platform has given us access to a new pool of
people: students, actors, travellers, parents and many more
who would be unable to commit to permanent employment.
We are proud of the agency’s success. Over 130 employees
are registered, split evenly between our front and back of house
teams, and over 800 shifts were filled by the agency in March
2022. Our aim is to have over 300 employees registered with
the agency by the end of FY23.
Diversity and inclusion
It remains our commitment to ensure that every team
member is treated with fairness, dignity and respect and has
access to the same rewards and opportunities. This supports
and underpins our sustainability commitment to our teams.
Diversity and inclusivity influence our policies and culture at all
levels throughout Young’s; we are fully aware that everything
we achieve as a business we achieve through the dedication
and efforts of our teams.
We are focused on the recruitment and development of the
best talent and we do not discriminate based on gender, race,
ethnic origin, disability, sexual orientation, religion or belief,
marital status or age. We employ the best person for the job,
developing our talent internally to promote from within.
The importance of diversity is acknowledged in making any
appointment as well as employees’ subsequent training,
career development and promotion. The board believes that
all appointments should be merit-based against the selection
criteria created for each role.
Gender pay gap
The company’s mean gender pay gap is 13.4% and median
gender pay gap is 5.3%, which remains substantially better than
the national average median gender pay gap of 15.4% (National
Office of Statistics’ Annual Survey of Hours and Earnings 2021).
As we look to the future, it remains our commitment to ensure
that every team member is treated with fairness, dignity and
respect and has access to the same rewards and opportunities.
This supports and underpins our sustainability commitment to
our teams. The group’s full gender pay gap report is available
on our website.
Gender diversity
The advancement of women in
the workplace remains vital to
Young’s ongoing success and we
want to ensure that women have
access to every opportunity in
order to progress to top roles.
The board has started the
process to recruit a further female
independent non-executive
director, which will increase
female board representation to
30% by the end of FY23.
Board (%)
Leadership team (%)
All employees (%)
22
78
56
44
44.5
55.5
Female
Male
Female
Male
Female
Male
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Strategic Report
The Young’s difference
Our environment
We are delighted that our new head
office ‘Copper House’ in the heart
of Wandsworth has been built to
BREEAM excellence standards.
This demonstrates that the new development has
maximised the potential for improvement in energy
efficiency to its existing building areas and has also
exceeded compliance within the new build elements.
The BREEAM excellent rating is achieved by only the
top 10% of new non-domestic buildings in the UK.
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We are passionate about reducing our emissions and we have a long tradition of
introducing carbon saving initiatives throughout our estate. However, we understand
that we need to adopt a more structured approach, so that we are in a position
to set targets that can be accurately measured and assured. This will enable our
stakeholders to monitor our progress and have confidence in our performance.
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Although we have achieved a lot in recent years, the results are
difficult to measure, and we have taken steps that will enable
us to strengthen our governance framework to support our
sustainability strategy as it evolves.
Net zero carbon pathway
The development of a net zero carbon pathway is a significant
task and we want to do it properly. We have realised that before
we set targets, we need to know more about our properties
so that we can identify the actions that need to be taken, plan
our approach and phase our investments. As a result, we have
engaged Savills Earth to advise and support us on this journey
and we have agreed the following phased approach:
Phase one: to review our baseline carbon assessment and
benchmark carbon emissions for each property to sense
check results.
Phase two: ‘Our Net Zero Carbon Pathway Development’:
this involves grouping our properties into categories based on
building age, condition, servicing and heritage status. From that
we will develop net zero implementation plans for each
category and set out a timeline of interventions. This will enable
us to establish an overall pathway to net zero for our properties.
Phase three: the final phase is the setting up of ongoing
monitoring and reporting. We appreciate that net zero reporting
and frameworks require regular verification and disclosure so
that the company can demonstrate progress against its carbon
reduction targets.
The challenges we face
• The cost – the required investment will need to be phased
and we are conscious that some technology is not yet fit for
commercial use. We will work with suppliers, collaborate
with our peers and monitor the development of the relevant
technologies, run trials where appropriate and adopt in
line with our investment cycle, as the costs reduce, and the
stability of the technology improves.
• Statutory building restrictions – listed building status and
conservation areas represent a significant challenge, bearing
in mind that 40% of our pubs have listed status. We will work
with Savills Earth, our suppliers and statutory authorities to
identify potential solutions to these challenges.
• Availability of energy resources – we continue to work with
energy suppliers to identify infrastructure improvements
which will help us move to sustainable forms of energy, this
includes new on-site electrical substations where the site
layout allows for this addition.
• Remote pub locations – they can provide significant
challenges for carbon reduction. We are working with energy
suppliers to try and upgrade the infrastructure into these
properties where the supply is capable of being moved to
a carbon efficient model.
Our performance so far
Total net emissions (tCO2e)
We have just completed phase one of the project and we
expect phase three to be well progressed by the end of FY23.
16,974
Sustainability frameworks
We will review the various sustainability frameworks as we
work through phase three of the above project so that we can
identify the frameworks that are most relevant to our business.
We will also assess our alignment with the UN Sustainability
Development Goals.
8,430
8,718
2020
2021
2022
Please see page 35 for more details.
This year, as part of our sustainable journey, we now source
100% of our power renewably from our group energy
contract. Green electricity is dual reported in line with SECR
requirements. We have also established FY2019/20 as a
base year.
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Strategic Report
The Young’s difference
The sustainable Young’s pub
4
HOTEL
2
KITCHEN
3
PUB
1
6
BACK OFFICE
5
CELLAR
The illustration above provides an overview of the key features that have been incorporated or are being rolled out to our existing
estate and represent the 2022 edition of the sustainable Young’s pub.
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100%
Electricity from renewable sources
through our group energy contract
(from 1 April 2021)
334,325 litres
Cooking oil recycled for biodiesel
(2021: 112,783 litres)
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Our vision is to have an estate of sustainable pubs and hotels
and we are working to identify a pub within our estate which
will be our flagship ‘sustainable pub’. This pub will be a test bed
for sustainability initiatives and will be used to trial the latest
ideas and develop new initiatives which can then by adopted
throughout our whole estate. We will update you on our
progress each year in this report as our sustainable pub evolves
and the company embraces new ways of working, technology
and the latest thinking.
1 Buildings energy management system (‘BEMS’)
We are partnered with Forest Rock, a UK based software
company which has developed solutions for the internet of
things, to launch a BEMS platform called ‘MyBuildings.Live’.
This platform will give us valuable insight into the performance
of our buildings and assets. By monitoring and controlling those
assets we aim to reduce energy consumption and improve
operational costs. Currently we have 14 BEMS sites online,
with a further 60 planned for FY23.
2 Renewable energy
From 1 April 2021, 100% of our electrical supply began to
flow from renewable sources from our group energy contract,
powered entirely by hydro and wind energy. Our supply
is backed by renewable electricity guarantees of origin and
independently verified by EcoAct, a Carbon Disclosure Project
accredited provider. This has reduced our carbon emissions,
see page 31.
3 Recycling and waste
We have implemented comprehensive recycling arrangements
throughout our estate. 99% of pubs have glass recycling and
94% have a dry mix recycling scheme. For many years we have
been partnering with Olleco, on a successful initiative to recycle
used cooking oil to produce biodiesel. In total 334,325 litres
were collected during FY22.
The food waste collected from our pubs is sent to anaerobic
digestion plants where it is used to produce biogas for
combined heat and power units providing renewable power
and heat. What’s leftover in this process is used as a biofertilizer
by farmers. Our non-recyclable waste is sent to refuse-derived
fuel plants where it is sorted, shredded and turned into fuel
pellets for use as a fossil fuel substitute in kilns, steel furnaces
and cement and lime plants.
4 LED lighting
Since 2018 the company has been committed to installing
LED lamps throughout our existing pub estate and new
developments. Year-on-year we continue to rollout our LED
replacement programme to ensure our estate is fully LED
compliant, mitigating lamp failures and retaining our own high
standards. At the end of the period over 95% of our estate had
LED lighting installed.
5 Cellar management
We continue to invest and upgrade our cellars. The company’s
cellar energy management programme incorporates the
installation of ‘Eco Flo’ to beer dispense units which enables us
to control cellar cooling. The reduced energy consumption is
estimated to save around £160 per year, per cooler and there
are typically two or three coolers per site. At the period end,
41 pubs had Eco Flo installed.
6 Waterless urinals
We will continue to invest in waterless urinals which we
incorporate into all major capital expenditure investments.
There are currently 68 sites with waterless urinals with a further
37 planned for FY23. It is estimated that this programme
already provides water savings of 37,950m³ per annum.
The Young’s difference
Decarbonising our company car fleet
In 2020 we introduced a policy of only allowing replacement orders
for hybrid or electric cars to be placed. At that time over 59% of the
fleet comprised petrol or diesel vehicles. By the end of the period
82% of cars were hybrid or electric. Replacement orders have
been placed for the remaining 18% but due to supply chain issues
delivery can currently take up to 18 months.
2020
2022
82%
41%
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Strategic Report
Our environment continued
What’s next:
The net zero carbon pathway project, it is the overarching
environmental workstream for FY23. This project will enable us
to validate our roadmap, plan and phase our investments and
define measurable short-, medium- and long-term targets that
can be validated.
We will also implement a number of other key initiatives during
FY23, including:
The overnight initiative
Working in partnership with the Zero Carbon Forum, the
company will launch the ‘Save While You Sleep’ campaign
in May 2022. This initiative aims to tackle operational teams’
behaviour and raise awareness of energy savings opportunities
simply by switching off non-essential equipment, such as bar
fridges, overnight. We estimate that this could save over 3% of our
operational carbon emissions, as well as helping us to reduce our
energy costs.
Sustainability champions
Every pub will have a designated sustainability champion who
will promote new initiatives and raise the profile of sustainability
throughout our estate. Our new sustainability manager will use
this network to share ideas and communicate new initiatives.
Electronic vehicle (‘EV’) chargers
We are currently trialling EV chargers in three of our pubs
and a rollout programme is being planned for FY23.
Responsible refurbishments
We will work with our consultants, building contractors and key
suppliers to scope and develop a sustainable refurbishment policy
which will incorporate a minimum level of sustainability into every
refurbishment. This will involve, amongst other things, a review
of material sourcing, construction methods and the equipment
and furnishing supply chain. This policy will evolve over time
and the minimum level of sustainability will rise as more and
more sustainable practices are incorporated into the company’s
investments as we work to achieve our net zero targets.
Patio heaters
All new patio heaters provided to our gardens will be electric and
incorporate timers or controlled sensors. We have implemented a
programme to replace all existing gas heaters with electric heaters,
as far as reasonably practicable, by the end of FY23.
Recycling and waste
We will build on the great work achieved to date and work
to raise the profile of recycling and waste management
throughout the business. We will start a project to identify short
and medium-term targets for recycling and waste that can be
appropriately measured and validated.
Zero Carbon Forum
As one of the founding members of the Zero Carbon Forum
we will continue to actively engage and participate, helping to
shape the hospitality industries approach to sustainability.
Produce
We offer best in class seasonal British food and drink.
Our menus are crafted using the finest ingredients, 90% of
which are sourced in the UK. We are passionate about seasonal
food and we change our menus quarterly so that they include
the latest seasonal ingredients. During the period we began a
food supply chain optimisation project, with our key supplier
‘Menu Partners’, which has led to a number of benefits:
• we have implemented efficiency measures and reduced
our costs.
• the number of deliveries to our pubs has reduced by
over 86%, from circa 5,601 deliveries per week to 783.
We estimate this to be equivalent to more than 400 tonnes
of carbon reduction per year.
• there has been a reduction in the amount of packaging
waste at site level and deliveries are now paperless.
• we will continue to work in partnership with our suppliers in
order to achieve our target of a carbon neutral food supply
chain by 2040.
Our environmental targets
Short-term targets
Medium- and long-term targets
2030
2040
The company has aligned itself with the Zero Carbon Forum’s
roadmap for the industry which requires that, as a collective, we are
committed to achieving net zero for our ‘Scope 1’ and ‘Scope 2’
emissions (our direct company emissions) by 2030 and net zero for
our ‘Scope 3’ emissions (our supply chain emissions) by 2040.
2024
Petrol and diesel cars will be
eliminated from the car fleet
by the end of FY24.
2024
All unnecessary single-use
plastics will be eliminated from
our front of house operations
by the end of FY24.
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Greenhouse gas emissions, energy consumption and energy efficiency action
In this section of this report:
• “DEFRA” means the Department for Environment, Food and Rural Affairs;
• “kWh” means kilowatt hours; and
• “tCO2e” means tonnes of carbon dioxide equivalent.
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Revenue in £ million
No. of managed houses at the year-end
The annual quantity of emissions in tCO2e resulting from activities for which the group
was responsible involving (i) the combustion of gas or (ii) the consumption of fuel for
the purposes of transport
The annual quantity of emissions in tCO2e resulting from the purchase of electricity by
the group for its own use, including for the purposes of transport
The annual quantity of energy consumed in kWh from activities for which the group
was responsible involving (i) the combustion of gas or (ii) the consumption of fuel for
the purposes of transport, together with the annual quantity of energy consumed in
kWh resulting from the purchase of electricity by the group for its own use, including
for the purposes of transport
Total Gross Emissions (tCO2e)
The group’s annual emissions: ratio of tCO2e (gross) per £ million of revenue
Carbon offsets procured via Green Electricity Tariff
Total Net Emissions (tCO2e)
The group’s annual emissions: ratio of tCO2e (net) per £ million of revenue
2022
309.0
219
2021
90.6
120
2020
311.6
207
8,430
6,323
8,247
8,234
2,107
8,727
80,403,035
43,132,027
78,613,804
16,664
53.93:1
(7,946)
8,718
28.21:1
8,430
93.05:1
–
8,430
93.05:1
16,974
54.47:1
–
16,974
54.47:1
We work closely with our key suppliers and monitor their
sustainability practices. This will be an area of increasing focus
going forward as we calculate our Scope 3 emissions and work
with our suppliers and the broader hospitality industry to reduce
their emissions in line with our net zero targets. We are working
with our advisors and our energy consultants to calculate our
Scope 3 emission base line, which we will disclose in the FY23
report and accounts.
We are also members of the Sustainable Restaurant Association
and the company has been awarded a best in class three
star rating.
This year, as part of our sustainable journey, we now source
electricity from renewable sources through our group energy
contract. Green electricity is dual reported in line with SECR
requirements. We have also established FY2019/20 as a base year.
The following methodologies were used to calculate the
above quantities:
• the kWh consumption figures relevant to gas, electricity,
district heating (i.e. a system for distributing heat generated
in a centralised location through a system of insulated pipes
for residential and commercial heating requirements such
as space heating and water heating) and district cooling (i.e.
a system working on broadly similar principles to district
heating but delivering chilled water to buildings needing
cooling) were taken from invoices received by the group1 –
the kWh figures were then converted to tCO2e figures using
the then current conversion factors published by DEFRA;
1 Where data was missing, values were estimated using an extrapolation of available data.
• the consumption figures relevant to propane were taken
from invoices received by the group1 – these were either
in kilograms or litres delivered and were then converted to
kWh and tCO2e using the then current conversion factors
published by DEFRA; and
• the consumption figures relevant to transport were calculated
using expensed mileage figures – to calculate tCO2e for
company cars, the group then used the car manufacturer’s
gCO2/km data and increased this by 38% per guidelines
issued by DEFRA – to calculate tCO2e for mileage completed
in other cars, the conversion was made using figures for an
average car per guidance issued by DEFRA – in each case, the
resulting tCO2e figures were then converted to kWh using the
then current fuel conversion factors published by DEFRA –
where the fuel type used was unknown, it was assumed to be
diesel in line with guidance published by DEFRA.
Our approach to the taskforce for climate-related
financial disclosures (‘TCFD’)
We welcome the introduction of TCFD and recognise the
impetus this will provide for companies and stakeholders
to understand relevant climate-related risks and to ensure
that appropriate management processes are in place to
mitigate them.
During FY23 we will develop our understanding of the
requirements and assess the actions we need to take in order
to ensure that we are prepared for our first disclosure in our
FY24 report and accounts.
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The Young’s difference
Our community
Our pubs are at the heart of their
communities and play a pivotal
role in bringing people together.
We continue to create places
that make a lasting and positive
contribution to the communities
that we operate in.
The stop-start nature of the last two years
has brought into focus the wonderful
role our pubs play within their respective
communities. We take great pride in fulfilling
our role as a key hub, whether it is combatting
loneliness through the Alexandra’s Meetup
Mondays, hosting a knitting group or a local
farmers market.
All this was encapsulated in our short film,
‘A House is Not a Home’, which reaffirms pub
culture as an integral part of British life with the
messaging that pubs, like homes, are so much
more than just bricks and mortar. Pubs unite
people and communities and are where
memories are made.
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Rather than adopting a central or divisional approach during the period, our
head office and pub teams staged a range of events to support both local and
national charities which included: Fish Neighbourhood Care, Only a Pavement
Away, Battersea Dogs and Cats Home, Noah’s Ark Children’s Hospice and
The Royal Marsden Hospital.
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The desire to give back to our communities is an integral part of
our identity. We will continue to encourage our pubs to support
local causes, but we will also consider what central and divisional
approaches we can adopt in partnership with charities that work
closely with the hospitality industry.
We are also using our flexible recruitment platform, The Ram
Agency, to help Ukrainian refugees who are looking for flexible
working arrangements. We have recruited an English speaking
Ukrainian, whose role is to reach out to Ukrainian refugees
and offer them opportunities either within The Ram Agency or
directly with pubs who are recruiting. The company has also
registered its interest through UKHospitality in the Ukrainian
Humanitarian Support Scheme. Many of our pubs have staged
fundraising events and collected food and clothing to be
transported to Ukraine.
Battersea Dogs & Cats Home
The Bear, Oxshott organises an annual dog walk which brings the local
community together. At least 60 people attended this year’s walk which
raised over £1,000 for the charity.
Noah’s Ark Children’s Hospice
A number of our pubs in North London organised charity events,
including a beer barrel roll, a skydive and during the period a charity
row along a section of the River Thames, to support this local children’s
hospice. In all, these activities have raised just under £30,000, which is
the equivalent of the annual salary of a hospice nurse.
Only A Pavement Away
This charity acts as a conduit between forward-thinking hospitality
companies and charities which work with people facing homelessness,
prison leavers and veterans. It helps them find jobs within the hospitality
industry. We were one of 20 hospitality companies who participated in a
charity football tournament which raised over £4,000 for the charities.
Dallaglio Rugby Works
The Alma, Wandsworth hosted a rugby huddle to raise money for this
charity which mentors young people to help them re-assess their lives,
focus on developing key life skills and ultimately be equipped to get into
sustained education, employment and training. The event raised over
£8,000 for the charity.
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Our community continued
90%
86%
Of our ingredients are sourced from the UK
Reduction in number of weekly deliveries
(From 5,601 to 783)
Customers
Looking after our customers is central to everything we
do. Our pubs are highly valued and are integral to the
communities in which they operate. We provide a relaxed
and safe environment where friends and families can spend
time together.
Our focus on responsibly sourced, seasonal and local British
produce lends itself to nutrient dense food that tastes delicious.
As customer tastes and eating habits and styles have evolved,
we have enthusiastically adopted more plant-based options on
our menus, throughout our estate. This is embodied by our
Burger Shack menu which is 50% plant based and includes
the ‘Classic Plant’ burger patty, and vegan ‘CHKN katsu’ fillet.
Every pub must include at least one vegan and one vegetarian
dish on their menus and many offer a number of dishes.
Our newly opened Food Development Learning Centre at
Copper House provides the right environment for our chefs to
experiment and innovate using seasonal ingredients to create
new dishes for evolving customer tastes.
Our suppliers
Despite our proud origins in the London Borough of
Wandsworth, our geographical reach has grown, and with it our
enthusiasm for local food and drink suppliers that celebrate the
best of British wherever our pubs reside. Where appropriate,
we fully encourage our pubs to explore their individuality and
support local businesses, from nearby breweries and distilleries.
We are proud to have always done our best to ensure suppliers
received payments in a timely manner for the wonderful
produce they provide.
The Young’s difference
Partnering with our suppliers
In January we partnered with Pernod Ricard UK, who pledged a
50p charitable donation for every Plymouth Gin and Tonic served
across our pubs in Spring 2022, highlighting the sustainability
credentials of Plymouth and raising £20,000 for the Ocean
Conservation Trust to continue their work protecting our oceans.
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Young & Co.’s Brewery, P.L.C. | Annual Report 2022
We will continue to work with our suppliers to develop joint
initiatives and provide positive social and environmental
messages to share with our customers and wider stakeholders.
These initiatives range from commitments to use electric and/or
hydrogen vehicles in urban operating areas, reducing packaging
waste and implementing paperless deliveries.
The Young’s difference
Why plant?
As the festive period of indulgence ends, January can bring a more
mindful approach to eating and drinking. During “dry January/
Veganuary” our focus shifted to ‘Why plant?’ complemented by
an interesting non-alcoholic range of cocktails, beers and adult soft
drinks. Strengthening the focus through Burger Shack to raise the
profile of the company’s vegan offer, January saw our first ever
collaboration with celebrity chef, BBC’s Dirty Vegan, Matt Pritchard,
to launch the Pritchard Dirty Vegan monthly special burger across
all Burger Shacks.
We continue to support Drinkaware, whose campaign promotes
responsible drinking. All front of house team members are
trained on our responsibilities, which are covered within our
‘Award for Licensed Premises Staff’ training module.
Today more than ever, our customers expect an interesting
soft drink range when visiting our pubs. We have put a lot of
thought and care into our premium soft drink offering and
our range includes a selection of delicious low sugar, non-
alcoholic drinks, to suit all needs. A number of which are must
stock items in our pubs under our ‘soft drink, no and low
stocking policy’.
Allergy notices are included on all our menus inviting customers
to discuss their needs with us, and from early April 2022 calorie
information was also included.
The Young’s difference
Bringing our ingredients to life
We source the freshest and best ingredients
locally to support our community of
producers, reduce the carbon impacts
of our supply chain and deliver the
highest quality for our customers.
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Our wild garlic
Foraged on the Queen’s Sandringham estate, our wild
garlic will be found throughout our menus during the
summer months. Working sustainably, Martin Denny has
been foraging for over 20 years, taking only the leaves or
parts of the plant he needs and leaving nothing uprooted.
There are no pesticides, no chemicals and no added extras.
The whole process from plant to plate is about as natural
as it gets and, with no machinery or packing houses, he is
able to dramatically reduce his carbon footprint.
Our asparagus
This year for the first time ever, we have been able to
partner with an Oxfordshire farmer and establish our very
own three-acre asparagus field – solely for use on Young’s
menus. Asparagus crops are one of the most sustainable
crops grown in the country with most crops left to their
own devices for up to ten years in the same spot, the
spears regrow and regrow, season after season, without
the need of replanting like most other crops.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
39
Strategic Report
Principal risks and uncertainties
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 26 starting on page 123.
Risk/uncertainty
Potential impact
Mitigation
Change
in risk/
uncertainty
An example of this is the spread of a
disease – recent experience has shown the
potential for something like this to have
far-reaching and unexpected consequences
for our business. As the covid-19 pandemic
has spread around the globe in the last two
years, some of these consequences became
apparent and resulted in a very material
and unforeseeable impact on our business.
This will depend on the
nature of the event, its
impact and reach and
the reaction to it by the
Government, consumers,
business and others.
This will depend on the nature of the event,
its impact and reach and the reaction to it
by the Government, consumers, business
and others. Our strong balance sheet and
excellent teams enable our strategy of
operating a diverse, premium, well invested
pub estate and allow us to rise to challenges
thrown our way. The recent covid-19
pandemic has given us the experience to
ensure we are better placed to combat any
future major event resulting in widespread
pub closures
d 1.
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Extreme weather, climate action failure
and human-led environmental damage
continue to top the list of the world’s
highest risks with regulations, government
interventions and enhanced emissions
reporting obligations expected to continue
to increase. The group’s customers,
employees and investors are increasingly
demanding reassurance that we are
managing the climate change risk across
our business activities.
The increased occurrence
of extreme weather events,
regulations, government
interventions, reporting
obligations and our
inability to meet climate
change targets could
reduce revenues and
profits. Failure to address
these risks could impact
trust and reputation
amongst customers,
employees, investors and
other stakeholders.
We are developing a comprehensive
sustainability strategy and the board is
committed to achieving net zero for
operational emissions by 2030 (Scope 1
and 2 emissions). We are working with
external ESG advisors to develop a pathway
to net zero which will enable us to phase
the required in-vestment and identify
short-, medium- and long-term measurable
targets, so that our stakeholder can monitor
progress. For further details see our ESG
report on pages 24 to 39.
Key to change in the risk/uncertainty level from the prior period
Decrease
No change
Increase
40
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Risk/uncertainty
Potential impact
Mitigation
d 3. Our revenue is largely dependent on
A reduction in our revenue
could result in lower profits.
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consumer spending within our managed
estate. A consumer’s decision to spend
their money can be affected by a broad
range of matters including those set out
in 1), confidence in the UK economy,
inflation, the weather and greater
awareness of the potential adverse health
consequences associated with alcohol) set
against a choice of where to go and what
to do.
Change
in risk/
uncertainty
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Our pubs and hotels are mainly spread
throughout London and Southern
England, with the majority inside the M25.
Through them, we provide a 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
(including vegan and vegetarian options)
and market-leading drinks (including non-
alcoholic options), all of which 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.
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.
Increased wages may result in consumers
having greater capacity to absorb increased
prices, but any shortfall will need to be
mitigated through greater labour and other
efficiency gains.
As regards rates, we retain the services of
specialist rating consultants who review each
and every rating assessment. Appeals are
lodged on our behalf where the new
assessments are deemed excessive.
The defined benefit scheme was closed
to new entrants in 2003 and we make
additional contributions over and above
regular service contributions to help address
any funding deficit. We also maintain a close
dialogue with the scheme’s trustee. To limit
further the potential exposure, future
service benefits accruing to remaining active
members were reduced from April 2016,
with member contributions being increased
in tandem.
The vast majority of 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 assist in
managing this exposure.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
41
l 4.
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A reduction in our revenue
and/or an increase in our
costs will have an impact
on our margins and could
result in lower profits.
Various factors, including legislation,
conflict, pandemics and global demand,
may result in the amount we pay for our
key supplies (including food, drink, gas
and electricity) and labour being increased.
An example would be the National Living
Wage, where the hourly rate was increased
by 6.6% to £9.50 (from £8.91) with effect
from 1 April 2022 (for those aged 23 and
over). Increased costs could potentially
make our offer less attractive to consumers
if they are passed on. See also 13.
5.
The pub industry is subject to a variety of
taxes, including business taxes, duty on
alcoholic drinks and business rates.
6. We operate a defined benefit pension
scheme that has to be funded to meet
agreed benefit payments. The value of the
scheme can be impacted by a variety of
factors, including changes in life expectancy
assumptions, lower than anticipated
performances of the stock market and
reduced bond yields. We also operate two
defined contribution pension schemes that
require minimum levels of contribution
from the company set by the Government.
7. Our financial structure involves bank
borrowings and senior secured notes due
2039. The business therefore needs to
generate sufficient cash to repay these
debts with accrued interest. Interest rates
are also subject to change. See also 12.
The introduction of new
taxes and/or increases in
the rates of existing taxes
could result in lower profits.
Variations in the difference
in value between the assets
of the defined benefit
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. An increase in
our contribution levels to
the defined contribution
schemes could result in
lower profits.
Our ability to trade as a
going concern depends
on us generating
sufficient cash to meet
these repayments.
Strategic Report
Principal risks and uncertainties continued
Risk/uncertainty
Potential impact
Mitigation
Change
in risk/
uncertainty
s 8. We rely on a number of key suppliers to
provide our pubs and hotels with food
and drink.
n
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O
Supply disruption could
affect customer satisfaction,
leading to a reduction in
our revenue which could
result in lower profits and
growth rates.
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.
Our offering provides an attractive showcase
for food and drink suppliers – we therefore
anticipate that new suppliers would be ready
and willing to come on board relatively
quickly should there be limited disruption
of our food and drink supply chain.
We regularly review our choice of suppliers.
9. We 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.
Information systems can be at risk of failure
due to technical issues and the growing
threat of cyber attack.
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 conduct business.
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 should any
major incident occur at Copper House or to
our systems. The IT needs of the business
are regularly monitored and we invest in
new technology and services as necessary.
10. We are dependent on having the right
people throughout our organisation: at all
our pubs and hotels and also at Copper
House. See also 13.
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 desired skillsets.
11.
Part of our growth plan is based on
acquiring and/or developing additional
pubs and hotels/rooms.
If acquisitions do not take
place and/or developments
do not occur when
planned, or at all, our
desired future growth
rate could be delayed
or reduced.
We look to recruit and retain the best talent.
The remuneration and reward packages
we offer are competitive and designed to
retain and motivate staff. We have training
and development programmes in place
so that our people have the right skills to
perform their jobs successfully and achieve
their full potential. Having gained “employer
provider” status, which enables us to be
an official training provider for apprentices,
our training programme is now active and
we are developing our own talent pool for
the future.
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 profiles.
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Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Change
in risk/
uncertainty
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Risk/uncertainty
Potential impact
Mitigation
n 12. We are required to meet a range of
ever-increasing compliance, regulatory
and health and safety obligations in the
operation of our business.
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13. The UK’s new trade deal with the European
Union (‘EU’) still leads to a degree of
uncertainty affecting the supply chain and
labour market.
A failure to comply with
these obligations could
damage our reputation,
see us being fined, and, as
regards health and safety,
result in an accident or
incident occurring involving
injury, illness or even loss
of life. All of these could
possibly lead to a reduction
in our revenue and lower
growth rates. Increases in
the cost of compliance
could have an impact on
our margins and result in
lower profits.
The new trade deal could
make it costlier for the UK
to trade with the EU due to
additional border controls
and the potential delays
this will cause. It could also
become more difficult for
UK businesses to hire from
the EU.
We carefully monitor legislative developments,
and our training programmes, policies,
processes and audits are designed to
promote and achieve compliance with
our obligations. Health and safety 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 are a UK business with a predominantly
UK supplier base and fixed price
arrangements in place across many of those
relationships. Whilst we are confident there
will be little or no impact on our supply
chain, the ability to flex our food and drink
offer daily will further mitigate any potential
shortages. We are also an ‘employer
of choice’ with a strong track record of
retaining talent. We also have an active and
progressive internal training programme
that is developing our own talent pool for
the future. See also 4 and 10.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
43
Strategic Report
The Young’s difference
Through the sale of the majority
of our tenanted estate, we have
cemented ourselves purely as a key
player in the premium managed
house pub market.
This year was a defining moment in our strategy to focus on
operating predominantly freehold, individual, differentiated
and premium managed pubs and hotels.
This significant strategic move gave us cash to further
strengthen our balance sheet and extra capacity both to
invest in our existing estate and to capitalise on attractive
acquisition opportunities that present themselves.
44
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Business and financial review
£307.7m
Managed house revenue
£72.1m
Managed adjusted operating profit
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Managed houses
In what has been another extraordinary year, once again we
began the period with the UK economy in a full lockdown due
to the pandemic, and all our pubs closed to the public. It was
good to see all our pubs and beer gardens full again from
mid-July, as restrictions were relaxed, removing limits on social
contact and allowing for larger events. The quintessential pubs’
firm place in the heart of English culture was more important
than ever this year and we were in the perfect position to
capitalise as people looked to make up for lost time. Despite the
setback of Omicron significantly curtailing sales during the
Christmas period, trading was ahead of expectations with total
managed house revenue up by 253.7% to £307.7 million
(2021: £87.0 million).
Initially, our focus was firmly on how we could safely welcome
back as many customers as possible when restrictions eased in
April. There was a real feel-good factor for both our customers
and teams, with the pent-up demand evident as bookings for
our gardens, huts and external spaces flooded in ahead of
re-opening. The sense of excitement and anticipation triggered
several weeks of frantic trade, despite restrictions allowing only
outdoor trading and the irony that on day one we were greeted
with snowfall. This did not hold us back as incredible customer
support meant total revenue was just 13% lower than the
whole estate in 2019 for the first six weeks, despite a quarter
of our estate remaining closed. It was not until 17 May, when
the restrictions on trading inside were finally lifted, that our
remaining pubs reopened.
With the UK holiday market capitalising on domestic travel,
our pubs and hotels in typical ‘staycation’ locations exceeded
expectations, although the wet and dull weather through July
and August somewhat curtailed our progress. The warm and
sunny weather in September was welcome, helping us celebrate
190 years of Young’s – an event marked at every Young’s pub,
from Cambridge to Devon. In London, our famous dray horses
took to the streets for ‘The Great Greenwich Tour’, starting at
the Richard the First and ending at one of our newest pubs on
the banks of the River Thames, Enderby House. As the year
progressed, we started to see more people return to the office,
at least for part of the week, and for our pubs in the City of
London trade was back to 80% of pre-pandemic levels by the
end of September.
As expectations were building for a bumper December with
encouraging numbers of bookings in the diary, the arrival of
covid-19’s fast-spreading Omicron variant saw widespread
cancellations, wasted turkey dinners, and people return to
home-working as they sheltered away to protect their own
family holidays. This continued through to New Year with
celebrations more muted than we would expect to see.
The spread of Omicron also affected our teams as we battled
staffing challenges that rivalled the ‘pingdemic’ from earlier in
the year. What relatively few bookings we had in the Christmas
period had now become harder to operate as managing rotas
across the business became a daily challenge.
Sales in the final quarter bounced back strongly. The mild
weather in January and February was punctuated once or
twice by severe storms that hit the UK, but these early months
of the year marked the start of events season beginning with
Burn’s Night where pubs held unique Scottish themed events.
In February, it was the return of the Six Nations rugby, with
Guinness supporting us with events in almost every pub
alongside a number of selective one-off special events hosted
by England rugby legends such as Will Greenwood and
Danny Care.
In March, having completed the acquisition of the pubs and
hotels from the Lucky Onion group just a couple of weeks
prior, we experienced our first Cheltenham Festival racing week.
The newly acquired No. 38 The Park, the last stop before you
reach the racecourse, ensured racegoers didn’t go thirsty with
a specially erected outside bar serving premium drinks for the
four-day festival.
There is no doubt that food sales were the big winner in the
period, even if you disregard the benefit received from a
reduced rate of VAT when compared to drink sales. In the early
months, table service was a requirement and customers saw the
return to the pub as a chance to treat themselves to the dining
out experience that had been lacking for most of the last year.
Our Young’s app played a pivotal role in the customer journey,
accounting for 40% of food and drinks sales in the early part of
our year. While the app is less important now that normal bar
service has resumed, it still proves a very useful tool, offering
customers the ability to independently browse menus, order
food and drink direct to their table and pay the bill.
The continued investment in our covered and heated gardens
proved vital in winter as well as for the restricted first few
months. Ahead of reopening we had expanded our Burger
Shack offering – focusing on innovation – updating the menu
with the addition of monthly and seasonal special burgers.
These ranged from a ‘Lambslide’ for spring to the ‘Dirty Vegan’
for January in partnership with Matt Pritchard, a notorious
vegan chef. The strong trend for dining out and meeting up
with friends continued throughout the year as food sales ended
the period 20.3% ahead of two-year prior comparative.
It has been quite a year for the Guinea which celebrated a
position of 7th in Estrella Damm’s top 50 Gastro pubs in the
UK, finishing as the highest ranked London pub on the list.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
45
Strategic Report
Business and financial review continued
£24.7m
Managed house investment
£55.50
RevPAR
A local Mayfair institution dating back to 1423, we opened
our restaurant, the Guinea Grill, in 1953. The food has grown
from a long legacy of impeccably sourced British steaks and
other produce such that it now often requires a reservation,
months in advance. Indicating the importance of seizing
opportunities when they present themselves, this year we were
able to increase the trading space, at least in the short-term,
doubling our covers whilst maintaining the all-important true
Guinea experience.
For our drinks sales, the initial restrictions on vertical drinking
limited pub capacities and the need for people to be sat at a
table. Following months of lockdown, customers were keen to
treat themselves, driving further premiumisation across most
categories and we saw significant volume growth compared
to two years prior in our Champagne and sparkling wine, up
by 53.9%, and cocktails up by 85.6%. In the first half of the
period the ‘sit down’ environment encouraged the restaurant
feel which resulted in a drop to the mix of draft sales as people
traded into wines. However, following the return to more
normalised trading in the second half, volumes and mix of
draught sales bounced back with Guinness leading the way,
its volumes were ahead of the comparative period by 11.5%.
In total, drink sales finished the period 3.7% behind the two-
year prior comparative.
Our success has not been without its challenges. There have
been well documented issues in the supply chain, whilst chef
recruitment remains difficult for the whole of the industry.
We have looked to combat this by offering a comprehensive
and unique career pathway for all skill levels in the kitchen to
match the scheme for our front of house teams. Inspirational
chef experiences that offer the opportunity to learn all there
is to know about our local British seasonal ingredients is just
another way that we look to train and retain our people.
In response to the ongoing challenges with recruitment and
agency costs, this year we launched the Ram Agency which
aims to give employees the power to pick their working hours.
This in-house agency brings together people with the skills we
need across the group, in a range of roles, from chefs to front
and back of house team members. Members of the agency can
choose the shifts they want and create their own working rota
to give themselves the flexibility to achieve their goals. With the
aim of filling shifts with people who know the Young’s way of
working, and trained to Young’s standards, this will reduce our
reliance on agency staff going forward.
The performance of hotels was largely dependent on their
geography. Our ‘staycation’ hotels revelled with the regular
influx of domestic visitors as overseas travel remained
challenging, whereas city hotels felt the negative impact of the
46
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
pandemic more acutely as business travel and London tourism
took longer to return. This was reflected in the overall hotel stats
for the year, with total occupancy at 56.9% despite a respectable
average room rate of £97.61, resulting in a RevPAR of £55.50.
It has been a year where we have had to combat varying
trading restrictions alongside the other challenges that we have
faced set against the backdrop of increasing costs. Despite these
factors, and supported by the VAT reduction, our managed
house profitability returned to more normalised levels, with
an adjusted operating profit of £72.1 million (2021: adjusted
operating loss of £18.6 million).
Investment
Our investment impact in the year goes back to last winter’s
lockdown when we were busy actively adding more stretch
tents and huts, ensuring the additional covers in our external
spaces were tradeable all year round. When we came out
of lockdown last spring, we were ready to capitalise on the
pent-up demand as trade bounced back strongly. However,
in the interest of ensuring we returned to profitable trade and
conserving cash, we delayed the majority of our major projects
until January 2022.
During the year, we spent £24.7 million on our existing estate
including exciting schemes at the King’s Head (Winchmore
Hill) and Chequers (Walton-on-the-Hill), both designed to offer
a more premium environment all year round. With beautiful
interiors featuring open fires, wood-paneled dining rooms,
traditional snug areas and bright, elegant garden spaces,
and accompanying stunning gardens these two investments
are going to be firm favourites with their local communities.
Elsewhere we have carried out smaller refurbishments of much-
loved pubs across the estate, including the Castle (Islington),
Orange Tree (Richmond), and the Alma (Wandsworth). We also
remain on site at the Phoenix (Victoria) which will open later this
month following an extensive scheme creating 34 additional
covers on a new mezzanine terrace.
In the last couple of years, we have transferred a number of
pubs from our tenanted division, all with their own unique style
and opportunity to managed houses, and this year was no
different. Firstly, the Grand Junction Arms (Harlesden) opened
in January following a complete refurbishment. This sleeping
giant features canal-side huts and seating for more than
500 people in its three-tiered garden, fully equipped with
outside bar and Burger Shack. Similarly, the Ship Inn (East
Grinstead) is home to a new Burger Shack with 200 covers
across a multitude of outside spaces that include two covered
‘boat cabins’.
S
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“ It has been quite a year for the
Guinea which celebrated a position
of 7th in Estrella Damm’s top 50
Gastro pubs in the UK, finishing
as the highest ranked London pub
on the list.”
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
47
Strategic Report
Business and financial review continued
“ We have found ourselves navigating challenges at nearly every turn,
whether it be storms, floods and tube strikes, or the unwelcome arrival
of the Omicron variant which hampered our Christmas trading. I am
delighted to announce a strong set of results that marks a return to
normalised profitability.”
Meanwhile, investment at the Spread Eagle (Wandsworth)
has been ongoing throughout the year, restoring this previous
tenancy to its former glory with traditional features that include
stylish etched glass, heritage colours and brass fittings whilst
adding a modern twist to this classic Victorian pub with 21
boutique bedrooms. Finally, we have just completed a light
touch update to the Royal Oak (Bethnal Green) after trading
throughout the post-covid period.
On the acquisition front, soon after last period end we
completed the freehold acquisition of the former Greenwich
Union pub next door to our own Richard the First (Greenwich).
We then designed a scheme and obtained the necessary
permissions to bring the two businesses together later
reopening as a bigger, better pub just ahead of the Easter
weekend. In line with our strategic objective to add premium
freehold pubs, we were also able to purchase the freehold of
existing managed house, the Lamb (Bloomsbury), which is
located between Holborn and Russell Square tube stations.
The Young’s difference
The most significant acquisition was made in February
when we purchased six pub and hotel assets from the
Lucky Onion group. The acquisition included three
properties in Cheltenham, and three other Cotswolds
pubs thereby expanding our presence in the area, whilst
also adding 73 hotel rooms to the estate. Five out of the
six properties are freehold. Included in the group are
No. 38 The Park, a boutique 13-bedroom hotel set in
a Georgian townhouse in Cheltenham, the George –
a 46-bedroom hotel also located in the Gloucestershire
town – and the Wheatsheaf, a 17th century coaching inn
in Northleach, which features 14 premium bedrooms.
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Young & Co.’s Brewery, P.L.C. | Annual Report 2022
During the period we have invested a further £36.8 million in
the acquisition of nine new pubs and hotels. In December, we
purchased The Bull (Ditchling) in East Sussex, which dates back
to the 16th century and has six bedrooms. The following month
we acquired the Pheasant Inn, popular with the local racing
community in Lambourn, featuring 14 bedrooms. Then in
March purchased the freehold of the White Horse (Hascombe),
an attractive 16th century village pub sitting in the Surrey Hills
Area of Outstanding Natural Beauty.
Finally, this spring saw the completion of a long-awaited project;
the relocation of our company head office back to the centre
of Wandsworth. Our new base, Copper House, adjoins the
fabulous Spread Eagle hotel and will be instrumental in bringing
our teams back together as we set off on the next phase of
our journey.
The only disposal within the managed house division was the
Waverley (Bognor Regis), where in March, we exited the lease
following the decision not to renew. We finished the period with
219 managed pubs and hotels (2021: 210).
Tenanted business
The disposal of 56 of our tenanted pubs in July, for a total cash
consideration of £53.0 million to Punch Pubs & Co cemented
our move away from operating a tenanted model. In the period,
we also disposed of the Grove House (Camberwell) and Lord
Wargrave (Marylebone), agreed an early exit from our lease at
the Prince William Henry (Blackfriars) and transferred the Grand
Junction Arms to our managed house division, leaving us with
just three tenancies.
Continuing business revenue was £1.0 million (2021: £0.7 million)
and an adjusted operating profit of £0.4 million (2021: £0.0 million).
Due to the small nature of the continuing business, this will be the
final period in which we report on the tenanted division separately.
Other key areas
Property
Our balance sheet strength is underpinned by our
predominantly freehold estate in many highly desirable
locations. 182 of our 222 pubs are freehold or are long
leaseholds with peppercorn rents. Our total estate, including
freehold and fixtures and fittings on leaseholds, is now valued
at £808.0 million (2021: £773.7 million). The carrying value
of property leases, including long leaseholds, is separately
recognised as right-of-use assets in note 20. We have continued
to add value through major developments to improve our
existing pub values and hand-picked acquisitions, primarily
focussing on freehold assets.
2.1 times
Net debt to adjusted EBITDA
£808.0m
Our estate value
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We have returned to delivering strong positive cash flows.
Our operating cash flow was £107.0 million (2021: cash
outflow £23.0 million), with our predominantly freehold estate
and premium business back to unrestricted trading. Young’s
has returned to being conservatively financed. We have
moved away from all financing measures introduced to steer
us through the covid-19 uncertainty which, combined with
the strong positive cash flow, result in a net debt to adjusted
EBITDA of 2.1 times.
Whilst the group’s entire pub estate is trading well, it remains
prudent to recognise a degree of uncertainty ahead due to
any potential ongoing impact of covid-19 and to acknowledge
the impact of the current cost inflation that could influence
future profitability. As part of the directors’ consideration of
the appropriateness of adopting the going concern basis, the
group has modelled several scenarios for the going concern
period. The key judgements applied are the extent of any
potential future disruption to trading as a result of covid-19, and
the inflationary cost pressures that the hospitality industry is
currently facing. The base case model assumes we continue to
trade as now, with no restrictions and a confident market with
trade continuing to build in line with Young’s growth strategy.
The general reduction in trade scenario looks at a decline of
20% in sales and 24% in profit across the period.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
49
Each year we revalue our pub estate to reflect current market
values. Despite our return to profitable trade, the ongoing
implication of covid-19 on our estate had to be considered
on an individual basis as some pubs continue to build back
to pre-pandemic levels. Savills, an independent and leading
commercial property adviser, has revalued all our freehold
properties. The valuation method used several inputs and the
sustainable level of trade of each pub remained key.
In accordance with International Financial Reporting Standards,
individual increases in value have been reflected in the
revaluation reserve on the balance sheet (except to the extent
that they had previously been revalued downwards) and
individual falls in value below depreciated cost have been
accounted for through the income statement. None of these
adjustments have a cash impact.
Continued optimism in the pub property market has remained
throughout the year and has been reflected by increased activity
and property prices; as a result we have seen a net upward
revaluation movement of £29.5 million. This is comprised of
an upward movement of £28.7 million (2021: £9.0 million
upward movement) reflected in the revaluation reserve and
an upward movement of £0.8 million (2021: £1.8 million
upward movement) recognised as an adjusting item in the
income statement.
Treasury and going concern
At 28 March 2022, the group had cash in bank of £34.0 million
and committed borrowing facilities of £235.0 million, of which
£135.0 million was drawn down. The drawn facilities are all fully
interest rate hedged. In addition to these committed facilities,
we have a £10.0 million overdraft with HSBC. Net debt,
including lease liabilities, was £173.8 million.
Strategic Report
Business and financial review continued
Tax
A tax charge of £17.5 million (2021: £6.9 million tax credit)
was recognised for the year. The effective tax rate was 33.7%
(2021: negative 15.2%) compared to the statutory rate of 19.0%
with the difference primarily driven by the re-measurement
of deferred tax liabilities as a result of the increase in the
future substantively enacted tax rates from 19.0% to 25.0%.
Further detail can be found in note 14.
The group’s tax strategy for the accounting period ended
28 March 2022 has been published on the Young’s website in
accordance with UK tax law.
Shareholder returns
Having started life in 1831, Young’s is a long-standing business,
and we are determined to maintain our long-term, sustainable
growth story.
Our top-line trading performance has flowed through to strong
profit conversion and cash generation. Our adjusted earnings
per share was at 56.26 pence, compared to an adjusted loss
per share of 66.63 pence in the prior period. On an unadjusted
basis, the profit per share increased to 58.83 pence. As a result,
we are pleased to recommend a final dividend of 10.26 pence
and, if approved by shareholders, this will give a total dividend
for the year of 18.81 pence (2021: nil).
Patrick Dardis
Chief Executive
18 May 2022
This aims to capture the return of certain restrictions such as
table service only or a recommendation to work from home
and any potential slowdown in consumer spending influenced
by the current cost of living crisis. The cost inflation scenario
includes an average 15% increase in the food cost base for the
period with no retail price increases and holding utility pricing at
the base case rates given the group has forward bought utilities
to March 2024. We have assumed capital expenditure levels
will continue at historical levels and no structural changes to
the business will be needed in any of the scenarios modelled.
Further details are set out in note 1.
Based on these forecasts and sensitivities, coupled with the
current debt levels and the ongoing debt structure in place,
the board has a reasonable expectation that the group is able
to manage its business risks and to continue in operational
existence until at least 27 June 2023. Accordingly, the board
continues to adopt the going concern basis in preparing the
consolidated financial statements.
Retirement benefits
We have a defined benefit pension scheme which has been
closed to new entrants since 2003. During the year our pension
scheme and health care scheme moved from a combined deficit
of £6.1 million into a surplus of £12.2 million. This has been
largely driven by a movement in the discount rate contributing
to a £21.9 million decrease in liabilities. We have continued our
commitment with another year of special contributions, totalling
£1.2 million, and remain fully committed to ensuring the
pension scheme is adequately funded.
Adjusting items
Total adjusting items from continuing operations were in a credit
position of £0.3 million in the period, the majority of which
relate to the estate management of our properties. We agreed
an early termination of the lease at the Prince William Henry
and recognised £2.2 million profit on disposal. During the
period, we also exited one managed house lease – the Waverley
(Bognor Regis), and sold two tenanted pubs, the Grove House
(Camberwell) and the Lord Wargrave (Marylebone) for a net
gain of £0.2 million. As previously mentioned, there was a net
upward movement in property revaluation for the period of
£0.8 million.
Following the transfer of the Grand Junction Arms (Harlesden)
to our managed house division in September, compensation
costs of £0.2 million were agreed to terminate the lease
agreement early.
The most significant cost relates to our acquisition of nine pubs
where purchase costs of £2.7 million were incurred relating to
property taxes and associated professional and legal fees.
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Corporate Governance
“ It has been a challenging
year but the company has
performed strongly and
the board has continued
to ensure that good
governance standards
are adopted throughout
the business.”
52 Chairman’s corporate governance statement
54 Board of directors
57 Leadership team
59 Corporate governance report
66 Audit committee report
72 Remuneration committee report
76 Directors’ report
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Young & Co.’s Brewery, P.L.C. | Annual Report 2022
51
51
Corporate Governance
Chairman’s corporate governance statement
On behalf of the board it gives me great pleasure to introduce
this year’s corporate governance report, which includes the
audit and remuneration committee reports.
As a board, we are the stewards of the company. It is our
responsibility to ensure that our strategy takes into account
the interests of all our stakeholders. It has been a challenging
year but the company has performed strongly and the board
has continued to ensure that good governance standards are
adopted throughout the business.
As chairman, the effective leadership of the board and the
fostering of a good corporate governance culture remains a key
responsibility of mine. I am helped here by my board colleagues
who are equally persuaded of the importance of collectively
defining, delivering and communicating our governance model
so as to ensure that good governance standards are embraced
throughout our business at all times.
The QCA Corporate Governance Code (2018 edition) was
applied throughout the period. It provides the right governance
framework for us: a flexible but rigorous outcome-oriented
environment in which we can continue to develop, as needed,
our governance model to support our business. I am pleased to
report again that the ten broad principles around which the QCA
Code has been constructed are effectively embedded in our
governance model, our ways of working and our behaviours.
There have been a number of board and committee changes
during the year. In July last year, Roger Lambert stepped
down as a non-executive director. In 2020, after serving his
third three-year term, the board asked Roger to stay on for an
additional one-year period, thus extending his period of office
through to the end of July 2021. The board felt that in view of
the challenges facing the company in light of the pandemic,
it was important to retain on the board the additional strength,
balance, financial acumen, and capital markets experience that
Roger provided. We are grateful to Roger for the insight and
guidance he provided during his tenure on the board, including
as senior independent director and a member of the audit and
remuneration committees. We wish him well for the future.
Following Roger’s retirement the board appointed Nick Miller
as senior independent director with effect from 31 July 2021.
Nick is available to the chairman and other board members and
is a point of contact for shareholders and other stakeholders to
discuss matters of concern.
At the beginning of September, Aisling Meany joined the board
as an independent non-executive director. She has considerable
investment banking, capital markets, financial services and
strategy experience. Aisling also serves as a member of the
company’s audit and remuneration committees and is the
board’s designated non-executive director for ESG.
The company announced in March that Patrick Dardis would be
stepping down as chief executive at this year’s AGM on 5 July
2022. On that date, he will be succeeded by Simon Dodd,
chief operating officer, who was recruited three years ago with
succession planning in mind.
“ In all our decision-making,
we aim to do the right thing in
the right way at the right time.
This approach and culture are
underpinned by our corporate
governance model which seeks
to ensure that good governance
standards are welcomed and
adopted throughout our
business at all times.”
Stephen Goodyear
Chairman
For information: an index setting out where to find each of the disclosures required to be
published by the QCA Code appears at the end of the corporate governance information
part of the ‘Companies Act and AIM Rules compliance’ page within the investors section
of www.youngs.co.uk.
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Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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As part of a corporate governance review of the composition
of the company’s audit and remuneration committees, it was
agreed that Torquil Sligo-Young would step down from the
audit and remuneration committees and Stephen Goodyear
would step down from the audit committee, with effect from
16 March 2022. The board felt that it was important that
the composition of both committees be entirely made up of
independent non-executive directors, in line with corporate
governance best practice.
The board understands the importance of diversity and gender
balance and we have started the process to recruit an additional
female independent non-executive director.
For many years, I, and my board colleagues, have been ably
supported by Anthony Schroeder, our company secretary.
After more than 16 years’ service, Anthony Schroeder retired
as company secretary at the end of September. We all miss his
unique sense of humour and the invaluable advice, guidance
and support he provided; we wish him all the best for the
future. In April last year, in preparation for Anthony’s retirement,
we appointed Chris Taylor as Anthony’s successor. Chris was
part of our company secretariat team many years ago, after
which he became the company secretary at Sky plc.
During the year the remuneration committee, with the
assistance of Deloitte LLP, has undertaken a review of the
company’s long-term executive incentives. The outcome of the
review is detailed in the remuneration committee report which
forms part of the corporate governance report.
The board’s strategy and model to grow the business and drive
shareholder value are set out on page 15. It is usually against
that background, and a mission statement of “delighting our
customers with stylish pubs and hotels”, that the board makes
decisions and manages risk.
The board continued to set clear expectations concerning the
group’s culture and values. By way of example, each person
starting at one of our pubs received a training journal designed
to support them through their induction – this not only covered
our vision and values, but also explained how we go about
caring for our customers, right from their decision to come
to our pubs through to a goodbye at the end of their visits.
This is so important if we are to develop our people to delight
our customers. The learnings from this four-week induction
programme then become instinctive over a team member’s
time with us.
Clear statements of behaviour are also issued by the board.
An anti-bribery statement is on our corporate website and
our team members are encouraged to refer contractors and
suppliers to this. We also have an anti-bribery policy. Both the
statement and policy confirm that we have a zero-tolerance
stance on bribery and they repeat the board’s expectation
that everyone behaves at all times honestly, professionally,
fairly and with integrity. The policy is circulated to everyone
at Copper House and to all pub managers; it is also printed
in each pub employee’s contract of employment. Our slavery
and human trafficking statement, likewise published on our
corporate website, also explains to external stakeholders that
we seek to conduct our business honestly and with integrity at
all times and that we recognise that it is not acceptable to put
profit above the welfare and wellbeing of our employees and
those working on our behalf. Steps to combat modern slavery
are taken seriously, and efforts to prevent abuses are fully
embedded across all departments throughout our organisation
to ensure we play our part in helping to stamp out slavery and
human trafficking. A whistleblowing policy is also in place:
this allows our employees to raise any concerns in confidence
directly with the chairman of the audit committee, the company
secretary or the group’s internal audit manager. Experience to
date suggests that this policy is effective and widely known.
We firmly believe that by encouraging the right way of thinking
and behaving, across all our people, our corporate governance
culture is reinforced. This enables us to conduct business
sustainably and responsibly, and, against the background of the
extraordinary times we have found ourselves in, allows us to drive
our premium, customer-focussed, people-led strategy and deliver
value for our shareholders. Within this framework, those managing
our pubs are encouraged to be entrepreneurial, while supported
by policies, processes and an extensive training programme
that assists in protecting the business from unnecessary risk.
We accept that simply setting expectations is insufficient
and it is important for the board to lead by example: it was
therefore regularly seen out and about engaging with our
team members, customers and others. The executive team,
in particular, communicated regularly with the teams in the
pubs and at our new head office, Copper House, through
meetings and messages and at events. Being seen isn’t always
good – however hard it may be, sometimes just fading
into the background whilst observing and listening can be
really educational. Our relatively informal approach here
was supported by more formal processes – we encouraged
customer feedback (both directly to the pubs and via online
booking review platforms) and there were also staff appraisals.
Together, these provided invaluable insight into how we were
seen to behave and lead the board to believe that the group
had a healthy corporate culture throughout the business.
Further details on our corporate governance arrangements
(reflecting the broad principles in the QCA Code and their
application) appear in the following pages and on our corporate
website. Overall, I very much feel that the essence of the QCA
Code is fully reflected and observed in our business, and a
regular review by me with our company secretary will ensure
that this remains the case in the years to come.
To finish, I remain ever aware of the importance of ensuring that
we regularly engage with you, our shareholders. On page 65
we’ve set out what we do in this regard; the AGM is a key part
of this, and I look forward to welcoming you to this year’s AGM
in Wandsworth on Tuesday, 5 July 2022.
Stephen Goodyear
Chairman
18 May 2022
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
53
Corporate Governance
Board of directors
Stephen Goodyear
Non-Executive Chairman
A
Patrick Dardis
Chief Executive
E D
Commenced role
April 2017 (appointed to the board in February 1996)
Commenced role
July 2016 (appointed to the board in July 2003)
Skills and experience
Skills and experience
Stephen has considerable knowledge of, and passion for, Young’s and
the industry. He began his career with Courage Ltd in 1974 and joined
Young’s in 1995. In 2003, he became chief executive and oversaw
the sale of the Ram Brewery, the creation of the tenanted Ram Pub
Company and the transformation of Young’s into a premium managed
house business. The latter involved the acquisition of Geronimo Inns at
the end of 2010 and the creation of a growing hotels operation. In 2016,
Stephen stepped down as chief executive and became a non-executive
director. Stephen is approachable, measured, calm and influential, and
provides invaluable support to the chief executive. As chairman, he is
impartial and objective and encourages open and constructive debate.
Other relevant external appointments
The Independent Family Brewers of Britain (director)
With more than 35 years’ experience working in the pub and brewing
industry, Patrick has extensive knowledge and experience of the sector.
Before joining Young’s in 2002, he held various roles at Wolverhampton
& Dudley Breweries PLC (now Marston’s PLC), Guinness Brewing,
Whitbread PLC and Courage Ltd. Over his time as retail director at
Young’s (2003-16), he developed his leadership skills further and was
instrumental in making Young’s the premium managed house operation
it is today. He understands the Young’s business inside out, is well-
known and very well respected both within Young’s and the industry.
Patrick brings unrivalled passion, drive and commitment to the role.
Other relevant external appointments
Council member of the British Beer and Pub Association
Mike Owen
Chief Financial Officer
Commenced role
September 2019
Skills and experience
E D
Simon Dodd
Chief Operating Officer
Commenced role
September 2019
Skills and experience
E D
Mike has overall stewardship of the group’s finance functions (including
strategy, forecasting, reporting, tax, treasury, and risk management) and,
since 1 October 2020, is responsible for the group’s technological needs.
He has a strong passion for the industry having been group finance and
IT director at Hall & Woodhouse Ltd (2016-19), head of European and
then Global Deployment in the Global Business Services division of SAB
Miller PLC (2014-16) and finance and IT director at Miller Brands (UK&I)
Ltd (2008-14). Due to his influence and involvement in the business, and
his open and engaging personality and management style, the leadership
he provides benefits not just his direct reports and team but a much
wider section of the company’s people. Mike is a qualified accountant.
Simon is responsible for the group’s managed house operations, including
food development and marketing. Having spent more than a decade
working in the pub and brewing sector, he has a wealth of experience.
Before starting at Young’s, Simon was a director at Fuller’s and MD
of their beer company (2016-19) – previously, he was the operations
director of their premium city pubs division (2015-16). Prior to joining
Fuller’s, Simon was at the Orchid Pub Company: COO (2013-14) and
commercial director (2006-13). With his experience, knowledge and
retail and marketing background, Simon makes a positive contribution
to the well-established Young’s business; he combines this with good
analytical and people skills and a cheery manner. Simon will take up the
position of Chief Executive at the AGM in July 2022.
Other relevant external appointments
The company’s UKHospitality representative
54
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Tracy Dodd
People Director
Commenced role
September 2016
Skills and experience
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Nick Miller
Senior Independent Non-Executive Director
A R
Commenced role
April 2017
Skills and experience
Tracy is responsible for people, and health and safety matters.
She joined Young’s in 2015; before that, she was at the Orchid Pub
Company (2006-14). Tracy has a clear understanding of the group’s
premium-led strategy and her focus is on what is required to deliver that,
remaining ever mindful of the regulatory backdrop to people and health
and safety matters, including equality, gender diversity and employee
wellbeing. As an ex-operator, she has the skills, knowledge and expertise
to help ensure the group has the right people and culture in place and
that it operates in a safe and responsible way. Tracy leads by example, is
a team player, communicates well and is very approachable and discreet.
Other relevant external appointments
Hospitality Apprenticeship Board (member)
Nick has a wealth of experience in hospitality, leisure and brewing.
He was the CEO of Meantime Brewing Company (2011-16) and before
that he was the MD of Miller Brands, the UK arm of SAB Miller, the
multinational brewing and beverage company. Nick has an excellent
reputation in the industry. He is a particularly perceptive businessman,
with significant experience and demonstrable career success at both
Meantime and SAB Miller. With this background, he is able and
prepared to challenge the executive directors, and he provides a strong
and valuable external perspective to the board. Through a combination
of his executive experience, strength of character and willingness and
ability to engage, he is well placed to lead the remuneration committee.
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Committee Membership
A Audit committee
D Disclosure committee
E Executive committee
R Remuneration committee
Chair of committee
A R
Ian McHoul
Independent Non-Executive Director
Commenced role
January 2018
Skills and experience
Ian is a chartered accountant and an experienced non-executive
director. Aside from the current appointments listed below, he
has recently been a senior independent director at Britvic Plc
(2014-22) and has been a non-executive director at Premier Foods plc
(2004-13) and John Wood Group plc (2017-18). Ian was the CFO
at Amec Foster Wheeler plc (2008-17); before that, he had a variety
of positions in the brewing and licenced retail industry, including at
Scottish & Newcastle plc and Inntrepreneur Pub Company Ltd
(1985-2008). With his considerable sector experience and strategic
and financial acumen, his contributions both in and outside of board
meetings are insightful. He also brings financial astuteness to his
chairmanship of the audit committee. At a personal level, his ability
to listen, build trust and encourage allows him to mentor others.
Other relevant external appointments
Bellway Plc (director)
The Vitec Group plc (chairman)
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
55
Corporate Governance
Board of directors continued
Torquil Sligo-Young
Non-Executive Director
A R
Aisling Meany
Independent Non-Executive Director
A R
Commenced role
October 2020 (appointed to the board in January 1997)
Skills and experience
Commenced role
September 2021
Skills and experience
Torquil joined Young’s in 1985, becoming an executive director in
1997. During his time as a director, he was responsible for personnel,
health and safety, and the group’s technological needs, and he also
headed up the company’s in-house CSR team. In 2020, Torquil
stepped down as an executive director and became a non-executive
director. He is chairman of a charitable trust set up by William Allen
Young, a founder of the business, and, due to his length of service and
knowledge of Young’s, is chairman of Young’s Pension Trustees Limited,
the trustee company that manages the Young & Co.’s Brewery, P.L.C.
Pension Scheme. Torquil brings a calmness to his position and, being
a member of the founding family, he helps the company keep in touch
with family shareholders.
Other relevant external appointments
William Allen Young Charitable Trust (chairman of the trustees)
Aisling has considerable investment banking, capital markets and
financial services experience. She is currently a Director of Rothschild
& Co. Equity Markets Services Ltd., COO of the Equity Advisory business
and a Director in the Investor Advisory team. During her 11 years
at Rothschild & Co. she has also held the positions of Vice President,
Corporate Development & Strategy and Vice President in the Financial
Institutions M&A team. Aisling is a trustee of Kiftsgate Court Gardens
and Estate, holds a Master’s in Finance from the London Business School
and qualified as a chartered accountant with PricewaterhouseCoopers.
Other relevant external appointments
Rothschild & Co. Capital – director
Kiftsgate Court Gardens and Estate – trustee
Committee Membership
A Audit committee
D Disclosure committee
E Executive committee
R Remuneration committee
Chair of committee
A R
Chris Taylor
Company Secretary
Commenced role
April 2021
Skills and experience
Chris provides counsel to the board on various governance, legal and
regulatory issues affecting the group. He also provides leadership and
advice on sustainability. Chris is an experienced chartered secretary
having held positions at a number of listed companies including Guinness,
Diageo and Orange, and was most recently company secretary of Sky plc.
He was also part of the Young’s company secretarial team earlier in his
career. Chris is a Fellow of the Chartered Governance Institute. He has
an authentic and approachable style and provides valuable advice and
support to the board, executive and wider business.
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Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Leadership team
Kara Alderin
Director of Operations
Kara oversees the operations of the pubs with hotels, stretching
from Wandsworth to the South West of England and the more
recently acquired Cotswolds pubs and hotels. Kara has specific
responsibility for inspiring and delivering individual business
plans across our pub estate, succession and development of
operations managers, sales and profits, capital development
investments, compliance, menu evolution and marketing,
development of Young’s hotels and bedroom growth and
capital expenditure strategy.
Kara studied hospitality management and joined Youngs in July
2020 having previously worked for Abokado and Fullers.
Tom Durham
Director of Retail Finance & Planning
Tom provides financial support to the Chief Financial Officer
and the pub operations team. He manages a team of eight
people leading on areas such as budgeting and forecasting,
financial reporting, business partnering and commercial finance.
Tom is a qualified accountant and joined Young’s in October
2014 having previously worked for Marriott International and
SSP Group plc.
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Stuart Gallyot
Director of Property
Gail Khan
Director of HR
Stuart heads up the property team and has overall responsibility
for delivering the capital expenditure and development plans for
existing pubs, acquisitions of new pubs in premium locations,
maintenance of the buildings and estate management.
Stuart is a Chartered Surveyor and joined Young’s in November
2021. He has thirty years’ experience in the licensed trade having
previously worked for Stonegate, Ei Group, Punch Taverns,
and Scottish & Newcastle Retail.
Gail oversees the HR function, including HR support, policy design,
senior employee relations support, coaching and development.
Gail is an accredited mediator, MBTI and Thomas International
practitioner and feedback facilitator. Gail joined Young’s in May
1995 and currently sits on the board of RBT II Trustees Limited
and is a trustee of the pension and life assurance schemes.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Corporate Governance
Leadership team continued
Chris Knights
Director of Food
Mark Loughborough
Senior Director of Operations
Chris has responsibility for the group’s food operations including
development of food menus, suppliers, delivering health & safety
within the business, overseeing the succession and development
of chefs and kitchen teams and ensuring the appropriate training
& development programmes are put in place.
Chris is a chef by trade and joined Young’s in April 2011 having
previously worked within food service, retail and an array of
restaurants and pubs.
Mark oversees the operations of the Central London and City pubs
as well as food-led pubs in home counties. In his division, Mark
has specific responsibility for the succession and development of
operations managers, oversight of sales and profits, oversight of
capital expenditure development investments and ensuring return
on investments, ensuring pubs are legally compliant, development
of products and food menus, integration of new acquisitions and
identifying potential acquisitions.
Mark has a BSc in Business Economics and joined Young’s as an
Operations Manager in February 2011 having previously worked
in various sectors of the industry.
Gillian McLaren
Director of Marketing
Patricia (Trish) Moody
Director of Operations
Gillian leads the group marketing strategy and is responsible
for driving premium value through individuality, consistency,
brand awareness, growing and strengthening our community
of advocates and broadening reach through digital and sales
conversion. Gillian is also responsible for commercial procurement
of our premium drink offer and maximising commercial value.
Gillian is a Fellow of the Chartered Institute of Marketing and
joined Young’s in August 1998 having previously worked for
Scottish & Newcastle plc, Courage Limited, KLM Royal Dutch
Airlines & TrustHouse Forte.
Trish oversees the pub operations of the North, West, South East
and pockets of South West London regions. The division is famous
for its canal, Thames-side pubs and large beer gardens. In her
division, Trish has specific responsibility for the succession and
development of operations managers, oversight of sales and profits,
oversight of capital expenditure development investments and
ensuring return on investments, that pubs are legally compliant,
development of products and food menus and integration of
new acquisitions.
Trish has an honours degree in Hospitality Management and
joined Young’s as an Operations Manager in January 2009
having previously worked at Scottish & Newcastle plc.
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Corporate governance report
Leadership
Board composition
Details of those on the board, including their skills and experience, appear on pages 54 to 56.
The role of the board and its committees
The board
The board is collectively responsible for the success of the company and the business and management of the group.
Its role includes:
• approving the group’s long-term objectives, commercial strategy and annual budgets;
• overseeing the group’s operations, ensuring competent and prudent management, sound planning, adequate accounting and
other records, and compliance with statutory and regulatory obligations;
• ensuring maintenance of sound management and internal control systems; and
• approving acquisitions and disposals.
The board takes a long-term outlook and sees itself as responsible to a wide range of stakeholders, whilst pursuing its objectives
in a manner consistent with its statutory duties, for the benefit of the company’s members as a whole.
The board governs mainly through its executive management and via committees, the principal ones of which are listed below.
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Executive committee
Audit committee
Remuneration committee
Disclosure committee
It is responsible for the daily
running of the group and
the execution of approved
policies and the business
plan. It usually meets weekly,
with members of staff invited
to attend as appropriate.
Additional meetings are
held as required.
Its primary focus is on
external corporate reporting
and on monitoring the
company’s internal control
and risk management
systems. Further details
on the committee’s
responsibilities and activities
are on pages 66 to 71.
Its primary function is to
determine, on behalf of the
board, the remuneration
packages of the executive
directors. Further details
on the committee and the
company’s reward policy
are on pages 72 to 74.
Its primary function is
to assist the company in
making timely and accurate
disclosure of information
required to be disclosed
in order to meet legal and
regulatory obligations.
Chair
Patrick Dardis
Other members
Mike Owen
Simon Dodd
Tracy Dodd
Chair
Ian McHoul
Chair
Nick Miller
Other members1, 2, 3, 4
Other members1, 2, 3
Nick Miller
Aisling Meany
Ian McHoul
Aisling Meany
Chair
Mike Owen
Other members
Patrick Dardis
Simon Dodd
Tracy Dodd
1 Roger Lambert stepped down from the board and ceased to be a member of this committee in July 2021.
2 Aisling Meany was appointed to the board in September 2021 and was appointed to the audit committee and remuneration committee on 15 September 2021.
3 Torquil Sligo-Young ceased to be a member of this committee in March 2022.
4 Stephen Goodyear ceased to be a member of this committee in March 2022.
The terms of reference for the audit, remuneration and disclosure committees can be found in the investors section of
www.youngs.co.uk. The executive committee has no formal terms of reference.
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Corporate Governance
Corporate governance report continued
The formal flow of information in board meetings was in
addition to information exchanged outside of those meetings,
often in relation to ad hoc matters that needed considering
between meetings. The directors also received, usually on
a weekly basis and while the business remained ‘open’, the
group’s sales numbers and, on a monthly basis, a management
accounts pack that included a summary of the group’s financial
and non-financial performance, sales information for drink and
food for the periods when the business was operating, and the
group’s financial position and cash flow. The non-executives
also met with one or more of the executive directors outside
of board meetings.
Autumn strategy meeting: this in-depth meeting gives
management and the non-executives an opportunity to discuss
a variety of matters. Once the strategy is agreed, management
is able to build the budgets for the following year and develop
longer-term plans. J.P. Morgan Cazenove attended this year’s
strategy meeting and the key matters covered included:
• the group’s long-term business plan and a re-affirming of the
group’s strategy and business model;
• the group’s equity and capital structure;
• the group’s acquisition strategy and the market and
acquisition opportunities that could possibly arise; and
• the challenges facing the business.
Throughout the period, the board had a procedure in place
enabling it to consider and authorise situations where a director
had an interest that conflicted, or could possibly conflict, with
the interests of the company; this is set out in article 63 of the
company’s articles of association.
Board meetings and reserved matters
Meetings
The board meets every two months, with additional
meetings arranged as required. It met seven times during the
period, excluding the strategy meeting held in the autumn.
Most meetings take place at Copper House; occasionally, they
are held at one of the group’s pubs, thus providing the board
with further opportunities to keep up-to-date with the group’s
business and how particular pubs are performing.
Formal meeting agendas, made up of regular and other
specific business matters, and supporting packs were provided
to board members sufficiently in advance of each meeting to
ensure there was time for these to be reviewed. The agendas
were prepared by the company secretary and agreed with
the chairman and the chief executive.
Included in the pack for each of the board’s scheduled
meetings was a report from the chief executive, a summary
of financial performance in the year to date, a latest financial
forecast, a report from the chief operating officer, a health
and safety report, a people report and details of any material
claims against the group. At the meetings, the executive
directors expanded upon what was covered in their reports,
and the company secretary updated the board on matters for
which he was responsible. The chairs of the company’s audit,
remuneration and disclosure committees also reported formally
on the proceedings of their committees and minutes of those
committee meetings were also circulated to members of
the board.
From time to time, members of staff are invited to attend
board meetings to give presentations and/or provide updates
on developments in their areas of responsibility. During the
year the board has received strategy presentations from the
Director of Marketing, Director of Food, Director of Property,
the Operations Directors and regular ESG updates from the
Company Secretary. Open and constructive debate in meetings
was always encouraged by the chairman and he ensured that
matters were challenged and discussed before any decision that
needed to be made was made.
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Matters reserved for the board
The board maintained a formal written schedule of matters reserved for its review and approval; this schedule includes those matters
described on page 59 under The role of the board and its committees, as well as those in the following table:
Category
Strategy and management
Structure and capital
Financial reporting and controls
Contracts
Communication
Board membership and other appointments
Remuneration
Delegation of authority
Corporate governance
Policies and procedures
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Examples
Extension of the group’s activities into new business or geographic
areas; cessation of the operation of all or any material part of the
group’s business.
Changes relating to the group’s capital structure; major changes to the
group’s corporate or management and control structure; changes to the
company’s listing or its status as a plc.
Approval of the following: annual report and accounts, preliminary
announcements of results, significant changes in accounting policies
or practices, treasury policies, certain unbudgeted capital or operating
expenditure; declaration or recommendation of dividends; review and
approval of expenditure authorisation limits.
Contracts in the ordinary course of business material strategically or by
reason of size; contracts not in the ordinary course of business; major
investments.
Approval of resolutions, circulars, prospectuses and press releases
concerning matters decided by the board.
Changes to the structure, size and composition of the board; ensuring
adequate succession planning for the board and senior management;
board appointments; selection of the chairman and the chief executive;
appointment of the senior independent director; membership and chair
of board committees; continuation in office of directors; appointment
or removal of the company secretary; appointment, re-appointment or
removal of the external auditor to be put to shareholders for approval,
following the recommendation of the audit committee.
Approving the remuneration policy for the directors; determining the
initial remuneration of the non-executive directors; introduction of new
share incentive plans or major changes to existing plans.
Division of responsibilities between the chairman and the chief executive;
establishing board committees and approving their terms of reference.
Undertaking any formal and rigorous review of the board’s own
performance, that of its committees and individual directors, and the
division of responsibilities; determining the independence of non-
executive directors; review of the group’s overall corporate governance
arrangements; authorising conflicts of interest where permitted by the
company’s articles of association.
Approval of the following: manual on compliance with the AIM Rules
and aspects of the UK Market Abuse Regulation, company’s insider list
manual, dealing code, anti-bribery policy, whistleblowing policy and
health and safety policy.
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Corporate governance report continued
Directors and company secretary
Roles and responsibilities
There is a clear division of responsibility at the head of the company.
Chairman
Chief executive
Is responsible for:
leading an effective board;
•
fostering a good corporate governance culture;
•
• creating an environment for open, robust and
effective debate; and
• ensuring appropriate strategic focus and direction.
Has overall responsibility for:
• proposing the strategic focus to the board;
implementing the strategy once approved;
•
• managing the group’s business; and
• advancing long-term shareholder value,
supported by the management team.
Senior independent director
Executive directors
Acts as a sounding board for, and provides support and advice
to, the chairman and other board members. Also available to
shareholders and any of the directors should they have a question
or concern that cannot be raised through the normal channels.
All have particular roles and areas of responsibility – see pages
54 and 55. They are responsible for the day-to-day running of
the business.
Non-executive directors
Company secretary
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.
They play their part by being knowledgeable business people
who bring a wide range of skills and experiences to the board.
The company secretary is responsible for the following in
respect of effective board operation:
• ensure good information flows within the board and
its committees between senior management and
non-executive directors;
• facilitate directors’ induction and assisting with ongoing
training and development; and
• to advise the board through the chairman of all corporate
governance developments.
Attendance at board and committee meetings
Meeting attendance
Number of meetings
Stephen Goodyear*
Patrick Dardis
Mike Owen
Simon Dodd
Tracy Dodd
Roger Lambert**
Nick Miller
Ian McHoul
Torquil Sligo-Young***
Aisling Meany****
Board
7
7/7
7/7
7/7
7/7
7/7
2/2
7/7
7/7
7/7
5/5
Audit committee
3
2/2
–
–
–
–
1/1
3/3
3/3
2/2
2/2
Remuneration committee
5
–
–
–
–
–
3/3
5/5
5/5
3/3
2/2
Stephen Goodyear stepped down as a member of the audit committee in March 2022 – he attended all meetings of that committee he was eligible to attend.
Roger Lambert stepped down from the board in July 2021 – he attended all meetings he was eligible to attend.
*
**
*** Torquil Sligo-Young stepped down as a member of both the audit and remuneration committees in March 2022 – he attended all committee meetings he was eligible to attend.
**** Aisling Meany joined both the audit and remuneration committees in September 2021 – she attended all meetings she was eligible to attend.
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Independence
Based on its experience, the board stresses that all the
non-executive directors act independently in character and
judgement. It is accepted though that only Nick Miller,
Ian McHoul and Aisling Meany can be considered independent
when judged against corporate governance best practice.
Having previously been the company’s chief executive,
Stephen Goodyear is not deemed independent. The board
believes that it is important for a company like Young’s to have
continuity and an understanding of the history and traditions
of the company. Stephen will be an invaluable support to our
new chief executive as he transitions from chief operating
officer. Torquil Sligo-Young is not independent for similar
reasons, as he was an executive director of the company.
Torquil plays an important role on the board. Not only does
he retain a long-standing family shareholding, he is also the
company’s link with the Young’s family who retain a significant
stake in the company.
Balance and size
In view of the relevant experience, skills and personal
qualities and capabilities that each director brings to the
board (as summarised on pages 54 to 56) the directors
consider that the board is well-balanced, and no single
person dominates discussions.
The company has appointed the executive search firm, Egon
Zehnder, to assist the company in identifying and recruiting
a further female independent non-executive director. Not only
will this strengthen the independence of the board, but it
will also increase female representation. The graph on page
29 of the sustainability report illustrates the gender diversity
amongst the board.
Nominations, appointments and inductions
Typically, the chairman and the chief executive lead on the
board nomination and appointment process. They consider
the balance of skills, knowledge and experience on the board
and make appropriate recommendations for consideration
by the whole board. Each board member is invited to meet
with the candidate. This 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. During the
period, Egon Zehnder, was appointed to assist the company in
identifying and recruiting a female independent non-executive
director who would complement the existing experience,
skills and personal qualities and capabilities on the board.
After a thorough interview process the board approved the
appointment of Aisling Meany as an independent non-executive
director and she joined the board on 1 September 2021.
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On 16 March 2022, the board announced that Simon Dodd
would succeed Patrick Dardis as chief executive with effect
from 5 July 2022. Simon, the company’s chief operating
officer, had been recruited in 2019 with succession in mind.
Having impressed the board and fully immersed himself within
the business, Simon was the obvious choice to succeed Patrick
as chief executive
The importance of diversity, including gender balance, is
acknowledged in making any appointment – against this
background, the board believes that appointments should
be merit-based against the selection criteria created for any
given role.
Other senior appointments below board level are made by the
chief executive in discussion with the chairman.
Subject to the company’s articles of association, shareholders
can, by passing an ordinary resolution, appoint any willing
person as an additional director or as a replacement for
another director.
New directors undertake a tailored induction programme,
as appropriate, and receive education and training on the AIM
Rules from the company’s nominated adviser. The company
secretary will spend time with any new director, ensuring they
understand the key policies and procedures they need to comply
with, and they also provide the new director with an induction
pack covering or containing a variety of matters, including:
• regulatory matters (e.g. the company’s articles of association,
the AIM Rules, the company’s manual on compliance
with the AIM Rules and aspects of the UK Market Abuse
Regulation, the company’s dealing code, the company’s
insider list manual and a note on directors’ duties);
• internal policies (e.g. anti-bribery; pub purchases, pub
refurbishment projects and schedule of matters reserved
for the board);
• internal information (e.g. diary dates and D&O certificates);
• public information (e.g. latest annual and interim reports
and any circulars issued in the last 12 months); and
• terms of reference for the audit, remuneration and
disclosure committees.
Re-appointment of directors and notice periods
Once appointed, the company’s articles of association ensure
that any new director is subject to re-appointment by the
company’s voting shareholders at the next AGM. This year,
Aisling Meany will be seeking re-appointment at the AGM
Directors are subject to a further re-appointment vote at every
third AGM after that – this applies to Patrick Dardis (even
though he is stepping down from the board in September)
and Stephen Goodyear at this year’s AGM. Both are seeking
re-appointment.
Subject to shareholder re-appointment, the executive directors
have been appointed for indefinite periods. They are generally
entitled to not less than one year’s notice if the company wishes
to terminate their appointment; in return, they must give not
less than one year’s notice if they wish to leave.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Corporate governance report continued
Advice
Subject to certain limitations, all the directors are entitled to obtain
independent professional advice at the company’s expense.
J.P. Morgan Cazenove and Slaughter and May are long-
standing advisers to the board. The former is the company’s
nominated adviser and joint broker; in its capacity as nominated
adviser, it is responsible to the London Stock Exchange for
providing advice and guidance in relation to the company’s
continuing obligations resulting from its admission to AIM.
Slaughter and May is an international law firm headquartered
in London that the board calls on for legal advice and services
from time to time.
Performance evaluation
During the prior period, the board carried out its second formal
review of the effectiveness of its performance as a unit. The first
review was undertaken in 2018. Each individual director’s
performance was also appraised. The overall review process
was led by the chairman, and was conducted by him, the senior
independent director and by the chief executive.
The third performance evaluation will take place during
the second half of the year. The evaluation will involve the
completion of a questionnaire on an anonymous basis by
each director, with anonymity intended to encourage more
open and constructive comment. Details of the outcome and
actions flowing from the review will be disclosed in next year’s
annual report.
As required by its terms of reference, the audit committee
carried out a review of its own performance, as well as its
constitution and terms of reference to ensure it was operating
at maximum effectiveness. Some minor changes were proposed
and put to the board for approval.
Throughout the year, the chief executive informally appraised
the individual performance of each of the other executive
directors as part of his regular 1:1 meetings with them.
Individual development needs were discussed, as well as areas
in which the executives could seek mentoring guidance.
Liability insurance cover for directors and officers
The company maintains, at its own expense, insurance cover
in respect of legal action against its directors and officers.
The non-executive directors have been appointed for fixed
terms which are terminable earlier by them or the company
giving not less than six months’ notice and they are likewise
subject to shareholder re-appointment. The expiry dates of
their current fixed terms are as follows:
Non-executive director
Stephen Goodyear
Nick Miller
Ian McHoul
Torquil Sligo-Young
Aisling Meany
Fixed term expiry date
3 April 2023
3 April 2023
23 January 2024
30 September 2023
31 August 2024
Time commitment
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. The non-executive directors have all confirmed that they
are able to allocate sufficient time to meet the expectations
of their role, and they are required to obtain the chairman’s
agreement (or, in the case of the chairman, the chief executive’s
agreement) before accepting additional commitments that
might affect the time they are able to devote.
Service contracts and letters of appointment
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.
Training and development
From time to time, the directors, as appropriate, attend training
courses, conferences and/or industry forums, read technical and
other journals and undertake online learning to keep up to date
on various matters. They also attend relevant specialist briefings,
some of which form part of board and executive committee
meetings. The directors, executive and non-executive, regularly
spend time out in the trade with fellow directors, shareholders,
members of staff, colleagues and friends: this helps them to
keep up to date with the group’s operations, developments
in the market and the competition.
Once a year, the company secretary provides education and
training to the executive directors on the company’s manual
on compliance with the AIM Rules and aspects of the UK
Market Abuse Regulation, and to all the directors on the
company’s dealing code. The company’s nominated adviser
also provides education and training to all the directors annually
on the AIM Rules.
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Stephen Goodyear, Patrick Dardis and Torquil Sligo-Young
are the key contacts with the company’s family shareholders,
with Torquil having an important role to play in keeping them
abreast of developments within the business. Nick Miller, as
the senior independent director, and the other non-executive
directors are all willing to engage with shareholders should
they have any questions or concerns that are not resolved
through the normal channels. The company secretary can also
be contacted by shareholders on matters of governance and
investor relations.
The board particularly supports the use of the AGM to
communicate with private investors. The AGM is well attended,
and all shareholders are given the opportunity to ask questions
and raise issues; this can be done formally during the meeting
or informally with the directors after it.
At the AGM, the company proposes a separate resolution
on each substantially separate issue. For each resolution,
proxy appointment forms are issued which provide voting
shareholders with the option to vote in advance of the AGM
if they are unable to attend in person. All valid proxy votes
received for the AGM are properly recorded and counted
by Computershare, the company’s registrar. All resolutions
proposed at the meeting will be decided on a poll in accordance
with the current recommended best practice. As soon as
practicable after the conclusion of the AGM, the results of the
meeting are released through a regulatory information service
and a copy of the announcement is posted on the Company
News page within the investors section of www.youngs.co.uk.
This announcement also provides, for information, details of the
total number of voting shares in issue and the number of shares
in respect of which valid proxy appointments were received;
a table is included showing the number of votes for and against
each resolution and also the number within the chairman’s
discretion – excluded from the table are abstentions/votes
withheld and proxy appointments received from holders who
appointed someone other than the chairman of the meeting
as their proxy.
Risk
The board as a whole oversees risk. With the chief executive
having overall responsibility for implementing the group’s
strategy, it is the executive committee, as a group under his
leadership, that is primarily responsible for keeping abreast of
developments that may affect delivery of that strategy (especially
in terms of their likelihood and impact), identifying any
mitigating actions that could be taken and then ensuring, as far
as possible, those actions are taken – here the executive team’s
experience and management, collectively and individually, is
vital. That informal process then feeds through to the whole
board when it considers, on an annual basis, the list of principal
risks and uncertainties for inclusion in the strategic report (see
pages 40 to 43). Additionally, the executive committee regularly
considers the group’s financial controls memorandum – this
comprehensive and internally-focussed document identifies a
number of finance-related risks and, for each of them, sets out
the potential business impact, potential for occurrence, what
mitigating controls are in place and who within the business
has responsibility for managing the control. That document
is considered by the audit committee before being submitted
to the board for approval. Although the board has overall
responsibility for the group’s systems of internal control and risk
management and for reviewing their effectiveness, the audit
committee performs an important role in monitoring those
systems – a summary of what the committee did during the
period in this regard is in the Audit committee section starting
on page 66.
Shareholder relations
Copies of the annual report (which includes the notice of AGM)
and the interim report are made available to all shareholders
and they can be downloaded from the investors section of
www.youngs.co.uk. Other information for shareholders and
interested parties is also provided on the company’s website,
including the preliminary and half-year results presentations
to the City.
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 chief financial
officer 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 board
members receive copies of feedback reports from the City
presentations and meetings, thus keeping them in touch with
shareholder opinion.
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Corporate Governance
Audit committee
“ Having returned to a degree of
normality in the period, a key
focus for the committee was to
continue to ensure the adequacy
and appropriateness of the group’s
systems of internal control and
risk management.”
Ian McHoul
Committee Chair
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Areas of responsibility
The committee’s responsibilities are split into four main areas,
with the following principal tasks:
Financial reporting
• Monitoring the integrity of the company’s financial
statements and results announcements, including
reviewing any key accounting and audit judgements
and assumptions made regarding going concern
• Advising the board on whether, taken as a whole, the
content of the company’s annual report is fair, balanced
and understandable, and whether it provides members
with the information necessary to assess the company’s
financial position, performance, business model
and strategy
• Reviewing the consistency and appropriateness of, and
any changes to, accounting policies and practices
Internal control and risk management
• Monitoring the integrity, adequacy and effectiveness
of the company’s internal control and risk
management systems
• Reviewing the company’s systems, procedures and
controls for detecting fraud and for the prevention
of bribery
• Reviewing the adequacy and security of the company’s
arrangements for its employees and contractors to raise
concerns in confidence about possible wrongdoing in
financial or other matters
External audit
• Overseeing the company’s relationship with Ernst
& Young LLP (‘EY’), the external auditor, reviewing
the effectiveness of the company’s external audit
process, along with EY’s findings, and assessing
EY’s independence
• Recommending to the board the appointment,
re-appointment and removal of the company’s
external auditor
• Approving the terms of engagement of, and
the remuneration to be paid to, the company’s
external auditor
Internal audit
• Reviewing, assessing and approving the company’s
internal audit plan and monitoring and assessing
the effectiveness of the company’s internal audit
function in the context of the company’s overall risk
management system
• Reviewing periodically reports on the results from the
internal audit manager’s work
Committee membership
The committee, chaired by Ian McHoul, comprises the
board’s three independent non-executive directors.
All served on the committee throughout the period apart
from Aisling Meany who joined in September 2021.
The members of the committee consider that they have
the requisite skills and experience to fulfil the committee’s
responsibilities. Roger Lambert was on the committee
until he stepped down from the board in July 2021.
Stephen Goodyear and Torquil Sligo-Young stepped down
from the committee at the March 2022 meeting.
Committee meetings and attendance
The committee met three times during the period (in May,
November and March) and the table on page 62 sets out
each member’s attendance record. The chief executive
(or his successor) and the chief financial officer joined all
the meetings to report on their areas. The company’s
external audit partner and audit senior manager at
EY joined the May and November meetings as these
related to the group’s full-year and half-year results; the
company’s external audit partner also joined the March
meeting to provide an update on corporate reporting and
regulatory matters. Other senior members of staff joined
the meetings, as appropriate. At some of the meetings, the
committee met separately with the group’s internal audit
manager and with representatives from EY, in each case
without any member of the group’s executive management
present; this gave the committee the opportunity to raise
any concerns it had and any issues arising from their work.
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These and the committee’s other duties are set out in the
committee’s terms of reference which can be found in the
investors section of www.youngs.co.uk.
Major tasks
During the period, the major tasks undertaken by the
committee comprised reviews of the following:
the group’s preliminary announcements of interim and final
results, and the results themselves, all prior to review by
the board;
the appropriateness of adopting a going concern basis of
preparation of the financial statements;
the value of the group’s freehold pub estate;
deferred tax arising on the valuation of the group freehold
pub estate;
asset impairment assessments for goodwill, right-of-use
assets and fixtures and fittings;
acquisition accounting and disclosures for the Lucky Onion
pubs and hotels;
EY’s performance as the company’s external auditor and the
effectiveness of the audit process;
the group’s systems of internal control and risk management;
the group’s financial controls memorandum;
the group’s whistleblowing procedures and the group’s
internal procedures and controls for detecting fraud and
preventing bribery;
the company’s internal audit plan and the changes made
to it in light of the ongoing pandemic and closure of the
group’s estate;
the results of various internal audit findings;
the group’s information systems security arrangements,
including an updated systems security management policy;
and
the committee’s own performance and the independence,
financial literacy and other skills and experience of the
committee’s members.
The committee considered the impact of climate change on the
company and potential ESG costs.
The committee also considered, and put forward for approval
by the board, updated terms of reference which contained
some minor amendments.
After ensuring it was aligned to the key risks of the company’s
business, the committee agreed an internal audit plan for
FY2022/23.
The committee continued to oversee EY so as to ensure the
delivery of a robust audit plan.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Corporate Governance
Audit committee continued
Advice, guidance and information
Formal agendas and reports are provided to the committee generally a week before its meetings, along with other information to
enable it to discharge its duties. The following are the most significant items of information, documents and reports provided to the
committee during the period:
Financial reporting and external audit
Internal control and risk management
Internal audit
Reports from the chief financial officer on
various matters, including key accounting
matters and judgements, the company’s going
concern status and loan covenant compliance
Changes to the financial controls
memorandum
Progress reports on FY22 internal audit
plan including results of internal audit
reviews, the effectiveness of controls and
various risks associated with them
Full and half-year review reports, including
findings, prepared by EY
Whistleblowing procedures including
their effectiveness
An actions tracker for any outstanding
matters as a result of findings made
Review of EY independence, draft engagement
and management representation letters
IT systems security update
An internal audit plan for FY23
Financial year-end audit planning report
prepared by EY
Operational support managers’
audit results
An update on the BEIS consultation on the
corporate reform and corporate governance
Schedules of non-audit work performed by EY
2021 financial statements – Financial Reporting Council (“FRC”) thematic review
During the period, the company received a letter from the FRC confirming that it had completed its thematic review of the
company’s disclosures relating to alternative performance measures for the financial year ended 29 March 2021. Due to the inherent
limitations, these reviews are not intended to provide assurance that corporate accounts are correct in all material respects. The FRC
confirmed that there were no questions or queries that it wished to raise with the company at that stage. No further correspondence
has been received.
Significant matters considered in relation to the financial statements
The following table sets out what the committee regards as the significant matters considered by it in relation to the group’s financial
statements and how they were addressed.
Matter
How this is addressed
Going concern assessment The group adopted the going concern basis of reporting in the preparation of the financial statements.
The committee reviewed various scenario-based models underpinning the going concern assumption,
the impact on the group from cost inflation, the growth rate of the business, the resulting impact on
cash flow and the overall capital position of the group. Note 26(b) on page 125 sets out the banking
facilities that the group has available. The group expects, by the end of June 2023 (the ‘going concern’
period), to have available facilities of £235.0 million having replaced the £30.0 million term loan due
to expire in March 2023 with a new facility of equal value. EY reported to the committee on the cash
flow forecast models prepared by management and evaluated whether the assumptions were realistic,
achievable, and consistent with the external and internal environment. As a result of the above, the
committee was satisfied that the going concern basis of reporting was appropriate.
Value of the group’s
pub estate
This number is by far the largest number on the balance sheet at 28 March 2022; note 19 on page
118 explains the valuation exercise undertaken. The committee focussed its attention on understanding
and challenging the annual valuation exercise and the appropriate accounting approach and
disclosures; it did this by reviewing the approach, the key assumptions, the valuation reports, and other
documentation analysing the outcome of the exercise. Management’s valuation process, which was
supported by the company’s valuation experts, was also checked by EY’s property specialist, enabling
EY to report to the committee that the valuation exercise was in accordance with accounting standards
and in line with common practice in the industry. As a result of the above, the committee was satisfied
that a thorough and robust valuation exercise had been undertaken, with appropriate challenges by EY
and the committee, and that appropriate values were reflected in the balance sheet at 28 March 2022.
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Matter
How this is addressed
Deferred taxation
Asset impairment
Management, with help from the group’s in-house tax manager, made certain judgements and
produced detailed calculations supporting the estimated deferred tax movement and year-end balance.
The workings supported the deferred tax liability on the rollover relief and property revaluations on
each pub, as well as the treatment of capital losses, indexation and initial recognition exemptions. EY
audited these calculations and workings. The outcome was that the committee was satisfied that the
deferred tax provision shown in the balance sheet at 28 March 2022 was appropriate.
Management completed full impairment tests on certain categories of assets across the group’s pub
estate which included goodwill, right-of-use assets and fixtures and fittings. Having used both internal
and external factors in the impairment testing, including preparing a financial model and forecast on
the future growth prospects, management’s assessment found there to be no impairment required.
EY then corroborated those qualitative and quantitative factors against industry knowledge, prior year
audit conclusions and EY’s expectations, as well as full-year trading performance and future forecasts.
The committee acknowledged that certain adverse changes to the assumptions in the impairment tests
could result in a future impairment of those assets, but concluded that, at this stage, no impairment
was necessary, and the disclosures reflected those sensitivities – note 18 on page 116 sets out further
information on these sensitivities.
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Acquisition of Lucky
Onion pubs and hotels
During the period the group purchased six pubs and hotels from the Lucky Onion group. The
acquisition was accounted for as a business combination and involved several judgements, particularly
in identifying and determining the fair value of the assets acquired and liabilities assumed. EY reported
to the committee on the assets and liabilities acquired and were satisfied that the identified assets and
values were complete and accurate. The committee ultimately concluded that the disclosures made in
the balance sheet at 28 March 2022 are in accordance with IFRS 3.
EY’s audit report on pages 82 to 89 provides further detail on how some of the above matters were addressed.
Non-audit work carried out by EY
Throughout the period, the company had a formal policy in respect of non-audit work carried out by EY whilst appointed as the
company’s external auditor; this was in place to mitigate any risks threatening, or appearing to threaten, EY’s independence and
objectivity arising through the provision of services in addition to the statutory audit. Non-audit services are generally prohibited
to be performed by EY unless they fall within a narrow list of permitted services closely related to the audit and/or required by law
or regulation; there are then additional safeguards that apply so as to avoid, amongst other things, EY auditing its own work and/
or making management decisions for the company. Where the carrying out of certain work is permitted, the committee must
still nevertheless approve the engagement. During the period, the company engaged EY for a limited amount of non-audit work
comprising the FY2022 interim review, preparation of turnover rent certificates for the Bull (Westfield (Shepherd’s Bush)) and
the Cow (Westfield (Stratford)), and provided a subscription to a library of accounting information and guidance. The total fees
paid to EY during the period for non-audit services amounted to £40k being 10.0% of total fees paid to EY during the period
(2021: £39k and 13.0%). In the committee’s view, the nature and extent of the non-audit work carried out by EY did not impair
their independence or objectivity.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
69
Corporate Governance
Audit committee continued
Qualification, objectivity, independence etc.
and proposed re-appointment of EY
The committee felt that the qualification, expertise, resources
and effectiveness of EY were appropriate in the context of
the group wanting an effective and high-quality service, and
that EY was independent of the group and not reliant on fees
from the group. The committee concluded that EY’s work
had been robust and perceptive, with EY’s reports showing a
good understanding of the company’s business. As part of its
assessment process, the committee:
reviewed the audit plan for the period ended 28 March 2022
as regards the activities to be undertaken by EY and EY’s final
audit results report, and considered how EY had handled the
key accounting and audit matters that had arisen;
had been provided with a copy of the Financial Reporting
Council’s July 2021 audit quality inspection report in
respect of EY and a copy of EY’s published audit quality and
transparency reports for the UK;
reviewed an independence report prepared by EY, which
contained all significant facts and matters bearing upon EY’s
integrity, independence and objectivity that EY was required
to communicate to the company as per the FRC Ethical
Standard and ISA (UK) 260 “Communication of audit matters
with those charged with governance”;
considered EY’s proposed fees for the group’s audit for the
period ended 28 March 2022 and the additional non-audit
services for that same period; and
obtained the views of management.
The fees paid to EY for audit services for the period ended
28 March 2022 were £0.4 million (2021: £0.3 million).
As a result of the above assessment process, the committee
has recommended the re-appointment of EY as the company’s
auditor, and EY has expressed its willingness to continue. A
resolution to re-appoint EY and a resolution to enable the
directors to set EY’s remuneration will therefore be proposed
at the forthcoming AGM.
Audit firm and partner rotation
The external auditor is required to rotate the audit partner
responsible for the engagement every five years. The current
audit partner (Jon Killingley) will rotate off the engagement
following the conclusion of the FY2021/22 audit and his
successor (Katie Dallimore-Fox) will shadow him through
the audit.
In August 2018, the committee decided that the group’s
statutory audit for the financial year ending 2020 should be put
out to tender as EY had been in office, as auditor, for more than
15 years. This was a matter of good corporate governance and
the committee being satisfied with EY’s qualification, objectivity,
independence and overall service. The tender process followed
best practice guidance issued by the Financial Reporting
Council. In mid-December, the committee concluded that it was
appropriate to recommend the re-appointment of EY as the
company’s auditor.
The committee intends to conduct an audit tender in advance
of its March 2028 year-end, which will be within ten years of the
last tender process.
Risk and internal control
The board has overall responsibility for the group’s systems of
internal control and risk management and for reviewing their
effectiveness. These systems cannot eliminate risk and are
therefore designed to minimise and manage it – they provide
reasonable but not absolute assurance and seek to:
• mitigate risks which might cause the failure of
business objectives;
• prevent material misstatement or loss;
• 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 executive directors are responsible for implementing and
maintaining the systems, and the committee assists the board
in fulfilling its oversight responsibilities by monitoring the
systems’ integrity.
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The group’s strategic priorities and their connection to the
principal risks and uncertainties facing the business are listed
on page 40. This is not an exhaustive list of all significant risks
and uncertainties; some may currently be unknown (as was
originally the case with the covid-19 outbreak) and others
currently regarded as immaterial could turn out to be material.
The following is an overview of the main parts of the group’s
systems of internal control and risk management:
• clearly defined reporting lines up to the board;
• clearly set levels of authorisation throughout the business;
• a detailed financial controls memorandum;
•
•
the preparation of a comprehensive annual budget and
the preparation of a vision document which is reviewed
and approved by the executive directors and then further
reviewed and approved by the board;
the circulation of monthly management accounts, including
commentary on significant variances, updated profit and
cash flow expectations for the year and actual capital
expenditure compared to budget and signed-off sums;
• a detailed investment approval process requiring board
authorisation for all pub purchases and major projects (with
regular performance reviews of invested pubs for a certain
period post-investment);
• board approval for disposals;
• regular reporting of material claims and legal and accounting
developments to the board;
• regular circulation of the group’s anti-bribery policy to
head office employees and pub general managers, and
assessment of head office employees’ understanding of
that policy;
•
the group’s internal audit function and the group’s in-house
team of operations support managers; and
• had ongoing health and safety audits and monitoring of
accident statistics, with audit results being a standing item at
board meetings.
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The group’s internal audit manager sits within the finance team,
with a clear line of communication to both the chair of the
committee and the company secretary, remaining independent
of the areas under review. He performs internal reviews of
financial, compliance and operational areas according to a
programme set by the committee, following input from the
chief financial officer. Audit findings, management responses
and progress on recommended actions are presented to
the committee. Management may supplement the internal
resource for these reviews with specialist external resources;
however, none were perceived as being required during the
period. The internal audit manager also reviewed the design
and operation of the group’s key controls, as documented in
the group’s financial controls memorandum. The results of
this work were shared with the executive directors concerned
and with the committee; with that committee’s approval, the
memorandum was updated.
Throughout the period, a team of operations support
managers (led by the internal audit manager) undertook a
programme of retail audits across the managed house estate.
Through these audits, they independently reviewed compliance
with business policies, and they provided best practice support
to pub management, principally in the areas of stock and
cash management. The team holds relevant knowledge and
experience to perform this role, drawn from their time as
members of the finance department after employment in one
or more of the group’s pubs. Summary retail audit results for
the group’s operating divisions are presented regularly to senior
management, including the executive directors.
Regular updates on the progress of a number of projects to
enhance the security of the group’s IT infrastructure were
presented to the audit committee throughout the year.
The group has business continuity arrangements in place with
third parties. It also has business continuity plans for each of the
departments within Copper House.
The group has a whistleblowing policy that is overseen by
the committee. This policy allows staff to raise any concerns
in confidence directly with the chair of the committee, the
company secretary or the group’s internal audit manager.
The audit committee believes, based on experience to date,
that this policy is well communicated in the organisation and
working well. The policy was reviewed during the year and any
whistleblowing reports are communicated to the committee.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Corporate Governance
Remuneration committee report
“ The company’s reward policy
as regards the executive
directors focusses on the
long-term, in line with the
board’s strategy and business
model for long-term sustainable
shareholder value creation.”
Nick Miller
Committee Chair
Primary function
The committee’s primary function is to determine the
remuneration packages of the executive directors. This is in
the context of the company’s reward policy which is designed
to incentivise the executive directors appropriately and support
the delivery of the group’s strategic objectives which are
aligned with the long-term interest of both shareholders
and key stakeholders.
Terms of reference
The committee’s duties are set out in its terms of
reference which can be found in the investors section of
www.youngs.co.uk.
Committee membership, meetings
and attendance
The committee is made up of three independent non-executive
directors. It is chaired by Nick Miller; the other members are
Ian McHoul and Aisling Meany. Nick and Ian served on the
committee throughout the period; Aisling joined the committee
in September. Torquil Sligo-Young served on the committee
until 16 March when he stepped down following a review of the
composition of the committee. The committee met five times
during the period and the table on page 62 sets out
each member’s attendance record.
Advice, guidance and information
During the period, Deloitte LLP were engaged to help the
committee in its review of the company’s long-term incentive
arrangements for the executive directors. For further details,
see the Review of executive director long-term incentives section
below. More generally, advice and guidance is provided to the
committee by the company secretary. Where possible, agendas
and supporting papers are provided to the committee a week
before its meetings – the following were amongst the papers
provided to the committee during the period:
• an independent report and supplementary papers prepared
by Deloitte LLP in relation to its review of executive director
long-term incentives;
• aspects of the Investor Associations’ principles of
remuneration for 2022 and its guidance on shareholder
expectations during the pandemic; and
• a pack of financial information to help the committee
determine the extent to which the financial performance
conditions for the executive directors’ performance-related
bonuses for FY2021/22 had been met.
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Remuneration: executive directors
Against the background of the company’s reward policy,
the committee decided a number of years ago that total
remuneration levels for the executive directors should be in line
with the market for the performance achieved, with an element
of the total remuneration varying according to achievement of
key performance targets. The main elements of the executives’
reward packages therefore ordinarily comprise:
• a basic salary;
• a range of benefits, including life assurance, regular medical
check-ups, a car scheme or a car allowance (at levels set in
2008), private medical insurance and a pension (see note 9
on page 109); and
•
to satisfy the ‘variable’ element, a stretching deferred annual
bonus scheme.
Following a difficult year in FY2020/21, when the business
was significantly impacted by the pandemic and no bonus
scheme was offered to the executive directors, the committee
reintroduced the bonus scheme for FY2021/22. Furthermore,
to incentivise the executive directors to ensure that the business
was fully prepared to resume trading, as the government’s
roadmap for easing restrictions was implemented at the
beginning of FY2021/22, the committee agreed to consider
the payment of a discretionary ex-gratia bonus if, amongst
other things, certain financial criteria was met at the half-year.
The criteria included whether: (i) the business was generating
a positive cash flow, (ii) the business had available liquidity of
not less than £50 million, (iii) a minimum level of profit before
tax has been achieved in H1 and (iv) an interim dividend for
FY2021/22 has been paid to shareholders.
The committee determined that the performance of the
executive directors during the previous eighteen months,
the strong performance of the business during the first half
of FY2021/22 and the achievement of the criteria outlined
above, warranted the payment of a discretionary ex-gratia
bonus for FY2021/22. The committee approved the payment
of 25% of basic salary in December and this is reflected in the
‘Bonus 2022’ column in note 9(b) appearing on page 109.
As previously reported, the executive directors’ basic annual
salaries were reduced by 20% for April, May and June 2020 in
light of the pandemic and this is reflected in the remuneration
table appearing in note 9(b) on page 109. For FY2021/22, the
committee decided to wait until trading had resumed before
considering whether a pay increase would be awarded. In July,
the committee reviewed its position and a pay rise of 2%
of basic salary, being effective from the start of FY2021/22,
was awarded in light of the group’s encouraging trading
performance during the first quarter.
Following the re-introduction of the deferred annual bonus
scheme in FY2021/22, the following table set’s out the key
performance conditions to which the bonus awards are
dependent, expressed as a percentage of salary along with the
overall caps applicable. The inclusion of personal objectives
recognises the specific executive roles and responsibilities each
director has.
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Patrick Dardis
Mike Owen
Simon Dodd
Tracy Dodd
Adjusted profit
before tax
100%
100%
80%
50%
Personal
objectives
25%
25%
20%
50%
Cap
125%
125%
100%
100%
The annual bonus drives the achievement of financial
performance and personal objectives. The committee, in
applying it’s judgement, assessed the performance of the
business and each executive director, as well as certain other
factors including, amongst other things, the company’s available
liquidity, the payment and recommendation of dividends to
shareholders, the overall performance of the business and
outside certain limited exceptions, the reduction in coronavirus-
related government support. In view of the strong financial
performance of the company during the period and the
significant contribution of the executive directors to its success,
the committee exercised its discretion to award an annual bonus
of 100% of maximum, equivalent to 125% of basic salary for
Patrick Dardis and Mike Owen and 100% of basic salary for
Simon Dodd and Tracy Dodd. This is reflected in the ‘Bonus
2022’ column in note 9(b) appearing on page 109.
The committee decided that in view of the introduction of
a new executive long-term incentive scheme, see Review of
executive director long-term incentives below, the operation
of the deferred annual bonus scheme would change this year.
Mike Owen, Simon Dodd and Tracy Dodd will be required to
defer 25% of their annual bonus into shares, which would be
subject to a holding period of three years. Patrick Dardis, who
is retiring as an executive director on 30 September 2022, will
receive his annual bonus in cash. No matching shares will be
awarded under the scheme.
Going forward the executive directors will be required to defer
an element of their annual bonus into shares and the committee
is considering the introduction of a minimum share holding
requirement for each executive director. Further details will be
included in the company’s FY2022/23 report and accounts.
The 2019 awards under the deferred annual bonus scheme are
due to vest in June 2022. As is explained in note 32(a) starting
on page 137, the ‘matching’ share part of the bonus scheme
is linked to the growth of the group’s adjusted earnings per
share over a four-year period. For the ‘matching’ share awards
dated June 2019 (only relevant to Patrick Dardis, Tracy Dodd
and Torquil Sligo-Young (awarded when he was an executive
director)), the committee determined, due to the impact of
the pandemic, that the group’s adjusted earnings per share
condition applicable to the ‘Matching Shares’ received under
the 2019 awards was not met. However, having regard to
the company’s strong performance during the period ended
28 March 2022, as the business recovered from the effects
of the pandemic, and the strong performance of the business
prior to the pandemic, the remuneration committee considered
it appropriate to adjust this outcome such that participating
individuals will retain 50% of the Matching Shares in question.
The transfers back to the Ram Brewery Trust II of the balance
of the Matching Shares will be shown in the company’s
FY2022/23 report and accounts.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Corporate Governance
Remuneration committee report continued
Review of executive director long-term
incentives
Under the company’s current long-term incentive
arrangements, the annual bonus and long-term incentive award
are linked. If an executive director does not receive an annual
bonus, there is no bonus deferral and no award of Matching
Shares under the terms of the deferred annual bonus scheme.
In light of the challenges the company has faced during the
pandemic, and the exceptional performance of the directors
during the current period, the board wants to ensure that
the executive directors are appropriately incentivised, as they
currently have limited or, in some cases, no long-term incentive
awards in place.
The committee engaged Deloitte LLP to undertake an
independent review of executive director long-term incentives
which focused on: market practice, alternative long-term
incentive approaches and the structure of the company’s
current incentive scheme. Following careful consideration of
the alternative approaches and market practice, the committee
approved the introduction of a long-term incentive plan (‘LTIP’).
The benefit of this approach is that it simplifies the company’s
incentive structure, de-links the long-term incentive from
the annual bonus, and going forward executive directors will
be incentivised to meet both short- and long-term targets.
This approach also aligns ‘the company with the market and
its peer group.
The rules of the scheme will follow market practice and include:
an individual grant limit of 100% of salary, malus and clawback
provisions and the issue of shares under the plan will not exceed
5% of the company’s issued share capital in any ten year rolling
period. It is expected that the grant of the first award under
the LTIP will take place within 42 days of the announcement
of the company’s annual results in 2022. The performance
conditions attaching to the 2022 awards are still being finalised
but are expected to be adjusted earnings per share and relative
total shareholder return. Further details will be included in the
company’s FY2022/23 report and accounts.
Remuneration: non-executive directors
The initial remuneration of the non-executive directors is
determined by the board, but any fee increase is decided 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 the business; accordingly, all non-executive directors receive
a basic fee.
Apart from any entitlement arising from a previous executive
role in the company, the non-executives do not participate in
bonus schemes or share options and they are not members
of any group pension scheme other than for the purposes of
complying with pension auto-enrolment legislation. As a result
of having been executive directors, Stephen Goodyear and
Torquil Sligo-Young are pensioner members of the group’s
defined benefit pension scheme. At the end of the period
Torquil was no longer entitled to a company car; details of his
holding of shares under the terms of the deferred annual bonus
scheme is in note 32 starting on page 137, and his interest in
the company’s SAYE share option scheme is shown in note 9(e)
on page 110. The non-executive directors are entitled to be
reimbursed for certain business-related expenses.
The chairman and the non-executive directors received a 2%
basic fee increase for FY2021/22. An annual committee chair
fee of £5,000 was also introduced to recognise the additional
work undertaken by the respective chairs of both the audit
committee and remuneration committee. The fees increases
were effective from 1 April 2021.
During the year, the executive directors’ engaged Deloitte
LLP to independently benchmark the chairman’s basic fee.
The primary reference point of the review was the AIM market.
Additional reference points included sector peers and the FTSE
All-Share market capitalisation group. The executive directors
concluded from the analysis that the chairman’s current basic
fee would be increased to bring it in line with the average for
the upper quartile of the AIM market. As a result, the chairman
basic fee increased from £97,390 to £125,000 with effect from
1 April 2022.
The executive directors also benchmarked the non-executive
directors’ basic fee and using market benchmarking data they
concluded that the company’s non-executive directors’ basic
fee was below the median for the AIM market. The executive
directors determined that the basic fee would be increased from
£42,943 to £46,000 with effect from 1 April 2022.
The corporate governance report (comprising pages 51 to 74)
was approved by the board and signed on its behalf by the
company secretary.
By order of the board
Chris Taylor
Company Secretary
18 May 2022
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“I would like to thank the teams
across the business who have worked
so hard to deliver these great results
in another year of extraordinary
circumstances.”
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75
Corporate Governance
Directors’ report
For the 52 weeks ended 28 March 2022
Directors
Details of our directors appear on pages 54 to 56. All of them served throughout the period except for Aisling Meany who was
appointed as a director on 1 September 2021. No other person was a director during the period other than Roger Lambert who
stepped down as a director on 31 July 2021.
Directors’ interests in the company’s share capital
Set out below are the interests in the company’s share capital of the directors who held office at the end of the period and of the
persons closely associated with them (as defined in the UK Market Abuse Regulation). These interests are in addition to those shown
in note 9(e) on page 110.
Stephen Goodyear1, 2
Beneficial
Patrick Dardis1, 2
Mike Owen1
Simon Dodd1, 3
Tracy Dodd1, 4
Nick Miller
Ian McHoul
Beneficial
Beneficial
Beneficial
Beneficial
Beneficial
Beneficial
Torquil Sligo-Young1, 2, 5, 6
Beneficial
Aisling Meany7
Trustee
Beneficial
As at
28 March 2022
29 March 2021
28 March 2022
29 March 2021
28 March 2022
29 March 2021
28 March 2022
29 March 2021
28 March 2022
29 March 2021
28 March 2022
29 March 2021
28 March 2022
29 March 2021
28 March 2022
29 March 2021
28 March 2022
29 March 2021
28 March 2022
A shares
200,424
200,424
90,817
97,906
3,317
3,317
4,163
4,163
8,831
11,413
58,587
58,587
3,000
3,000
271,069
279,874
4,154,340
4,154,340
–
Non-voting shares
3,265
3,265
–
–
2,040
2,040
–
–
–
–
408
408
2,000
2,000
15,081
15,081
499,591
499,591
–
1 Also interested in 5,819 (2021: 7,652) A shares held in trust by RBT II Trustees Limited – see note 33 on page 139.
2 Also interested in 337,067 (2021: 337,067) A shares held in trust by Young’s Pension Trustees Limited – see note 33 on page 139.
3 This does not include Tracy Dodd’s interest in the company’s share capital as a person closely associated with Simon Dodd.
4 This does not include Simon Dodd’s interest in the company’s share capital as a person closely associated with Tracy Dodd.
5 Torquil Sligo-Young and various members of his immediate family are discretionary beneficiaries under trusts holding 836,368 (2021: 836,368) of the A shares and 453,543 (2021: 453,543)
of the non-voting shares in respect of which Torquil Sligo-Young is shown as trustee in the above table.
6 This does not include Young’s Pension Trustees Limited’s interest in the company’s share capital as a person closely associated with Torquil Sligo-Young (but see 2 above and note 33 on
page 139).
7 Aisling Meany was appointed to the board in September 2021. She has indicated that she attends to acquire an interest in the company share capital during the financial year ending
3 April 2023.
Profit and dividends
The profit for the period attributable to shareholders was
£34.4 million. The directors recommend a final dividend
for the period of 10.26 pence per share (which, subject to
approval at the AGM, is expected to be paid on 7 July 2022 to
shareholders on the register at the close of business on 10 June
2022). When added to the interim dividend of 8.55 pence
per share paid in December 2021, this would produce a total
dividend for the period of 18.81 pence per share.
Disclosure of information to the auditor
Each of the directors shown on pages 54 to 56 confirms that
so far as they are aware, there is no information needed by the
company’s auditor in connection with preparing its report of
which the company’s auditor is unaware. Further, each of them
confirms that they have taken 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 is aware
of it. This paragraph is to be interpreted in accordance with
section 418 of the Companies Act 2006.
Qualifying indemnity provisions
The company’s articles of association contain an indemnity
provision for the benefit of the directors; this provision, which
is a qualifying third-party indemnity provision, is in force at
the date of this report and was in force throughout the period.
A further qualifying third-party indemnity provision is also in
force at the date of this report and was in force throughout
the period; this benefits Stephen Goodyear, Patrick Dardis and
Torquil Sligo-Young and relates to certain losses and liabilities
which they may incur as a result of or in connection with
anything properly done by them as attorneys under a property-
related power of attorney made by the company in May 2016.
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Important events since the end of the period
and likely future developments
As permitted under section 414C(11) of the Companies Act
2006, the directors have chosen to include in the strategic
report (on pages 1 to 50) 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.
Political donations
No political donations were made during the period.
Financial instruments and related matters
Included in note 26, on page 123, are the group’s financial risk
management objectives and policies and an indication of the
group’s exposure to certain risks. Those elements of that note
form part of this report and are incorporated by reference.
Employee engagement
The company prioritised communications with employees
during the period. Within the practical limitation of
confidentiality and security, information was provided to them
across a range of topics such as the impact of covid-19, trading
and operational matters, and board and staff changes.
Given the ongoing impact of covid-19, the company continued to
evolve and enhance methods of communication which included
the use of Zoom. A closed Facebook group called ‘Keeping in
Touch at Young’s’ was reinstated to provide updates on general
arrangements, address queries from employees and to publish
video messages from Patrick Dardis. All employees were invited
to join the group which allowed direct engagement across the
entire workforce. The Facebook group encouraged engagement
and interaction across all levels of the workforce and across
all locations. They featured topical elements such as efforts
fundraising for the NHS and various charities, inspirational video
clips and pictures. In addition, group members were encouraged
to share pictures and clips of their pets, their seasonal cooking
and baking, and their exercise efforts via the Young’s Strava
group. Through this Facebook group, employees who may have
been struggling were also signposted to organisations who could
provide additional support for their physical, mental and financial
wellbeing such as those offered by the Licensed Trade Charity.
These initiatives were well received by employees and helped
maintain engagement and interaction.
Employees were encouraged to use The Ram App, delivered by
the company’s e-learning platform, to access the Discover and
Keeping in Touch pages, the latter which replaced the Facebook
group when it was deactivated. Later in the period, the
company also launched the How are you? page on The Ram to
enhance mental, physical and financial wellbeing of employees
and publish topical information such as maintaining wellbeing
and menopause, as well as links to the Burnt Chef Project,
Licensed Trade Charity and the Young’s Strava page.
Within the constraints imposed by the impact of covid-19,
the company continued to consult with its employees and
their representatives, using the company’s information and
consultation committee. This long-established committee
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works to enhance communications within the company,
supplying information and giving opportunity for feedback and
consultation, improve employee awareness and involvement
and to support ongoing improvement within the business.
Members of the committee are elected by the employees
based in head office, with team members in the group’s
managed pubs having both an elected representative and a
nominated management representative, with the latter being one
of the group’s directors of operations. The committee was able to
meet twice during the period and a briefing sheet, summarising
the outcomes from the meeting, was communicated within the
business – this was initially emailed to all employees based in
head office, with the group’s operations managers then being
responsible for cascading that information down to the pub
managers within their area via divisional meetings and the pub
managers then having to pass it down further through team
briefings within their pubs. Each representative and pub manager
is responsible for feeding back the information discussed at the
committee’s meetings, acting as a point of contact for individuals
wishing to discuss matters and/or raise agenda items for
discussion at meetings, and seeking further employees’ views and
ideas on matters, all in order to provide feedback to the board.
To encourage further involvement and interest in the group’s
performance, the company operates a savings-related share
option scheme. Due to the impact of covid-19 and the
disproportionate impact of furlough on a significant proportion
of the group’s employees, the scheme was not offered in 2020.
The board maintained its support for the company’s wellness
initiatives, paying particular attention to employee mental health
and financial wellbeing, taking into account the extended impact
of government lockdowns and tier restrictions. The company
offers fully-funded counselling to employees at no cost to them
on a one-to-one confidential basis with a qualified counsellor;
by using alternative mechanisms such as FaceTime and
WhatsApp chat, this support was available throughout the year.
Young’s also continued its relationship with Salary Finance,
an independent company authorised and regulated by the
Financial Conduct Authority that offers a range of financial
services, including loans and savings products, as well as
education and financial tools. During the period, over 250
employees sought their help and advice, and a number of
employees took advantage of the loan and debt support they
provide. All employee communications are directly with Salary
Finance, and Young’s does not receive any financial benefit or
commission from offering this service.
During the period, three employees qualified as Mental
Health First Aiders and a further 48 qualified as Mental Health
First Aid Champions. Refresher training was also offered to
existing Mental Health First Aiders and Mental Health First Aid
Champions. The newly-trained employees will support their
colleagues across the business. An email address remained
available for employees to report concerns about others in
the workplace; all issues reported were fully investigated, with
advice or referral to external services as appropriate. In addition,
information on supporting mental health was published on
the closed Facebook page and via The Ram App, which is
available to every employee, signposting employees who may
be experiencing mental health crises to appropriate services.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Corporate Governance
Directors’ report continued
The company’s corporate social media accounts also supported
the company’s positive stance on mental health and a number
of items about mental health were shared publicly.
The company continued to provide information about a
range of topics, including the support available to employees,
from the Licensed Trade Charity (the ‘LTC’) and, in particular,
covid-19 specific assistance. They were also reminded of the
24/7 helpline and financial support on offer. The LTC was
first established in 1793; it aims to provide pubs, bar and
brewery people facing a crisis with practical, emotional and
financial support each year. During the period, more than
230 visits were made to the unique Young’s landing page
on the LTC website, and the LTC received over 20 calls from
individuals who identified themselves as Young’s employees.
In addition, financial grants of over £1,400 were made to
Young’s employees.
Throughout the period, the company took active steps
to promote government messages about covid-19 in the
workplace. Particular attention was paid to hygiene and cleaning
and the ‘stay at home’/‘self-isolation’ ‘rules’ if anyone developed
any of the symptoms. Where possible, working from home was
encouraged during periods of closure; as a result head office
teams worked remotely during some of the period.
The impact of government restrictions meant some employees
were working below their normal hours when the company’s
pubs and hotels were open. The ‘pick up a shift’ system allowed
employees to volunteer to work in a similar role at their normal
rate of pay elsewhere within the company. Not only did this
help to maintain employee earnings levels, but it retained
trained employees within the company’s businesses while giving
employees experience of working in a variety of pubs and
hotels. In addition, the company launched the Ram Agency,
offering fully flexible employment across the company’s pubs
and hotels for employees who were able to use ‘pick up a
shift’ to create a personalised rota that meets their needs and
circumstances. Since the Ram Agency’s launch, 106 employees
have joined, with a split of 54 employees in kitchen roles and
52 employees in front of house positions.
Employment inclusion and diversity
Young’s is an inclusive employer and diversity is important to it.
It therefore maintained its policy of:
• giving full and fair consideration to all applications for
employment, taking account of the applicant’s particular
aptitude and ability;
• seeking to continue to employ anyone who becomes
physically and/or mentally impaired while employed by the
company and arranging training in a role appropriate to the
person’s changed circumstances; and
• giving all employees equal opportunities for training, career
development and promotion.
For more on our approach to diversity and inclusion please
see page 29.
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Greenhouse gas emissions, energy
consumption and energy efficiency action
The directors have chosen to include the ‘Greenhouse gas
emissions, energy consumption and energy efficiency action’
disclosure within the sustainability report which forms part of
the strategic report, as permitted under section 414C(11) of
the Companies Act 2006). The disclosure can be found on page
35 of the sustainability report.
Engagement with suppliers, customers and
others in a business relationship with the
company
The following section should be read in conjunction with the
Section 172(1) statement starting on page 20 (as the directors
have chosen to include in that part of the strategic report
further information as regards the company’s engagement
with suppliers, customers and other in a business relationship
with the company, as permitted under section 414C(11) of the
Companies Act 2006).
Young’s has been in business since 1831 when Charles
Allen Young and Anthony Forthergill Bainbridge started a
brewery and pub company, with this leading to the company’s
incorporation in 1890. Understandably, to have remained
in business for so long and have achieved the success it has,
the company has had to build and maintain good, strong
and mutually beneficial business relationships with suppliers,
customers and others over the years. During the period, the
board remained alert to the importance of this continuing
and how the company’s long-term success relies, amongst
other things, on good business relations with this range of
external stakeholders.
The company’s business model and long-term strategy
(summarised on pages 10 and 15) have been tried and tested
over a number of years. As such, many of the company’s
business relationships have been in place for quite some time;
things nevertheless were kept under review during the period
to ensure that, amongst other things, the company offered a
responsible and covid-19 safe environment for its customers
and, pandemic-permitting, the company could continue to
maintain its reputation as a provider of a market-leading,
premium offering that new and existing customers would
want to enjoy and with which suppliers and others would
want to be associated.
Over 15 million personalised e-mails were sent during the year:
these kept our customers informed, for example, about events
in the pubs, On Tap treats, menu launches and new openings.
The company’s communications were further bolstered through
ongoing social media contact, including Facebook, Twitter and
Instagram. Social media provides an agile communications
platform to communicate and engage with customers: in spring
2021, the company had 10,000 Instagram followers across
our central @youngspubs account; this increased by 100%
during the period, as a result, of the company’s strengthened
engagement to 20,000 followers. Our pubs are also
encouraged to build strong and engaged social followings with
over 1 million followers receiving regular communication and
updates from their local pubs.
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For the mutual benefit of the company and its customers and
suppliers, the company continued to leverage the relationships
it has with its suppliers, especially those providing drink
products (as drink sales historically count for roughly 62% of
the company’s sales in any year). So, rather than just source
products from its drink suppliers and sell them on to its
customers, the company continued to look at ways of working
more closely, proactively and collaboratively with those suppliers
to create or increase consumer demand. The following are just
six illustrative examples of the benefits ensuing from those
close, proactive and collaborative relationships:
• Pernod Ricard UK pledged 50p charitable donation for every
Plymouth Gin and Tonic served across our pubs in Spring
2022, highlighting the sustainability credentials for Plymouth
and raising £20,000 for the Ocean Conservation Trust to
continue their work protecting our oceans;
• In conjunction with tournament partners, Heineken UK and
Sipsmith, we supported last summer’s major sporting events
such as the delayed UEFA Euro 2020 football tournament
and The Championships, Wimbledon;
• We launched a new range of bespoke flavoured gin serves
exclusively paired with Fever-Tree mixers and sodas, as a part
of the company’s ‘Let the Summer Be Gin’ campaign;
• Heineken UK provided a series of Orchard Thieves, Summer
Sunday garden events across our pubs with entertainment
provided by a contemporary brass band;
• Diageo GB provided support for the Guinness Six Nations
and St Patrick’s Day 2022 providing team rugby shirts and
merchandise together with in-pub entertainment to celebrate
St Patrick’s Day 2022; and
• Key suppliers (such as Young’s Beers and Camden Town
Brewery) joined forces with the company to reward
selected customers with an exclusive treat on Young’s Day,
17 September 2021, which could be redeemed via the
Young’s On Tap app. A commemorative birthday glass was
also created to celebrate the joint 190th Young’s and the
9th Beavertown Brewery birthdays in September 2021.
Online review platforms such as Google, TripAdvisor and
DesignMyNight enable customers to give speedy and relevant
opinions and comments, and a cloud-based reputation
management system used by the company allows it to assimilate
the feedback received.
The company’s online bookings have continued to grow
significantly as a huge proportion of the company’s customers
tended to book ahead of dining with us. Digital continues to
provide a key communications channel for the company’s
customers. Every step of the journey matters, building
relationships and strengthening connections before a customer
even steps into our pubs.
The company’s booking terms and conditions were regularly
updated throughout the year to ensure customers were aware
of any changes or restrictions for their visits. Customers opting
into marketing were notified of changes to our Privacy Policy by
email. New Cookie Management software was implemented
across all websites giving users the ability to grant or revoke
consent for analytical and marketing cookies being used to track
browsing behaviour.
On re-opening, every pub in the managed estate was visited
by at least one member of the board or senior management:
this was to reassure the pub’s teams and customers as to the
company’s commitment to them.
A customer-focussed central marketing campaign, ‘Together
at Young’s’, was created to encourage customers to visit our
pubs from Spring 2021 on re-opening for their long-awaited
reunions with friends and family. This ran across all digital
platforms, including paid digital advertising. This central
theme of togetherness underpinned the company’s customer
communications during a summer of celebrations in partnership
with the company’s key suppliers.
The company’s On Tap app continued to provide a premium,
speed efficient ‘order to table’ solution for customers especially
within our pub gardens. Over 750,000 customers used On Tap
since the re-opening of our pubs in April 2021, and, together,
they placed 3 million orders to a value of more than £55 million
contributing to a strong database growth, allowing the company
to communicate with those that signed up to marketing through
enhanced in-app content and push notifications.
The Great British Staycation was once again the focus of the
company’s hotel leisure marketing strategy throughout the
summer with a Cosy Nights’ stay campaign running over
the Autumn and Winter months. These campaigns were
communicated via e-marketing, social channels and paid
social communications.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Corporate Governance
Directors’ report continued
Corporate governance arrangements
The report on the company’s corporate governance
arrangements is set out on pages 51 to 74. That report forms
part of this report and is incorporated by reference.
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.
AGM
Notice convening the AGM is set out on pages 141 to 145;
notes explaining the resolutions being proposed are on pages
146 and 147.
Notifications of major holdings
of voting rights
As at 28 March 2022, the company had been notified of
the following holdings of 3% or more of the voting rights
in the company:
Torquil Sligo-Young
Octopus Investments Nominees Ltd
James Young
Caroline Chelton
Canaccord Genuity Group Inc.
BlackRock Investment Management (UK) Ltd
Lindsell Train Limited
Alice Parasram
12.76%
12.10%
11.20%
10.09%
5.55%
5.07%
4.89%
3.30%
No changes in the above holdings, and no other holdings
of 3% or more of the voting rights in the company, had
been notified to the company between 29 March 2022
and 17 May 2022, both dates inclusive.
Statement of certain responsibilities in relation
to the financial statements and otherwise
The directors are responsible for preparing the annual report
and the financial statements in accordance with applicable UK
law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have elected to prepare the group and parent
company financial statements in accordance with UK-adopted
international accounting standards (‘IFRSs’). Under company law
the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state
of affairs of the group and the company and of the profit or
loss of the group and the company for that period. In preparing
these financial statements the directors are required to:
• select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors and then apply them consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the
specific requirements in IFRSs is insufficient to enable users to
understand the impact of particular transactions, other events
and conditions on the group and company financial position
and financial performance;
• in respect of the group financial statements, state whether
UK-adopted international accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
• in respect of the parent company financial statements, state
whether UK-adopted international accounting standards have
been followed, subject to any material departures disclosed
and explained in the financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company and/or
the group will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company’s
and group’s transactions and disclose with reasonable accuracy
at any time the financial position of the company and the group
and enable them to ensure that the company and the group
financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the
group and parent company and group and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a strategic report, directors’ report
and corporate governance statement that comply with that
law and those regulations. The directors are responsible for
the maintenance and integrity of the corporate and financial
information included on the company’s website.
Preparation and disclaimer
This annual report, together with the strategic report (on pages
1 to 50) and the financial statements for the period ended
28 March 2022 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
Chris Taylor
Company Secretary
18 May 2022
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Financial Statements
“ Securing our long-term
future and success also
means creating value
for all our stakeholders,
ensuring that they are a
key consideration in our
decision-making process.”
82 Independent auditor’s report
90 Group income statement
91 Group statement of comprehensive income
92 Balance sheets
93 Statements of cash flow
94 Group statement of changes in equity
95 Parent company statement of changes in equity
96 Notes to the financial statements
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Financial Statements
Independent auditor’s report
Independent auditor’s report to the members
of Young & Co.’s Brewery, P.L.C.
Opinion
In our opinion:
• Young & Co.’s Brewery, P.L.C.’s group financial statements
and parent company financial statements (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 28 March 2022 and
of the group’s profit for the 52 weeks then ended;
• the group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
• the parent company financial statements have been properly
prepared in accordance with UK adopted international
accounting standards as applied in accordance with section
408 of the Companies Act 2006; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements of Young & Co.’s
Brewery, P.L.C. (the ‘parent company’) and its subsidiaries (the
‘group’) for the 52 weeks ended 28 March 2022 which comprise:
Parent company
Balance sheet as at
28 March 2022
Statement of changes in equity
for the 52 weeks then ended
Statement of cash flow for
the 52 weeks then ended
Related notes 1 to 36 to
the financial statements,
including a summary of
significant accounting policies
Group
Group balance sheet as at
28 March 2022
Group income statement for
the 52 weeks then ended
Group statement of
comprehensive income for
the 52 weeks then ended
Group statement of changes
in equity for the 52 weeks
then ended
Group statement of cash flow
for the 52 weeks then ended
Related notes 1 to 36 to the
financial statements, including
a summary of significant
accounting policies
The financial reporting framework that has been applied in
their preparation is applicable law and UK adopted international
accounting standards and, as regards to the parent company
financial statements, as applied in accordance with section 408 of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the
group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
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We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group and
parent company’s ability to continue to adopt the going concern
basis of accounting included:
• Obtaining an understanding of management’s basis for use
of the going concern basis of accounting. To challenge the
completeness of this assessment, we independently identified
factors that may indicate events or conditions that may cast
significant doubt on the group’s ability to continue as a going
concern. We designed our audit procedures to evaluate the
effect of these risks on the group’s ability to continue as a
going concern;
• Agreeing the group’s available financing and related terms,
including covenants, to the original debt agreements;
• Obtaining the cash flow forecast models used by the Board in
its assessment, reviewing their arithmetical accuracy, whether
they have been approved by the Board and considering the
group’s historical forecasting accuracy for periods when the
group’s pubs were able to trade without significant restrictions;
• Recalculating the group’s banking covenant tests at each
quarter end test date within the going concern period;
• Evaluating whether the assumptions, including over the timing
and extent to which cash flows are impacted by the direct and
indirect effects of the covid-19 pandemic and the current high
levels of cost inflation, were realistic, achievable and consistent
with the external and internal environment as well as other
matters identified in the audit;
• Considering management’s stress testing of the group’s cash
flow forecast models and their impact on forecast liquidity and
banking covenants, specifically whether the stress tests were of
reasonably possible adverse effects that could arise from these
risks individually and collectively, and considering whether the
factors we identified independently that could adversely impact
the group had been appropriately included;
• Performing our own independent reverse stress testing of
the group’s cash flow forecast models and their impact on
forecast liquidity and banking covenants to identify under what
circumstances the group’s liquidity would be compromised
due to a breach of banking covenants, including periods of
enforced closure, downturns in trading due to covid-19 or
changing consumer behaviour, or the non-recovery of high
cost inflation;
• Considering the likelihood of management’s ability to
execute mitigating actions based on our understanding of
the group and the sector, including whether those mitigating
actions were controllable by management. This assessment
was supported by our analysis of management’s historical
ability to take controllable actions such as non-payment of
dividends, suspension of non-essential capital expenditure and
inventory orders;
• Assessing the appropriateness of the going concern disclosures
in describing the risks associated with the group’s ability to
continue as a going concern for the period to 27 June 2023;
and
• Enquiring of management as to whether any events or
conditions beyond 27 June 2023 had been identified that may
cast significant doubt on the group’s ability to continue as a
going concern and evaluating whether we were aware of any
such events or conditions from our audit work.
The key observations we communicated to the Audit Committee
were that the group has significant committed borrowing
facilities and available liquidity through the going concern period.
In management’s base case (which includes the repayment of
£30m of borrowing facilities) and sensitised scenarios (which
reflect possible further covid-19 restrictions, high cost inflation or
a slowdown in customer spending influenced by the current cost
of living crisis) the group remains in compliance with all banking
covenants through the going concern period. In addition,
based on management’s reverse stress testing, the events that
would lead to liquidity being compromised were considered of
remote likelihood.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group and parent company’s ability to continue as a going
concern for a period to 26 June 2023 from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report. However, because not all future events or conditions
can be predicted, this statement is not a guarantee as to the
group’s ability to continue as a going concern.
Overview of our audit approach
Audit scope
Key audit
matters
• We performed an audit of the complete
financial information of the group, which
accounted for 100% of adjusted profit before
taxation, 100% of revenue and 100% of
total assets.
• Valuation of the freehold pub estate
• Asset impairment
• Lucky Onion group preliminary purchase
price allocation (new risk for 2022)
• Deferred taxation arising on the valuation of
the pub estate
• Management override in the recognition
of revenue
Materiality
• Overall group materiality of £2.1m,
which represents 5% of adjusted profit
before taxation.
An overview of the scope of the parent
company and group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and
our allocation of performance materiality determine our audit
scope for each company within the group. Taken together,
this enables us to form an opinion on the consolidated
financial statements.
The group’s operations are based solely in the UK with a
single head office and finance function and therefore all audit
procedures are completed by one audit team at this location.
The audit team includes tax and IT specialists.
In assessing the risk of material misstatement to the group
financial statements, and to ensure we had adequate quantitative
coverage of significant accounts in the financial statements we
performed full scope audit procedures over 100% of the group’s
results for the 52 weeks to 28 March 2022 and 100% of the
group’s total assets at that date. We obtained an understanding
of the entity-level controls of the group which assisted us in
identifying and assessing risks of material misstatement due to
fraud or error, as well as assisting us in determining the most
appropriate audit strategy. This approach is consistent with the
prior period.
Climate change
There has been increasing interest from stakeholders as to
how climate change will impact the group. The group has
determined that the most significant future impacts from climate
change on its operations will be from increased occurrence of
extreme weather events, regulations, government interventions,
reporting obligations and inability to meet climate change
targets. This is explained on page 40 in the principal risks and
uncertainties, which forms part of the ‘Other information’, rather
than the audited financial statements. Our procedures on these
disclosures therefore consisted solely of considering whether
they are materially inconsistent with the financial statements or
our knowledge obtained in the course of the audit or otherwise
appear to be materially misstated.
Our audit effort in considering climate change was focused on
evaluating management’s assessment of the impact of climate
change risk, physical and transition, and ensuring that the effects
of climate risks disclosed on page 40 have been appropriately
reflected in the carrying value of assets with indefinite and
long lives, asset values and associated values where values are
determined through modelling future cash flows, being goodwill,
property and equipment and right of use assets. We also
challenged the Directors’ considerations of climate change in
their assessment of going concern and associated disclosures.
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83
Financial Statements
Independent auditor’s report continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
Key observations communicated to the
Audit Committee
We concluded that the
methodology applied is
reasonable and that the external
valuations are an appropriate
assessment of the market
value of freehold properties at
28 March 2022.
We concluded that the values
of the sample of 33 properties
tested by our internal property
valuations specialists were within
the reasonable range of values
as assessed by them.
We consider that management
provided an appropriate level
of review and challenge over
the valuations and we did not
identify evidence of undue
management bias.
We reviewed the disclosures
in note 19 to the financial
statements, and consider them
to be appropriate.
Risk
Valuation of the freehold pub estate
Our response to the risk
Refer to the Audit Committee Report (page 66);
Accounting policies (page 98); and Note 19 of the
Consolidated Financial Statements (page 118).
We performed a walkthrough of each aspect of the group’s
freehold pub valuation process and assessed the design
effectiveness of the key controls that were in place.
We met with management and the group’s external
valuation specialists to discuss their valuation approach and
the judgements made in determining the fair value of the
freehold pub estate. These included the fair maintainable
trade, EBITDA multiples, spot valuations and the
assumptions made in respect of the impact of covid-19.
We assessed the competence and objectivity of the
external valuer, including consideration of its qualifications
and expertise.
We tested the inputs, assumptions and methodology used
by the external valuers. We tested management’s valuation
model for mathematical accuracy and consistency with
underlying records. This included an assessment of the fair
maintainable trade of each pub by reference to the group’s
financial records, management’s historical forecasting
accuracy and its consideration of the external valuation
results on the remainder of the estate.
Of the group’s 159 freehold pubs, with support from our
property valuation specialists we tested a sample of 33
pub valuations. We performed testing over the underlying
valuation assumptions, with a particular focus on pubs
valued using a spot valuation as these involved a higher
level of management judgement.
We benchmarked the group’s pub valuations by comparing
with other pub market transactions. We also considered
the approach taken to reflect any ongoing impact of the
covid-19 pandemic on freehold pub values.
We verified that changes in pub valuations were
appropriately accounted for through the revaluation reserve
or the income statement.
We considered the appropriateness of the valuation
disclosures in note 19 the financial statements and whether
they were compliant with the fair value information required
under IFRS 13.
In accordance with the group’s accounting policy
for property and equipment, management applies
the revaluation model for the freehold pub estate,
which had a carrying value of £761.0 million
at 28 March 2022 (2021: £726.1 million).
As permitted by IAS 16 and in common with
other listed pub operators in the UK, this
revaluation was achieved through:
• A reassessment of the fair maintainable trade
of each freehold pub based on its current
and forecast trading performance, or a
spot valuation;
• A revaluation by Savills, independent chartered
surveyors, of a representative sample of 20%
of the group’s freehold pubs, including pubs
of varying location and type; and
• A revaluation of the remaining 80% of
the freehold pub estate on a desktop
basis by Savills and the group’s director
of property, using updated trading results,
management’s knowledge of each pub, and
appropriate consideration of the results of the
representative sample valuation.
This involves significant management judgement,
particularly in respect of the methodology
and assumptions used in the valuation model.
Management also assesses viable alternative
uses for a property should they provide
increased value.
The ongoing uncertainties over the current
economic environment caused by the covid-19
pandemic and other external factors, had an
impact on the valuation of the group’s freehold
pub estate.
As described in note 19, Savills highlighted that its
assessment of the fair value of the freehold pub
estate no longer contains a material uncertainty
(which had been the case in the prior period) as
the impact of the covid-19 pandemic on property
values became less uncertain during the period.
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Risk
Asset impairment
Our response to the risk
Key observations communicated to the
Audit Committee
Refer to the Audit Committee Report (page 66);
Accounting policies (page 98); and Note 18 and
20 of the Consolidated Financial Statements
(pages 116 and 121).
We understood and walked through the methodology
applied by management in performing its impairment test
for each of the relevant pubs, and assessed the design
effectiveness of the key controls that are in place.
We concluded that no
impairment was required at
28 March 2022, based on the
results of our work.
In addition to its freehold property portfolio,
the group has significant other assets connected
with its pub estate, including goodwill of
£32.5 million (2021: £32.5 million), fixtures,
fittings and equipment of £78.1 million
(2021: £79.5 million) and right of use assets of
£147.0 million (2021: £158.0 million).
The continued uncertainties over the current
economic environment caused by the covid-19
pandemic, the current high levels of cost inflation
and any changes in consumer spending habits
arising from the ‘cost of living’ crisis, has been
identified as an indicator of impairment.
Impairment is tested on the basis of each
individual cash generating unit (an individual
pub) or in the case of goodwill, the group of pubs
associated with it.
There is a risk that pubs may not achieve the
anticipated business performance to support
their carrying value. This could lead to an
impairment charge that has not been recognised
by management.
Significant judgement is required in forecasting
the future cash flows of each pub, together with
the rate at which they are discounted.
We assessed the appropriateness of management’s
identification of cash generating units being at the individual
pub level and, in the case of goodwill, the fact that the
goodwill was allocated to the group of cash generating units
(individual pubs) associated with it.
We tested the arithmetical accuracy and integrity of the
impairment model and confirmed that the forecasts were
consistent with the Board approved forecasts and those used
in the going concern assessments.
For those pubs or groups of pubs that assumed more than
a long-term growth rate in the short-term, we considered
management’s estimates in the context of the actions
already taken to achieve profit improvement, the expected
impact of other external events and management’s historical
forecasting accuracy.
However, the impairment
test is sensitive to adverse
changes that could arise given
the uncertainties surrounding
future trading, including those
arising from the covid-19
pandemic, the current high
levels of cost inflation and any
changes in consumer spending
habits arising from the ‘cost of
living’ crisis.
Management describes these
sensitivities appropriately in
notes 18 and 20 to the financial
statements, in accordance with
IAS 36.
We used our internal valuations specialists to support our
assessment of the discount rate and long-term growth rate
applied to cash flows by independently determining an
acceptable range of values for each assumption.
In respect of the impact of covid-19, cost inflation and
consumer spending habits on both short-term trading and
the longer-term growth rate, we compared management’s
assumptions against external economic forecasts and actual
performance from the last year.
We calculated the degree to which the key inputs and
assumptions, including location-specific evidence, would
need to fluctuate before an impairment was triggered and
considered the likelihood of this occurring. We performed
our own sensitivities on the group’s forecasts, which
included various scenarios on short-term disruption and
long-term growth rate. We then determined whether
adequate headroom remained using these sensitivities and
our independent assessment.
We assessed the disclosures in notes 18 and 20 of the
financial statements against the requirements of IAS 36
Impairment of Assets, in particular the requirement to
disclose further sensitivities for CGUs where a reasonably
possible change in a key assumption would cause
an impairment.
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85
Financial Statements
Independent auditor’s report continued
Risk
Lucky Onion pubs preliminary purchase price allocation (new risk for 2022)
Our response to the risk
Key observations communicated to the
Audit Committee
We evaluated that the
preliminary identification and
valuation of assets and liabilities
acquired was complete and
appropriate, and that the
disclosures made note 15 to
the financial statements are in
accordance with IFRS 3.
We considered management’s
judgements in the recognition
of deferred tax arising on the
valuation of the pub estate
to be appropriate and the
underlying calculation to be
accurate. We also consider that
the disclosures in note 27 to
the group financial statements
are appropriate.
Refer to the Audit Committee Report (page 66);
Accounting policies (page 98); and Note 15
of the Consolidated Financial Statements
(page 113-114).
In February 2022 the group acquired six Lucky
Onion pubs for a total cash cost of £24.3 million.
The acquisition was accounted for as a business
combination and involved a number of significant
and complex judgements, particularly in
identifying and determining the fair value of the
assets acquired and liabilities assumed.
Management performed a preliminary purchase
price allocation exercise. The primary element
of the valuation exercise assessed the fair values
of the six pubs acquired, whether freehold
property or right of use assets and lease liabilities
associated with leasehold pubs. The allocation
also considered the fair values of intangible assets,
contract liabilities, other assets and liabilities and
deferred tax. No goodwill was recognised on
the transaction.
We performed a walkthrough of the group’s process for
determining the fair value of assets acquired and liabilities
assumed, including the completeness of those assets and
liabilities, and assessed the design effectiveness of the key
controls that were in place.
We read the Sale and Purchase Agreement to corroborate
the group’s accounting conclusions and identify any clauses
that could have an accounting impact or other assets or
liabilities that the group had not identified.
For both freehold and leasehold pubs, we obtained the
group’s valuation expert’s (Savills) preliminary assessment
supporting the value of the freehold pubs or right of use
assets, and performed similar procedures as we describe for
the “valuation of the freehold pub estate” key audit matter.
For leasehold pubs, we considered management’s estimate
of the value of the lease liabilities, including the incremental
borrowing rate, and its measurement of the related right of
use asset.
For other assets acquired and liabilities assumed, we
evaluated the group’s methodology, assumptions and
estimates used in determining fair value.
We evaluated the competence and independence of the
property valuation experts used by the group by reference
to their qualifications and experience.
We evaluated whether appropriate disclosures are included
in the group financial statements.
Deferred tax arising on the valuation of the pub estate
Refer to the Audit Committee Report (page 66);
Accounting policies (page 98); and Note 27 of the
Consolidated Financial Statements (page 129).
At 28 March 2022, the group had deferred
tax assets of £4.1 million (2021: £8.6 million)
and deferred tax liabilities of £108.3 million
(2021: £73.6 million).
There is complexity in the group’s accounting
for deferred tax. Specifically, a significant level of
management judgement and complex calculations
are required in accounting for the deferred tax
arising both on the valuation of each freehold
pub and on the right of use asset for each
leasehold pub.
These judgements are focused on:
•
•
•
the treatment of capital losses, rollover
relief, indexation allowances and initial
recognition exemptions;
recognising deferred tax on the pubs on a
sale, in-use or a dual basis;
recognising the deferred tax at the correct
corporation tax rate, depending on the
underlying assumptions; and
• calculating the deferred tax associated
with right of use assets recognised under
IFRS 16, which have a similar risk profile
to the freehold pub estate.
We performed a walkthrough of the group’s process for
determining the deferred tax arising from the valuation of
the pub estate. We also assessed the design effectiveness of
the key controls that were in place.
In conjunction with our tax specialists we tested the
deferred tax calculations based on the valuation of
each freehold pub and the right of use asset for each
leasehold pub. This focused on verifying the inputs into
the deferred tax calculation, testing its mathematical
accuracy and recalculating the deferred tax for a sample
of pubs across the estate. This included a review of capital
losses, rollover relief, indexation allowances and initial
recognition exemptions.
We challenged management on the assumptions used in
calculating the deferred tax balances, including whether the
deferred tax was consistent with the group’s intended use of
each pub – being a sale, in-use or a dual basis.
We evaluated if the tax rates applied in calculating the
deferred tax on the group’s pub estate were appropriate
based on when the balances are expected to unwind.
We considered whether the related deferred tax disclosures,
included in note 27 to the group financial statements, were
in line with IAS 12 requirements.
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Risk
Management override in the recognition of revenue
Our response to the risk
Key observations communicated to the
Audit Committee
We performed a walkthrough of each of the group’s
significant revenue processes, including the recording
of manual journal adjustments, and assessed the design
effectiveness of the key controls that are in place.
We applied correlation data analysis over the group’s
revenue journal population to identify how much of the
revenue was converted to cash and to isolate non-standard
revenue transactions for further analysis.
We identified manual journals to revenue and obtained
corroborative evidence to support them.
We performed cut-off testing procedures including review of
post period end cash receipts and journals and an analytical
review of significant variances.
We did not identify any instances
of management override of
controls, including through
topside journals. Based on our
work, which included using data
analysis tools to test 100% of
the group’s revenue transactions
and the extent to which they
converted to trade receivables or
cash, we consider that revenue is
fairly stated.
Refer to the Accounting policies (page 98).
The group recorded revenue from continuing
operations of £309.0 million in the year
(2021: £88.0 million). The vast majority of
the group’s revenue transactions are non-
complex, with no judgement applied over the
amount recorded.
We consider the significant risk relating to revenue
to be around management override of controls
and topside journals to revenue.
For managed houses, revenue is typically
comprised of a large number of low value
transactions. Although there is little management
judgement involved, there is a risk that manual
topside adjustments could be posted which could
result in revenue being overstated or sales not
being recorded. For the tenanted pubs there is
also a risk that manual topside adjustments could
be posted to revenue.
In the prior period, our auditor’s report included a key audit matter in relation to going concern. In the current period, following the
improvement in the group’s results going concern had a reduced effect on the overall audit strategy, the allocation of resources in the
audit; and the efforts of the engagement team. As a result, in the
current period we determined that going concern was not a key
audit matter.
Our application of materiality
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the financial statements.
Materiality provides a basis for determining the nature and
extent of our audit procedures.
We determined materiality for the group to be £2.1 million
(2021: £1.2 million), which is 5% of adjusted profit before
taxation (2021: 3.5% of 2020 profit before taxation, adjusted
for the movement on the revaluation of properties). We believe
that adjusted profit before taxation is considered to be the focus
of the group’s stakeholders. In the prior year (2021), we used
the 2020 results as a basis for materiality given the significant
impact of the covid-19 pandemic on the Group’s 2021 results,
applying a lower percentage due to the uncertainty. However, for
the current year (2022), the Group was less affected by covid-19
and the current year’s results provided an appropriate basis
for materiality.
We believe that the primary area of focus of the parent
company’s stakeholders are consistent with those of the group
and despite the adjusted profit before taxation being a higher
figure, we have capped materiality at £2.1 million, in line with
the group.
Performance materiality
The application of materiality at the individual account or balance
level. It is set at an amount to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the group’s overall control environment,
our judgement was that performance materiality was 75%
(2021: 75%) of our planning materiality, namely £1.6m
(2021: £0.9m). We have set performance materiality at this
percentage to reflect the results of our testing of the group’s
systems and processes and historical audit findings.
Reporting threshold
An amount below which identified misstatements are considered
as being clearly trivial.
We agreed with the Audit Committee that we would report to
them all uncorrected audit differences in excess of £105,000
(2021: £60,000), which is set at 5% of planning materiality,
as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in
light of other relevant qualitative considerations in forming
our opinion.
Other information
The other information comprises the information included in
the annual report other than the financial statements and our
auditor’s report thereon. The directors are responsible for the
other information within the annual report.
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87
Financial Statements
Independent auditor’s report continued
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of
the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
• 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; and
• the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report
by exception
In the light of the knowledge and understanding of the group
and the parent company and its environment obtained in the
course of the audit, we have not identified material misstatements
in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in
relation to which 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.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement
set out on page 72, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group and parent company’s ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
Explanation as to what extent the audit was
considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including
fraud. The risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through
collusion. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with governance
of the company and management.
• We obtained an understanding of the legal and regulatory
frameworks that are applicable to the group and determined
that the most significant are:
– Those that relate to the reporting framework: UK adopted
international accounting standards, the UK Companies Act
2006 and AIM Rules;
– Those that relate to the accrual or recognition of expenses
for taxation, such as UK Corporate Tax legislation; and
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– Those that relate to the accrual for or recognition of
expenses for employee benefit costs including post-
employment benefit costs, as well as the treatment of
its employees.
• We understood how the group is complying with those
frameworks by making inquiries of management, those
charged with governance, internal audit, those responsible for
legal and compliance procedures and the company secretary.
We corroborated our inquiries through inspection of board
minutes and correspondence with regulatory authorities and
through attendance at Audit Committee meetings throughout
and subsequent to the period under audit.
• We assessed the susceptibility of the group’s financial
statements to material misstatement, including how fraud
might occur by making inquiries of management, those
charged with governance, internal audit and various
other individuals within the financial reporting function.
We corroborated these inquiries by inspecting board minutes,
internal audit reports and findings, reports to the group’s
internal whistleblowing hotline and by understanding both
the group’s bonus scheme structure and the expectations of
investors and analysts, to understand areas in which individuals
may be incentivised to commit fraud.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such laws and
regulations. Our procedures involved making inquiries
as described above, inspecting minutes of all significant
board and committee meetings, reading correspondence
with regulatory authorities, testing manual journal entries
with higher risk characteristics and testing unusual or non-
standard transactions.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
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.
Jon Killingley (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
18 May 2022
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89
Financial Statements
Group income statement
For the 52 weeks ended 28 March 2022
Continuing operations
Revenue
Other income
Operating costs before adjusting items
Adjusted operating profit/(loss)
Adjusting items
Operating profit/(loss)
Finance costs
Finance charge for pension obligations
Profit/(loss) before tax
Income tax (expense)/credit
Profit/(loss) for the period from continuing operations
Discontinued operations
Profit/(loss) for the period from discontinued operations1
Profit/(loss) for the period attributable to shareholders of the parent company
Earnings/(loss) per 12.5p ordinary share
Basic
Diluted
Earnings/(loss) per 12.5p ordinary share for continuing operations
Basic
Diluted
Notes
7
10
8
11
13
28
14
5
17
17
17
17
2022
£m
309.0
5.0
(262.6)
51.4
0.3
51.7
(9.5)
(0.1)
42.1
(17.2)
24.9
9.5
34.4
Pence
58.83
58.80
42.58
42.56
Restated
2021
£m
88.0
4.7
(125.9)
(33.2)
(1.3)
(34.5)
(9.8)
(0.2)
(44.5)
6.9
(37.6)
(0.7)
(38.3)
Pence
(68.23)
(68.23)
(66.98)
(66.98)
1 A gain on disposal of £9.0 million was recognised and has been recorded within adjusting items (see note 5).
Prior period comparatives have been restated for the application of IFRS 5 to re-present financial information in relation to
discontinued operations (see notes 2 and 5).
The notes on pages 96 to 140 form part of these financial statements.
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Group statement of comprehensive income
For the 52 weeks ended 28 March 2022
Profit/(loss) for the period
Other comprehensive income
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
Items that will be reclassified subsequently to profit or loss:
Net movement of interest rate swaps - cash flow hedge
Tax on fair value movement of interest rate swaps
Total comprehensive income/(loss) attributable to shareholders of the parent company
Total comprehensive income/(loss) attributable to shareholders of the parent company from
continuing operations
Total comprehensive income attributable to shareholders of the parent company from
discontinued operations1
1 A gain on disposal of £9.0 million was recognised and has been recorded within adjusting items (see note 5).
Notes
2022
£m
34.4
2021
£m
(38.3)
19
28
26
28.7
17.2
(25.3)
5.2
(1.1)
24.7
59.1
9.0
0.9
(4.0)
2.5
(0.5)
7.9
(30.4)
49.6
(30.9)
9.5
0.5
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The notes on pages 96 to 140 form part of these financial statements.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
91
Financial Statements
Balance sheets
28 March 2022
Non-current assets
Goodwill
Property and equipment
Right-of-use assets
Investment in subsidiaries
Deferred tax assets
Derivative financial instruments
Retirement benefit schemes
Current assets
Inventories
Trade and other receivables
Income tax receivable
Cash
Asset held for sale
Total assets
Current liabilities
Borrowings
Lease liabilities
Derivative financial instruments
Trade and other payables
Non-current liabilities
Borrowings
Lease liabilities
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
Notes
Group
2022
£m
18
19
20
21
27
26
28
22
23
24
26
30
26
25
26
30
26
27
28
31
32.5
808.0
147.0
–
4.1
2.2
14.3
1,008.1
4.7
8.9
6.2
34.0
53.8
–
1,061.9
(30.0)
(4.9)
(0.3)
(43.7)
(78.9)
(103.8)
(69.1)
–
(108.3)
(2.1)
(283.3)
(362.2)
699.7
7.3
7.7
1.8
1.7
249.4
431.8
699.7
2021
£m
32.5
773.7
158.0
–
8.6
–
–
972.8
2.6
10.4
5.8
4.7
23.5
1.2
997.5
(29.8)
(4.9)
(1.8)
(15.8)
(52.3)
(143.4)
(75.3)
(1.4)
(73.6)
(6.1)
(299.8)
(352.1)
645.4
7.3
7.6
1.8
(2.4)
253.6
377.5
645.4
Company
2022
£m
2021
£m
31.0
803.5
139.4
14.3
4.1
2.2
14.3
1,008.8
4.7
9.7
6.3
34.0
54.7
–
1,063.5
(30.0)
(4.1)
(0.3)
(55.8)
(90.2)
(103.8)
(63.6)
–
(108.1)
(2.1)
(277.6)
(367.8)
695.7
7.3
7.7
1.8
1.7
240.2
437.0
695.7
31.0
769.1
149.2
14.3
8.6
–
–
972.2
2.6
11.3
6.0
4.7
24.6
1.2
998.0
(29.8)
(4.1)
(1.8)
(27.5)
(63.2)
(143.4)
(69.1)
(1.4)
(73.4)
(6.1)
(293.4)
(356.6)
641.4
7.3
7.6
1.8
(2.4)
244.4
382.7
641.4
The company’s profit after tax from continuing operations for the period was £24.9 million (2021: loss after tax of £37.6 million).
The company’s profit after tax from discontinued operations was £9.5 million (2021: loss after tax of £0.7 million).
Approved by the board of directors and signed on its behalf by:
Patrick Dardis
Chief Executive
18 May 2022
Michael Owen
Chief Financial Officer
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The notes on pages 96 to 140 form part of these financial statements.
Young & Co.’s Brewery, P.L.C. Registered in England number 32762.
Statements of cash flow
For the 52 weeks ended 28 March 2022
Operating activities
Net cash generated from operations
Tax paid
Net cash flows from/(used in) operating activities
Investing activities
Proceeds from disposal of property and equipment1
Purchases of property and equipment
Business combinations, net of cash acquired
Net cash flows used in investing activities
Financing activities
Interest paid
Issued equity, net of transaction costs
Equity dividends paid
Payments of principal portion of lease liabilities
Repayment of borrowings2
Proceeds from borrowings
Net cash flows (used in)/from financing activities
Net increase in cash
Cash at the beginning of the period
Cash at the end of the period
Notes
34
19
15
16
Group
2022
£m
107.0
(5.1)
101.9
59.7
(36.9)
(36.9)
(14.1)
(9.7)
0.1
(5.0)
(4.1)
(39.8)
–
(58.5)
29.3
4.7
34.0
2021
£m
(23.0)
–
(23.0)
0.4
(19.1)
–
(18.7)
(9.8)
84.9
–
(4.3)
(115.5)
90.0
45.3
3.6
1.1
4.7
Company
2022
£m
106.3
(5.1)
101.2
59.7
(36.9)
(36.9)
(14.1)
(9.5)
0.1
(5.0)
(3.6)
(39.8)
–
(57.8)
29.3
4.7
34.0
2021
£m
(23.9)
–
(23.9)
0.4
(19.1)
–
(18.7)
(9.4)
84.9
–
(3.8)
(115.5)
90.0
46.2
3.6
1.1
4.7
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1 £53.0 million related to the sale of the Ram Pub Company (see note 5). The remaining balance related to other disposals of tenanted sites.
2 In the current period, the group repaid the £30.0 million Covid Corporate Financing Facility debt (net of £0.2 million fees) and the £10.0 million Revolving Credit Facility debt. During the prior
period, repayments of borrowings related to £65.5 million of Revolving Credit Facility debt and £50.0 million of syndicated facility with RBS and Barclays.
The notes on pages 96 to 140 form part of these financial statements.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
93
Financial Statements
Group statement of changes in equity
At 28 March 2022
Notes
Share
capital1
£m
13.6
Capital
redemption
reserve
£m
1.8
Hedging
reserve
£m
(4.4)
Revaluation
reserve
£m
248.4
Retained
earnings
£m
331.4
Total
equity
£m
590.8
At 30 March 2020
Total comprehensive income
Loss for the period
Other comprehensive income
Unrealised gain on revaluation of property
Remeasurement of retirement benefit schemes
Net movement of interest rate swaps – cash flow hedge
Tax on above components of other comprehensive income
Total comprehensive loss
Transactions with owners recorded directly in equity
Share capital issued2
Share based payments
Movement in shares held by The Ram Brewery Trust II
At 29 March 2021
Total comprehensive income
Profit for the period
Other comprehensive income
Unrealised gain on revaluation of property
Remeasurement of retirement benefit schemes
Net movement of interest rate swaps – cash flow hedge
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
At 28 March 2022
19
28
26
14
32
19
28
26
14
16
32
–
–
–
–
–
–
–
1.3
–
–
1.3
14.9
–
–
–
–
–
–
–
0.1
–
–
–
0.1
15.0
–
–
–
–
–
–
–
–
–
–
–
1.8
–
–
–
–
–
–
–
–
–
–
–
–
1.8
–
–
(38.3)
(38.3)
–
–
2.5
(0.5)
2.0
2.0
–
–
–
–
(2.4)
9.0
–
–
(3.8)
5.2
5.2
–
–
–
–
253.6
–
0.9
–
(0.2)
0.7
(37.6)
83.6
(0.1)
0.2
83.7
377.5
9.0
0.9
2.5
(4.5)
7.9
(30.4)
84.9
(0.1)
0.2
85.0
645.4
–
–
34.4
34.4
–
–
5.2
(1.1)
4.1
4.1
–
–
–
–
–
1.7
28.7
–
–
(22.8)
5.9
5.9
–
–
(10.1)
–
(10.1)
249.4
–
17.2
–
(2.5)
14.7
49.1
–
(5.0)
10.1
0.1
5.2
431.8
28.7
17.2
5.2
(26.4)
24.7
59.1
0.1
(5.0)
–
0.1
(4.8)
699.7
1 Total share capital comprises the nominal value of the share capital issued and fully paid of £7.3 million (2021: £7.3 million) and the share premium account of £7.7 million (2021: £7.6 million).
Share capital issued in the period comprises the nominal value of £nil (2021: £1.2 million) and share premium of £0.1 million (2021: £0.1 million).
2 During the prior period the group raised equity, generating proceeds of £84.8 million, net of transaction costs. A cash box structure was used in such a way that merger relief was available under
Companies Act 2006, section 612, and thus no share premium was recorded. As the redemption of the cash box entity’s preference shares was in the form of cash, the transaction was treated as
qualifying consideration and the premium was therefore considered to be a realised profit.
The notes on pages 96 to 140 form part of these financial statements.
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Parent company statement of changes in equity
At 28 March 2022
At 30 March 2020
Total comprehensive income
Loss for the period
Other comprehensive income
Unrealised gain on revaluation of property
Remeasurement of retirement benefit schemes
Net movement of interest rate swaps cash flow hedge
Tax on above components of other comprehensive income
Total comprehensive loss
Transactions with owners recorded directly in equity
Share capital issued2
Share based payments
Movement in shares held by The Ram Brewery Trust II
At 29 March 2021
Total comprehensive income
Profit for the period3
Other comprehensive income
Unrealised gain on revaluation of property
Remeasurement of retirement benefit schemes
Net movement of interest rate swaps cash flow hedge
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
At 28 March 2022
Notes
Share
capital1
£m
13.6
Capital
redemption
reserve
£m
1.8
Hedging
reserve
£m
(4.4)
Revaluation
reserve
£m
239.2
Retained
earnings
£m
336.4
Total
equity
£m
586.6
–
–
–
–
–
–
–
1.3
–
–
1.3
14.9
–
–
–
–
–
–
–
0.1
–
–
–
0.1
15.0
19
28
26
14
32
19
28
26
14
16
32
–
–
–
–
–
–
–
–
–
–
–
1.8
–
–
–
–
–
–
–
–
–
–
–
–
1.8
–
–
(38.1)
(38.1)
–
–
2.5
(0.5)
2.0
2.0
–
–
–
–
(2.4)
9.0
–
–
(3.8)
5.2
5.2
–
–
–
–
244.4
–
0.9
–
(0.2)
0.7
(37.4)
83.6
(0.1)
0.2
83.7
382.7
9.0
0.9
2.5
(4.5)
7.9
(30.2)
84.9
(0.1)
0.2
85.0
641.4
–
–
34.4
34.4
–
–
5.2
(1.1)
4.1
4.1
–
–
–
–
–
1.7
28.7
–
–
(22.8)
5.9
5.9
–
–
(10.1)
–
(10.1)
240.2
–
17.2
–
(2.5)
14.7
49.1
–
(5.0)
10.1
0.1
5.2
437.0
28.7
17.2
5.2
(26.4)
24.7
59.1
0.1
(5.0)
–
0.1
(4.8)
695.7
1 Total share capital comprises the nominal value of the share capital issued and fully paid of £7.3 million (2021: £7.3 million) and the share premium account of £7.7 million (2021: £7.6 million).
Share capital issued in the period comprises the nominal value of £nil (2021: £1.2 million) and share premium of £0.1 million (2021: £0.1 million).
2 During the prior period the group raised equity, generating proceeds of £84.8 million, net of transaction costs. A cash box structure was used in such a way that merger relief was available under
Companies Act 2006, section 612, and thus no share premium was recorded. As the redemption of the cash box entity’s preference shares was in the form of cash, the transaction was treated as
qualifying consideration and the premium was therefore considered to be a realised profit.
3 The company’s profit after tax from continuing operations for the period was £24.9 million (2021: loss after tax of £37.6 million). The company’s profit after tax from discontinued operations was
£9.5 million (2021: loss after tax of £0.7 million).
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The notes on pages 96 to 140 form part of these financial statements.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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Financial Statements
Notes to the financial statements
For the 52 weeks ended 28 March 2022
1. General information
The group and parent company financial statements of Young & Co.’s Brewery, P.L.C. for the 52 week period ended 28 March 2022
were authorised for issue by the board of directors on 18 May 2022. 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 6 and in the strategic
report on pages 1 to 50.
The current period and prior period relate to the 52 weeks ended 28 March 2022 and the 52 weeks ended 29 March
2021 respectively.
The financial statements are presented in pounds sterling, which is the functional currency of the parent company, and all values are
rounded to the nearest hundred thousand (£0.1 million), except where otherwise indicated.
Going concern
At 28 March 2022, the group had cash in bank of £34.0 million and committed borrowing facilities of £235.0 million, of which
£135.0 million was drawn down. The group expects, by 27 June 2023 (the ‘going concern’ period), to have available facilities of
£235.0 million, with the plan to renegotiate the £30.0 million term loan that is due March 2023. In addition to these committed
facilities, we have a £10.0 million overdraft with HSBC, which is not committed, and is therefore not assumed to continue for the
purpose of this assessment.
Aligned to the government’s hospitality reopening plan, all the group’s pubs were operating under severe restrictions until 19 July
2021 when all restrictions were finally lifted. The group is very pleased with trading levels across the year and the quick return to
positive trading cash flow, including through the disrupted Omicron period. Cash reserves have been further supported during the
period through the sale of the Ram Pub Company for total cash proceeds of £53.0 million.
Whilst the group’s entire pub estate is trading well, it remains prudent to recognise a degree of uncertainty ahead due to any potential
ongoing impact of covid-19 and to acknowledge the impact of the current cost inflation that could influence future profitability.
The directors also acknowledge the current Russia/Ukraine situation and the potential indirect impact this could have on Young’s with
respect to any further increase in food and energy inflation, and possible reductions in consumer spending. At this point in time the
directors consider that the sales and inflation assumptions used in the going concern scenarios are appropriate.
As part of the directors’ consideration of the appropriateness of adopting the going concern basis, the group has modelled several
scenarios for the going concern period. The key judgements applied are the extent of any potential future disruption to trading as a
result of covid-19, and the inflationary cost pressures that the hospitality industry is currently facing. The base case model assumes we
continue to trade as now, no restrictions and a confident market with trade continuing to build in line with Young’s growth strategy.
The general reduction in trade scenario looks at a decline of 20% in sales and 24% in profit across the period. This aims to capture
the return of possible restrictions such as table service only, a recommendation to work from home, and any potential slowdown in
consumer spending influenced by the current cost of living crisis. The cost inflation scenario includes an average 15% increase in the
food cost base for the period with no retail price increases, utility pricing has been held at the base case rates given the group has
forward bought utilities to March 2024. We have assumed capital expenditure levels will continue at historical levels and no structural
changes to the business will be needed in any of the scenarios modelled.
In the base case; general reduction in trade; and cost inflation scenarios there continues to be significant headroom on our debt
facilities, and all banking covenants are fully complied with throughout the going concern period.
The reverse stress test focused on the decline in sales and profit that Young’s would be able to absorb before breaching any financial
covenants or indeed any liquidity issues (the former being the main stress point given the debt headroom). Such a scenario, and the
sequence of events that could lead to it, such as full closure of the pub estate for the summer and Christmas periods, is considered to
be remote. There would need to be a sales reduction of c.50% and profit reduction of c.60% between May 2022 and March 2023
compared to the base case, a reduction far in excess of those experienced historically (with the exception of the restricted covid-19
period), before there is a breach of financial covenants in the period and is calculated before reflecting any mitigating actions such as
reduced capital expenditure or suspension of dividends.
Young’s has also considered the impact of climate change on going concern and has determined that there is no impact on
the business during the going concern period. Aligned with our developing ESG strategy this will continue to feature in future
assessments, as we determine the potential wider impact on our asset base, capex spend and cost of compliance.
Based on these forecasts and sensitivities, coupled with the current debt levels and the ongoing debt structure in place, the board
has a reasonable expectation that the group is able to manage its business risks and to continue in operational existence until at least
27 June 2023. Accordingly, the board continues to adopt the going concern basis in preparing the consolidated financial statements.
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2. Basis of preparation
The consolidated financial statements, and the company financial statements, have been prepared in accordance with UK-adopted
international accounting standards and, as regards the parent company financial statements, as applied in accordance with the
provisions of the Companies Act 2006. The company has taken advantage of section 408 of the Companies Act 2006 not to present
the parent company profit and loss account.
IFRS, as applicable in the UK, 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 or statement of comprehensive income are presented for the company, as permitted by section 408(3)
of the Companies Act 2006.
In preparing the group financial statements, management have considered the impact of climate change, taking into account the
relevant disclosures in the strategic report. This included a review of both physical climate risks and transitional climate risks, taking into
regard recommendations issued by the Taskforce on Climate-related Financial Disclosures. In particular, assets with indefinite or long
lives were assessed for impairment by taking into account global warming. No issues were identified that would impact such assets
carrying values or have a material impact on the financial statements and is not expected to have a significant impact on the group’s
going concern assessment to May 2023 nor the next five years.
New Accounting Standards, Amendments and Interpretations
The group applied for the first-time certain standards and amendments. IFRS 5 has been applied due to the disposal of a major
part of the group’s operations during the period. Covid-19-Related Rent Concessions Beyond 20 June 2021 and the Interest Rate
Benchmark Reform (Phase 2) are new amendments which are effective in the current period. The group has not early adopted any
other standard, interpretation or amendment that has been issued but is not yet effective.
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Non-current Assets Held for Sale and Discontinued Operations – IFRS 5
In the current period, the group disposed of the majority of pubs previously traded under the Ram Pub Company segment, operating
as tenanted sites. These were disclosed separately in the segmental reporting note (see note 6). Management has concluded that the
sale meets the definition of a discontinued operation under IFRS 5.
A discontinued operation is a component of the entity that has been disposed of, or is classified as held for sale, and that represents
a separate major line of business and is part of a single coordinated plan to dispose of such a line of business. The results of
discontinued operations are presented separately in the income statement. The sale was completed in one transaction to one buyer
and all related assets and liabilities together met the definition of a disposal group.
As a result of the above, the financial statements for the period ended 28 March 2022 and prior comparative periods have been
restated in accordance with the standard to re-present discontinued operations in the income statement and instead display the impact
as a separate income statement line showing the post-tax profit of discontinued operations.
Further detailed analysis of that single amount into revenue, expenses and cash flows is disclosed in note 5.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable
to the liabilities of a disposal group classified as held for sale continue to be recognised.
In future periods, the group will no longer be disclosing the Ram Pub Company as a separate segment in the segmental reporting
note due to the majority of the Ram Pub Company pubs’ disposal. The segments that will be disclosed in future periods will be
Managed and Other, with any tenanted sites included in Other on account of their materiality.
Covid-19-Related Rent Concessions beyond 30 June 2021 – Amendment to IFRS 16
In the prior period, amendments were made to IFRS 16 (Leases) to provide relief to lessees from applying the IFRS 16 guidance on
lease modification accounting for rent concessions arising as a direct consequence of the covid-19 pandemic. As a practical expedient,
the group elected not to assess whether covid-19-related rent concessions from a lessor were a lease modification. A lessee that makes
this election accounts for any change in lease payments resulting from the covid-19-related rent concession in the same way that it
would account for the change under IFRS 16, if the change were not a lease modification.
The amendment was initially intended to apply until 30 June 2021, but as the impact of the covid-19 pandemic continued, the
practical expedient has been extended to the 30 June 2022. This resulted in the practical expedient being applied to six property
leases which were granted lease concessions during the period due to covid-19.
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97
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
2. Basis of preparation continued
Adoption of the amendment has been applied retrospectively and had no material impact on opening retained earnings, the opening
lease liabilities or the opening right-of-use assets due to the timing of the rent concessions. Rent concessions were treated as a
contingency that fixed previously variable lease payments. In such cases, the lease liabilities were remeasured, using the remeasured
consideration, with a corresponding adjustment to the right-of-use assets.
Interest Rate Benchmark Reform – Phase 2 – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
The amendment provides temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is
replaced with an alternative nearly risk-free interest rate (RFR). In the case of the group, London Interbank Offered Rate (LIBOR) based
interest rates have been fully replaced by Sterling Overnight Index Average (SONIA) during the period. The amendment includes the
following practical expedients which the group has taken advantage of on transition:
• A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated
as changes to a floating interest rate, equivalent to a movement in a market rate of interest on the basis that the change was a
direct consequence of the reform and that contractual cash flows are economically equivalent to the previous basis preceding
the change;
• Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging
relationship being discontinued;
• Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is
designated as a hedge of a risk component.
These amendments did not have a material impact on the group.
Other standards
The directors will adopt the following Standards, Amendments and Interpretations listed below in the first full financial period following
their effective date. The directors do not expect that adoption in future periods will have a material impact:
New Standard
Amendments to IAS 16
Amendments to IAS 37
Amendments to IAS 1
Amendments to IAS 8
Amendments to IAS 12
Accounting Standard
Property, Plant and Equipment: Proceeds before
Intended Use
Onerous Contracts – Costs of Fulfilling a Contract
Classification of Liabilities as Current or Non-current
Definition of Accounting Estimates
Deferred Tax related to Assets and Liabilities arising
from a Single Transaction
Effective date
1 January 2022
1 January 2022
1 January 2023
1 January 2023
1 January 2023
3. Summary of significant accounting policies
The significant accounting policies adopted are set out below and 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 the Ram Brewery Trust II; the trust holds assets for the benefit of employees and
former employees, is an ESOP trust and is consolidated in the group and treated as an extension of the company in the parent
company accounts.
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 cost less provision
for impairment. Income is recognised from these investments in relation to distributions received.
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(c) Revenue recognition
Revenue is measured at the transaction price when control passes to the customer in respect of goods and services provided, net of
discounts and VAT. The recognition of revenue under each of the group’s material revenue streams is as follows:
Sale of goods
Revenue is recognised at a point in time when control of the goods or services is transferred to the customer.
Accommodation sales
Revenue is recognised on a straight-line basis over the duration of the room occupation.
Rental income
Rental income arising from operating leases on properties is accounted for on a straight-line basis over the lease term. As a result of
covid-19, various rental concessions were granted to lessees. Where a rent concession was granted, the remaining consideration was
spread over the remaining lease term. Rental income does not fall within the scope of IFRS 15.
(d) Adjusting items
Adjusting items are separately disclosed in order to draw them to the attention of the reader of the financial statements. This is due
either to their material and non-recurring nature or that, in management’s judgement, they are required to be disclosed separately in
order to present the underlying 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. The tax treatment for adjusting items is consistent with tax treatment for non-adjusting items.
(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 the 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 adjusting items.
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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
Freehold properties, including land and buildings, 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.
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 adjusting
expense. At the date of revaluation, any accumulated depreciation is eliminated to the extent of the difference between the revalued
amount and the carrying value of the asset immediately before valuation.
Leasehold improvements and fixtures, fittings and equipment within those sites are measured at cost on recognition, and are stated as
such less any accumulated depreciation.
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 or the residual value of its freehold buildings.
Useful lives:
Freehold buildings
Leasehold improvements
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 (see note 3(h)).
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. Property and equipment are treated as disposals in the period of their
write-down.
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99
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
3. Summary of significant accounting policies continued
(g) Asset held for sale and discontinued operations
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a
sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their
carrying amount and fair value less costs to sell.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is
recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss
previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the
date of derecognition.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Assets and liabilities classified as held for
sale are presented separately as current items in the statement of financial position.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss
after tax from discontinued operations in the income statement.
Additional disclosures relating to discontinued operations are provided in note 5. All other notes to the financial statements include
amounts for continuing operations, unless indicated otherwise.
(h) Impairment of assets
The carrying values of investments, property and equipment and right-of-use assets are reviewed for impairment if events or changes
in circumstances indicate the carrying value may not be recoverable. Goodwill is mandatorily assessed for impairment on an annual
basis or more frequently if there are indications that the carrying value may be impaired.
Impairment is assessed on the basis of either each individual asset or each individual cash generating unit (an individual pub), or, in the
case of goodwill, the group of cash generating units associated with it. For the purpose of impairment testing, goodwill acquired in a
business combination is, from the acquisition date, allocated to each of the group’s cash generating units (or groups of cash generating
units) that are expected to benefit from the combination.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less cost of disposal 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 that reflects current market assessments of the time value of money and the risks specific to the asset.
The value in use calculations are based on the most recent budget and forecast calculations, which are prepared separately for each
CGU to which the individual assets are allocated. The value in use calculations generally cover a period of five years, after which a
long-term growth rate is applied to project future cash flows.
The impact of climate change has been considered as part of the impairment assessment, including both physical and transitional
risks. Due to the nature of the group’s operations, climate risk is not considered to have a material impact on any CGU’s value in use
calculation and is therefore not expected to result in any impairment.
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.
(i) Right-of-use assets
The group recognises right-of-use assets at the commencement date of a new lease. Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of a right-of-use
asset includes the amount of lease liabilities recognised, initial direct costs incurred, including lease premiums to take on a lease, and
lease payments made at or before the commencement date less any lease incentives received, unless the group is reasonably certain
to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use asset is depreciated on a straight-line
basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to the group’s accounting policy
for impairment.
(j) Leases
At inception of a contract, the group considers whether the contract is, or contains, a lease. A contract is, or contains a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
100 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
(1) Where the group is the lessee
At the commencement date of a new lease, the group recognises a lease liability measured at the present value of lease payments to
be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments
that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also
include payments of penalties for terminating a lease or payments for exercising an extension option, if the lease term reflects the
group exercising the option to terminate or extend the lease. The variable lease payments that do not depend on an index or a rate
are recognised as an expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the group uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a change in the amounts expected to be payable under a residual value guarantee, a change in
variable lease payments based on an index or a rate, a modification that is not accounted for as a separate lease, a change in the lease
term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
The group has taken the recognition exemption for short-term leases and low-value leases. Expenses from such leases have been
recognised in the income statement on a straight-line basis over the lease term.
The group has applied the practical expedient available in assessing whether covid-related rent concessions were a lease modification.
(2) Where the group is the lessor
Assets leased out under operating leases are included within property and equipment and are 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. As a result of
covid-19 various rent concessions have been granted to lessees. Rent concessions granted to tenants are treated as variable rent
payments, under which the variable element of rent is taken directly to the profit and loss statement in the period that it relates to.
(k) 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.
(l) Cash
Cash in the balance sheet comprises cash at banks, cash in transit due from credit card providers and cash 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.
(m) 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.
(n) 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.
Expected credit losses are recognised from initial recognition based on the group’s historical credit loss experience, factors specific for
each loan, the current economic climate and expected changes in forecasts of future events. Changes in expected credit losses are
recognised in the income statement.
(o) 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.
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101
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
3. Summary of significant accounting policies continued
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.
Deferred tax relating to items recognised outside the profit and loss is recognised either in other comprehensive income or directly in
equity. Deferred tax on those items is recognised consistently with the underlying transaction.
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.
(p) Accounting for the ESOP Trust
The capital gains tax liability that may arise on the notionally allocated shares in the Ram Brewery Trust II when they are transferred to
employees is recognised as a provision in the financial statements under trade and other payables.
(q) 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.
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
immediately expensed. If the related transaction is not expected to occur, the amount held in equity is immediately expensed.
In the current period, there has been a reform to update the benchmark interest rates across both borrowings and derivatives from
LIBOR to SONIA. The group has taken advantage of practical expedients available for the transition period as discussed in note 2.
(r) 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 the 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 relate.
102 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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.
(s) Trade and other receivables
Trade receivables are initially recognised at the transaction price less impairment as they do not contain a significant financial
component. In measuring and recognising the impairment, the group has applied the simplified approach to expected credit losses.
Expected credit losses are recognised from initial recognition based on the group’s historical credit loss experience, factors specific for
each receivable, the current economic climate and expected changes in forecasts of future events. Changes in expected credit losses
are recognised in the income statement.
(t) Share based payments
The group operates two types of share based payment arrangements: a director/senior management employee deferred bonus
scheme (‘DAB’) and a Save-As-You-Earn (‘SAYE’) scheme.
Under the DAB, directors and senior management are encouraged to receive bonus payments in the form of shares instead of cash.
They are encouraged to do this by being offered ‘matching’ shares (see note 32). The ‘matching’ shares constitute shares with non-
market performance based vesting conditions over three years. The group has used the ‘grant date model’ as its valuation model for
recording the fair value of these equity instruments at the date when they were originally granted. The fair value of equity represents
the market value of the shares at grant date, less the nominal value which the employees will pay.
Under the SAYE scheme, eligible employees are encouraged to save over a set period and then, if they choose, purchase shares at
the price set before the start of that period (see note 32). The group uses the ‘Black-Scholes model’ as its valuation model for valuing
awards at fair value.
The fair value cost of both schemes is expensed to the income statement with a corresponding credit in equity on a straight-line
basis over the vesting period. The cumulative expense also takes account of the group’s estimate of the number of shares that will
ultimately vest.
(u) 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.
(v) Supplier income
The group earns supplier income through purchase volume-related discounts and stocking incentives. Most of the supplier income
received relates to volume discounts and is driven by the number of units purchased from suppliers. The volume discounts relate to
adjustments to a gross purchase price, and as such are recognised on an accrual basis at the point of purchase. Stocking incentives
are earned through a fixed payment in return for fulfilling certain stocking obligations, including number of stockists. Supplier income
is recognised when the group has met all obligations conditional for earning the income and it is recognised as a credit within cost
of sales.
Outstanding amounts due from suppliers for earned income at the period end are recognised within trade receivables, except in cases
where the group has rights of set-off and intends to offset these against trade payables to suppliers.
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103
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
3. Summary of significant accounting policies continued
(w) Government grants and assistance
Government grants represent monetary resources transferred to the group by the Government, government agencies or similar
bodies. These are recognised at fair value when the group has reasonable assurance that it will comply with any conditions attached to
the grant and that the grant will be received. Government grants are recognised in the income statement, on a systematic basis, over
the same period during which the expenses, for which the grant was intended to compensate, are recognised.
Government assistance represents monetary and non-monetary resources received from government agencies or similar bodies.
Where monetary assistance has been received the benefit has been recorded against the associated expense at the time the assistance
was received. See note 10.
Government grants
Coronavirus Job Retention Scheme (‘CJRS’)
Under this scheme, HMRC reimbursed up to 80% of the wages of certain employees who were furloughed up to a maximum of
£2,500 per employee per month. The scheme was designed to compensate for staff costs, so amounts received were recognised in
the income statement over the same period as the costs to which they relate. The CJRS scheme was utilised in both the current period
and the prior period, with amounts received recognised within operating costs in the income statement.
Eat Out to Help Out
In the prior period, from 3 August 2020 to 31 August 2020, HMRC offered a 50% discount on food and non-alcoholic drinks,
capped to £10 per person, when dining out between Monday and Wednesday. The group took advantage of this scheme. In the
prior period income statement, revenue included amounts reimbursed from HMRC in respect of the scheme.
Government grant income
In the prior period, sites with a rateable value between £15,000 and £51,000 were eligible for a £25,000 grant with no further
qualifying conditions. The business also received support from the various local restriction support grants administered by local
councils in response to the various restrictions placed on trading between November 2020 and March 2022. In the current period,
this included Restart Grants available from April 2021 and Omicron Hospitality & Leisure Grants in December 2021. Income relating
to the various grants was recognised in other income in the prior period income statement.
Covid Corporate Financing Facility (‘CCFF’)
In the prior period, the group took advantage of 364-day commercial paper issued to the Bank of England at a favourable yield
which was deemed to constitute a government grant. The debt was recognised within current borrowings on the balance sheet at
fair value, with the grant element, reflecting the favourable yield, recognised as deferred income within trade and other payables.
On amortisation, the grant element was recognised within finance costs, consistent with where the cost is recognised, as the group’s
policy is to present the income as a deduction from the related expense. The commercial paper was fully repaid in the current period.
Government assistance
Business rates relief
In the prior period, businesses in the retail, hospitality and leisure sectors in England were exempt from business rates for the 2020
to 2021 tax year. No business rate charge was therefore recognised in the income statement for the period ending 29 March 2021.
In the current period, the business rates exemption was extended to 30 June 2021. This was then followed by 66% business rates
relief for the period 1 July 2021 to 31 March 2022, capped at £2.0 million.
Deferred VAT payments
In the prior period, eligible businesses were able to defer VAT payments due between 20 March 2020 and 30 June 2020. The VAT
deferred became due for payment by 31 March 2021.
4. Key accounting estimates and judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts of assets, liabilities, income and expenses.
In the current period, covid-19 continued to have an impact on trading performance. Accordingly, this has had an impact upon
the key estimates, judgements and assumptions used in the period to which the management have considered when determining
the impact upon the valuation of property and equipment, carrying value of goodwill, pension obligations and cash flow forecasts,
including those used in the going concern model.
104 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
In applying the group’s accounting policies, the following estimates are considered to carry the most significant risk of resulting in a
material adjustment to the reported amount in the next financial year if the actual outcome differs from these estimates:
(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 notes
15 and 19.
(b) Carrying value of goodwill
The group considers annually whether goodwill has suffered any impairment in accordance with the accounting policy set out in note
3(h). The recoverable amounts for 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, climate change assumptions and pre-tax
discount rates. See notes 3(h) and 18.
(c) Defined benefit pension and health care scheme obligations
Measurement of defined benefit pension and health care scheme 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(r) and 28.
The critical judgements considered to carry the most significant risk of a material adjustment to the reported amount if the actual
outcome differs from these judgements are as follows:
(d) Business combinations
When assets are acquired, management determines whether the assets form a business combination. Business combinations must
involve the acquisition of a business, which generally have three elements: inputs, process, and output.
A fair value exercise of both the consideration paid 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
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), 15, 18 and 19.
(e) 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 tax authority will not accept a tax treatment in a previously filed or future tax return. Tax benefits are not recognised
unless it is probable that they will be recovered. Calculating the group’s tax provisions requires judgements to be made based on past
experience and the current tax environment. See notes 3(o), 14 and 27.
(f) Leases
IFRS 16 defines the lease term as the non-cancellable period of a lease together with the options to extend or terminate a lease, if the
lessee were reasonably certain to exercise that option. Where a lease includes the option for the group to terminate the lease term, the
group makes a judgement as to whether it is reasonably certain that the option will be taken. This will take into account the length of
time remaining before the option is exercisable, current trading, future trading forecasts as to the ongoing profitability of the asset and
the level and type of planned future capital investment. The group has reviewed long leaseholds and made a judgement to classify
these as right-of-use assets on the basis that none of the leases convey a right or option to purchase at the lease end date and hence
control of the building would never pass to the group, only the right to use it. See note 30.
i
F
n
a
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i
a
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S
t
a
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e
m
e
n
t
s
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
105
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
5. Discontinued operations
On 2 July 2021, the board made the decision to sell most of its tenanted estate, the Ram Pub Company. At this date, 56 of the 63
pubs in Ram Pub Company were classified as a disposal group held for sale and as a discontinued operation. On 9 August 2021, the
sites were disposed of for a total consideration of £53.0 million. The sale was consistent with the group’s strategy to increase value for
shareholders through focussing solely on operating premium, individual, differentiated and predominantly freehold managed pubs
and hotels.
Total revenue generated from the Ram Pub Company in the period was £3.6 million, of which £1.0 million related to continuing
operations and the remaining £2.6 million related to discontinued operations. The results from discontinued operations for the period
are presented below:
Revenue from sales of goods
Rental income
Total revenue
Operating costs
Adjusted operating profit/(loss)
Adjusting items1
Profit/(loss) before tax from discontinued operations
Income tax expense
Profit/(loss) after tax from discontinued operations
2022
£m
2.1
0.5
2.6
(1.8)
0.8
9.0
9.8
(0.3)
9.5
2021
£m
2.0
0.6
2.6
(3.5)
(0.9)
0.2
(0.7)
–
(0.7)
1 Adjusting items related to the difference between cash less disposal costs received from the sale of the 56 sites and the carrying value of their assets, at the date of disposal. During the previous 52
week period to 29 March 2021, the adjusting items related to the net upward movement on the revaluation of properties in excess of amounts recognised in equity. See note 11.
The major class of asset disposed of as part of the discontinued operations was property and equipment with a fair value of
£43.4 million. Deferred tax liabilities of £1.5 million were also de-recognised. No other assets or liabilities were disposed of as part of
the disposal group. A realised property gain in the revaluation reserve of £8.9 million was transferred to retained earnings on disposal.
The net cash flows incurred in respect of the discontinued operations were as follows:
Operating
Investing
Financing
Net cash inflow/(outflow)
2022
£m
0.1
52.5
(0.1)
52.5
2021
£m
(5.0)
(0.7)
(0.2)
(5.9)
For basic, diluted and the effect of adjusting items on earnings/(loss) per share on discontinued operations see note 17(c).
For tax charged on discontinued operations see note 14.
6. 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 adjusting items for the purpose of deciding on the allocation of resources and assessing performance.
The group historically has two operating segments: managed houses and tenanted houses. The managed house segment operates
pubs. Revenue is derived from sales of drink, food and accommodation. The tenanted house segment consists of pubs owned or
leased by the company and leased or subleased to third parties. Revenue is derived from rents payable by, and sales of drink made
to, tenants. Unallocated relates to head office income and costs, and unlicensed properties. During the period, most of the pubs within
the tenanted house segment have been disposed of and classified as a discontinued operation. Segmental reporting is in respect of
continuing operations only. For discontinued operations see note 5.
106 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
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
2022
Sales of goods
Accommodation sales
Total revenue from contracts with customers from
continuing operations
Rental income
Total revenue recognised from continuing operations
Adjusted operating profit/(loss) from
continuing operations
Adjusting items
Operating profit/(loss) from continuing operations
Restated 2021
Sales of goods
Accommodation sales
Total revenue from contracts with customers from
continuing operations
Rental income
Total revenue recognised from continuing operations
Adjusted operating loss from continuing operations
Adjusting items
Operating loss from continuing operations
Managed
houses
£m
295.4
12.3
307.7
–
307.7
72.1
(0.4)
71.7
84.5
2.5
87.0
–
87.0
(18.6)
(0.6)
(19.2)
Tenanted
houses
£m
0.5
–
0.5
0.5
1.0
0.4
2.2
2.6
0.3
–
0.3
0.4
0.7
–
(0.2)
(0.2)
Segments
total
£m
295.9
12.3
308.2
0.5
308.7
72.5
1.8
74.3
84.8
2.5
87.3
0.4
87.7
(18.6)
(0.8)
(19.4)
£0.3 million of unallocated income (2021: £0.3 million) is rental income derived from unlicensed properties.
The following is a reconciliation of the operating profit to the profit before tax for continuing operations:
Operating profit/(loss) from continuing operations
Finance costs
Finance charge for pension obligations
Profit/(loss) before tax from continuing operations
Balance sheet
2022
Segment assets
Deferred tax assets
Cash
Total assets from continuing operations
Other segmental information from continuing
operations
Depreciation of property, equipment and right-of-use
assets (note 19, note 20)
Additions to non-current assets1
Net movements in property valuation through income
statement (note 11, note 19)
Managed
houses
£m
975.8
–
–
975.8
(30.1)
69.0
2.3
Tenanted
houses
£m
8.9
–
–
8.9
Segments
total
£m
984.7
–
–
984.7
(0.1)
–
–
(30.2)
69.0
2.3
(0.8)
5.4
(1.5)
(31.0)
74.4
0.8
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
107
i
F
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a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Unallocated
£m
–
–
–
0.3
0.3
(21.1)
(1.5)
(22.6)
–
–
–
0.3
0.3
(14.6)
(0.5)
(15.1)
2022
52 weeks
£m
51.7
(9.5)
(0.1)
42.1
Unallocated
£m
39.1
4.1
34.0
77.2
Total
£m
295.9
12.3
308.2
0.8
309.0
51.4
0.3
51.7
84.8
2.5
87.3
0.7
88.0
(33.2)
(1.3)
(34.5)
Restated
2021
52 weeks
£m
(34.5)
(9.8)
(0.2)
(44.5)
Total
£m
1,023.8
4.1
34.0
1,061.9
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
6. Segmental reporting continued
2021
Segment assets
Deferred tax assets
Cash
Asset held for sale
Total assets from continuing operations
Other segmental information from continuing operations
Depreciation of property, equipment and right-of-use
assets (note 19, note 20)
Additions to non-current assets1
Net movements in property valuation through income
statement (note 11, note 19)
Managed
houses
£m
898.7
–
–
–
898.7
(30.4)
19.3
0.9
Tenanted
houses
£m
61.8
–
–
1.2
63.0
(2.2)
0.7
0.9
Segments
total
£m
960.5
–
–
1.2
961.7
(32.6)
20.0
1.8
Unallocated
£m
22.5
8.6
4.7
–
35.8
(1.1)
1.3
–
1 Non-current assets for this purpose consist of property and equipment, right-of-use assets and intangible assets.
7. Revenue
The recognition of revenue from continuing operations under each of the group’s material revenue streams is as follows:
Sales of goods
Accommodation sales
Total revenue from contracts with customers
Rental income
Total revenue recognised
8. Operating costs before adjusting items
The table below shows operating costs before adjusting items from continuing operations:
Changes in inventories of finished goods and raw materials
Raw materials, consumables and finished goods used
Employment costs (note 9(a))
Depreciation of properties (note 19)
Depreciation of right-of-use assets (note 20)
Expense relating to short-term, low value or variable rent payments (note 30)
Other operating costs1
2022
£m
295.9
12.3
308.2
0.8
309.0
2022
£m
(2.1)
65.4
115.0
24.0
7.0
0.7
52.6
262.6
Total
£m
983.0
8.6
4.7
1.2
997.5
(33.7)
21.3
1.8
Restated
2021
£m
84.9
2.5
87.4
0.6
88.0
Restated
2021
£m
0.7
19.2
92.1
24.4
7.4
0.2
(18.1)
125.9
Auditor’s remuneration in respect of audit of the group financial statements
0.4
0.3
1 Credits of £2.2 million (2021: £43.3 million) in respect of the Coronavirus Job Retention Scheme (‘CJRS’) have been recognised within other operating costs, as permitted by IAS 20.
108 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
9. Employment
(a) Costs and employee numbers
Wages and salaries
Social security
Pension and health care schemes
Employment costs
Group
2022
£m
104.8
8.0
2.2
115.0
2021
£m
84.2
6.2
1.7
92.1
Company
2022
£m
104.8
7.9
2.2
114.9
2021
£m
82.8
6.2
1.7
90.7
The group’s and the company’s average monthly number of employees was 4,850 (2021 group and company: 4,714 and 4,600
respectively). The group’s and the company’s number of employees at the period end was 5,275 (2021 group and company: 4,185).
The group’s and the company’s average monthly number of operational employees was 4,737 (2021 group and company: 4,590
and 4,476 respectively). The group’s and the company’s number of operational employees at the period end was 5,156 (2021 group
and company: 4,071).
The group’s and the company’s average monthly number of administration employees was 113 (2021 group and company: 123).
The group’s and the company’s number of administration employees at the period end was 119 (2021 group and company: 114).
(b) Directors’ emoluments
Stephen Goodyear
Patrick Dardis
Mike Owen
Simon Dodd
Tracy Dodd
Nick Miller
Ian McHoul
Torquil Sligo-Young4
Aisling Meany5
Roger Lambert6
Trish Corzine7
Total
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Basic
salary
and fees1
2022
£000
97
466
309
236
223
48
48
49
25
14
–
1,515
Basic
salary
and fees1
2021
£000
92
435
289
220
213
40
40
105
–
40
31
1,505
Benefits2
2022
£000
–
2
2
17
2
–
–
8
–
–
–
31
Benefits2
2021
£000
–
2
2
17
2
–
–
16
–
–
–
39
Bonus3
2022
£000
–
670
436
287
262
–
–
–
–
–
–
1,655
Total
excluding
pension
costs
2022
£000
97
1,138
747
540
487
48
48
57
25
14
–
3,201
Total
excluding
pension
costs
2021
£000
92
437
291
237
215
40
40
121
–
40
31
1,544
Bonus3
2021
£000
–
–
–
–
–
–
–
–
–
–
–
–
1 Certain car-related benefits can be taken as benefits in kind, in cash or as a combination of the two. Where any cash is taken, that sum is included with the amounts shown in the ‘Basic salary and
fees’ columns.
2 These relate to cars and/or private medical insurance.
3 For 2022, the remuneration committee determined that performance-related bonuses were payable, at 100% of maximum, to the executive directors pursuant to the bonus award letters issued
in respect of FY2021/22. The remuneration committee further determined that a discretionary ex-gratia bonus of 25% of basic salary was payable to the executive directors in December 2021.
For 2021, the remuneration committee determined that no performance-related bonuses were payable to the executive directors pursuant to the bonus award letters issued in respect of FY2020/21.
4 Torquil Sligo-Young stepped down as an executive director on 30 September 2020 and became a non-executive director. Included within the amount shown in the ‘Benefits 2021’ column is a cash
contribution paid towards private medical insurance. Note 9(e) on page 110 sets out the gains made on the exercise of share options.
5 Aisling Meany was appointed to the board on 1 September 2021.
6 Roger Lambert stepped down from the board on 31 July 2021.
7 Trish Corzine stepped down from the board on 11 January 2021.
(c) Retirement benefits
Defined benefit pension scheme
The company operates a defined benefit pension scheme: the Young & Co.’s Brewery, P.L.C. Pension Scheme. All active members
contribute to it and continue to accrue benefits; during the period, those contributions were, on average, at a rate between 8% and
11% of pensionable earnings, dependent on each member’s accrual rate. The scheme invests largely in managed funds and liability
driven investments such as gifts. The company accounts for retirement benefits in accordance with IAS 19; detailed disclosures
covering this are set out in note 28. No director was accruing any defined benefit under the scheme as at 28 March 2022. Further, no
director accrued any defined benefit under the scheme during the period. Stephen Goodyear, Patrick Dardis and Torquil Sligo-Young
are pensioner members of the scheme.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
109
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
9. Employment continued
Defined contribution pension scheme
The company operates a defined contribution pension scheme. As at 28 March 2022, Mike Owen, Simon Dodd and Tracy Dodd
were members of the scheme and accruing retirement benefits under it. For the period, the company paid the following contributions
into the scheme for them in respect of their qualifying services, being an amount equal to not more than 6% of their pensionable
earnings, up to a pensionable earnings cap of £172,800: for Mike Owen – £7,820 (2021: £8,817), for Simon Dodd – £9,972
(2021: £9,972) and for Tracy Dodd – £9,972 (2021: £9,972). The company contribution rates for these three individuals are aligned
with the contribution rates for staff at Copper House (and certain others) who are members of the scheme.
Post-retirement health care
The company bears the cost of post-retirement health care premia for certain employees and ex-employees (see note 28).
(d) Profit sharing scheme
This scheme, which involved an annual profit share allocation, was closed some time ago. As a result, it has effectively been in ‘run-off’,
with periodic releases of accrued entitlements, represented by A shares, happening as and when a member reaches their normal
retirement date. Several years ago, it was agreed with HM Revenue & Customs that all accrued entitlements could be released free
of tax, even where an individual had not reached their retirement date. No A shares were released to scheme members during
the period (2021: nil). As at 28 March 2022, an accrued entitlement effectively remained in respect of 712 A shares (2021: 712
A shares).
(e) Savings-related share option scheme
The company operates a savings-related share option scheme. Ordinarily, 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 agree to save a fixed monthly
amount with a savings institution through deductions from net salary, generally 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. In the period, options over 130,746 A shares were granted under the scheme at an
exercise price of 1,176 pence per share. The options will generally be exercisable between 1 February 2025 and 31 July 2025.
Due to the impact of covid-19 and the disproportionate impact of furlough on a significant proportion of the group’s employees,
no invitations to join the scheme were sent out in the prior period.
Of the directors who served throughout or during the period, only the following have an entitlement to A shares under the scheme:
Torquil Sligo-Young
Tracy Dodd
Simon Dodd
Michael Owen
Torquil Sligo-Young
Tracy Dodd
At 29
March
2021
659
–
–
–
At 30
March
2020
659
1,013
Granted
–
1,071
1,530
1,530
Granted
–
–
Exercised
659
–
–
–
Exercised
–
–
Lapsed
–
–
–
–
Lapsed
–
1,013
At 28
March
2022
–
1,071
1,530
1,530
At 29
March
2021
659
–
Exercise price
(pence per
share)1
Ordinarily
exercisable
from
Ordinarily
exercisable
to
1,364 01.09.21 28.02.22
1,176 01.02.25 31.07.25
1,176 01.02.25 31.07.25
1,176 01.02.25 31.07.25
Gains made
on exercise of
share options
(£)2
830
–
–
–
1,364 01.09.21 28.02.22
1,066 01.09.20 28.02.21
–
–
1 The exercise prices of 1,364p and 1,176p per share represent a discount of not more than 20% to the market price of an A share at the time the relevant invitations to join the scheme were issued,
being 1,705p per share and 1,470p per share, respectively.
2 The gain made on the exercise of a share option is calculated by taking the difference between the exercise price and the opening market price of an A share on the day the option is exercised, and
then multiplying that by the number of A shares in respect of which the option is exercised.
10. Government grants and assistance
During the current period, the group was eligible for a number of government grant schemes which were introduced to mitigate the
impact of covid-19. The impact of each scheme on the income statement for the period ended 28 March 2022 was as follows:
Government grant scheme
Eat Out to Help Out
Government grant income
Coronavirus Job Retention Scheme ('CJRS')
Covid Corporate Financing Facility ('CCFF')
Total government grants received
110 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Income statement line impacted
Revenue
Other income
Operating costs before adjusting items
Finance costs
2022
£m
–
5.0
2.2
–
7.2
2021
£m
2.4
4.7
43.3
0.1
50.5
All government grants received were in respect of continuing operations.
At 29 March 2021, £29.8 million was recognised within current borrowings in the balance sheet, representing the fair value of
the Covid Corporate Financing Facility, with a further £0.2 million recognised within trade and other payables as deferred income,
representing the favourable conditions granted by the Government. The CCFF was repaid in full in May 2021.
In respect of the Coronavirus Job Retention Scheme, £nil remained outstanding at 28 March 2022 (2021: £4.6 million). In respect
of government grant income, £0.1 million remained outstanding at 28 March 2022 (2021: £1.3 million). Both these amounts have
been recognised within trade and other receivables.
In addition, during the period, the group continued to take advantage of the business rate holiday, saving £3.7 million
(2021: £15.6 million), further business rate relief under the expanded retail discount, saving £2.0 million (2021: £0.7 million) and
reduced 5% VAT on eligible sales until 30 September 2021, followed by 12.5% VAT up until the year end date of 28 March 2022.
The reduced rate subsequently ended on the 31 March 2022. See note 3(w) for further information.
Cash flows from grants received during the financial year are included in cash flow from operations.
11. Adjusting items
The table below shows adjusting items from continuing operations. For discontinued operations see note 5.
During the period the cash flow impact of adjusting items was £3.8 million (2021: £2.0 million).
Amounts included in operating profit:
Upward movement on the revaluation of properties (note 19)1
Downward movement on the revaluation of properties (note 19)1
Purchase costs2
Net profit/(loss) on disposal of properties3
Tenant compensation4
Group reorganisation5
Covid restructuring6
Tax on adjusting items:
Tax attributable to adjusting items
Impact of change in corporation tax rate7
Total adjusting items after tax
2022
£m
5.5
(4.7)
(2.7)
2.4
(0.2)
–
–
0.3
(0.6)
(6.9)
(7.5)
(7.2)
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
2021
£m
2.9
(1.3)
–
(0.5)
(0.5)
(1.4)
(0.5)
(1.3)
0.2
–
0.2
(1.1)
1 The movement on the revaluation of properties is a non-cash item that relates to the revaluation exercise that was completed at the period end date. The revaluation was conducted at an individual
pub level and identified an upward movement of £5.5 million (2021: £2.9 million) representing reversals of previous impairments recognised in the income statement, and a downward movement
of £4.7 million (2021: £1.3 million), representing downward movements in excess of amounts recognised in equity. These resulted in a net upward movement of £0.8 million (2021: an upward
movement of £1.6 million) which has been recognised in the income statement. The upward movement for the period ended 28 March 2022 was split between land and buildings of £0.8 million
(2021: £1.6 million upward) and fixtures and fittings of £nil (2021: £nil). See note 6 for segmental information and note 19 for information on the revaluation of properties.
2 Costs related to the purchase of the Bull (Ditchling), Pheasant Inn (Lambourn), the White Horse (Hascombe), the freehold of the Lamb (Bloomsbury) and the Lucky Onion group, a group of six sites
acquired on 21 February 2022, and lease extensions of the Cherry Tree (Dulwich), East Hill (Wandsworth) and Riverside House (Wandsworth). These included legal and professional fees and stamp
duty land tax (see note 14).
3 The profit on disposal of properties related to the difference between cash, less disposal costs, received from the sale of the Grove House (Camberwell) and Lord Wargrave (Marylebone) and the
carrying value of their assets, including goodwill, at the dates of disposal, and the surrender premium related to the lease of Prince William Henry (Southwark). In the prior period, the carrying value
of the Grove House was previously derecognised from property and equipment and instead classified as an asset held for sale. Proceeds of £1.2 million were recognised in respect of the sale of the
Grove House in the current period. During the prior period the loss on disposal of properties related to the difference between cash, less disposal costs, received from the sale of the Horse Pond Inn
(Castle Cary), the lease expiry of the Black Cat (Catford), Surprise (Chelsea) and the Greyhound (Hendon) and the carrying value of their assets, including goodwill, at the dates of disposal.
4 Tenant compensation of £0.2 million was paid to previous tenants of the Grand Junction Arms (Harlesden) to terminate their lease agreement early. During the prior period, tenant compensation of
£0.5 million was paid to previous tenants of the Royal Oak (Bethnal Green) and an unlicensed property (Wandsworth) to terminate their lease agreements early.
5 During the prior period the group reorganisation costs of £1.4 million related to the stamp duty land tax and associated legal and professional fees incurred on the transfer of the business and assets
of Spring Pub Company Limited, a group of five sites acquired on 12 March 2020, to Young’s. The cost was foreseen at the time of the acquisition in March 2020, but did not crystalise until the
transfer happened in September 2020.
6 During the prior period covid restructuring costs of £0.5 million related to a reorganisation of the group’s head office functions. These were largely made up of severance costs.
7 An increase in the corporation tax rate from 19% to 25%, with effect from 1 April 2023, was announced in the March 2021 Budget, and substantively enacted on 24 May 2021. This has resulted
in an increase in the deferred tax liabilities and assets of the group, to the extent they are not expected to reverse prior to 1 April 2023, with a net charge of £6.9 million associated with the rate
change. This has been recognised as an exceptional item in the tax charge for the period as it is unrelated to the underlying trading activities of the group.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
111
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
12. Other financial measures
The table below shows how adjusted group EBITDA, operating profit and profit before tax have been arrived at. They exclude
adjusting items which due to their material or non-recurring nature distort the group’s performance. These alternative performance
measures have been provided to help investors assess the group’s underlying performance. Details of the adjusting items can be
seen in note 11.
All the results below are from continuing operations.
EBITDA
Depreciation and net movement on the
revaluation of properties
Operating profit/(loss)
Net finance costs
Finance charge for pension obligations
Profit/(loss) before tax
Unadjusted
£m
82.0
(30.3)
51.7
(9.5)
(0.1)
42.1
2022
Adjusting
items
£m
0.5
(0.8)
(0.3)
–
–
(0.3)
Adjusted
£m
82.5
Unadjusted
£m
(4.2)
(31.1)
51.4
(9.5)
(0.1)
41.8
(30.3)
(34.5)
(9.8)
(0.2)
(44.5)
Restated
2021
Adjusting
items
£m
2.9
(1.6)
1.3
–
–
1.3
Adjusted
£m
(1.3)
(31.9)
(33.2)
(9.8)
(0.2)
(43.2)
During the period, £102.2 million (2021: £11.8 million) of adjusted EBITDA related to managed houses and £0.6 million
(2021: £0.4 million) related to tenanted houses. Adjusted negative EBITDA of £20.3 million (2021: negative £13.5 million) related to
head office costs and was unallocated.
13. Finance costs
All the results below are from continuing operations.
Bank loans and overdrafts
Interest on lease liabilities (note 30)
Interest on lease liabilities of £nil was incurred in the period in respect of discontinued operations (2021: £0.1 million).
2022
£m
7.0
2.5
9.5
Restated
2021
£m
7.2
2.6
9.8
14. Taxation
The major components of income tax expense/(credit) for the periods ended 28 March 2022 and 29 March 2021 are:
2022
£m
Tax charged/(credited) in the group income statement
Current income tax
Current tax expense/(credit)
Adjustment in respect of current income tax of prior periods
Deferred tax
Relating to origin and reversal of temporary differences
Adjustment in respect of deferred tax of prior periods
Change in corporation tax rate
Income tax charged/(credited) in the income statement1
1 During the period, income tax charged related to £17.2 million from continuing operations and £0.3 million from discontinued operations.
Deferred tax in the group income statement
Property revaluation and disposals
Capital allowances
Retirement benefit schemes
Trade losses
Change in corporation tax rate
Deferred tax charged/(credited) in the income statement
112 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
2021
£m
(5.8)
–
(5.8)
(1.6)
0.5
–
(1.1)
(6.9)
(0.1)
(0.2)
0.2
(1.0)
–
(1.1)
4.8
(0.1)
4.7
6.7
(0.8)
6.9
12.8
17.5
2.3
2.4
0.2
1.0
6.9
12.8
Deferred tax in the group statement of other comprehensive income
Property revaluation and disposals
Retirement benefit schemes
Interest rate swaps – cash flow hedge
Change in corporation tax rate
Deferred tax charged to other comprehensive income
2022
£m
4.8
3.3
1.0
17.3
26.4
2021
£m
3.8
0.2
0.5
–
4.5
A reconciliation of the tax expense at the group’s effective tax rate to the accounting profit before tax at the statutory tax rate for the
periods ended 28 March 2022 and 29 March 2021 respectively is as follows:
Accounting profit/(loss) before income tax
At the group's statutory income tax rate of 19% (2021: 19%)
Tax effects of:
Expenses not deductible for tax purposes1
Recognition of property revaluation, rollover claim and other property movements
Non-taxable income
Remeasurement of deferred tax - change in corporation tax rate
Prior period adjustment – current tax
Prior period adjustment – deferred tax
Total tax expense/(credit)
2022
£m
51.9
9.9
0.6
2.2
(1.2)
6.9
(0.1)
(0.8)
17.5
2021
£m
(45.2)
(8.6)
1.4
(0.1)
(0.1)
–
–
0.5
(6.9)
1 Expenses not deductible for tax purposes include property acquisition costs, pension service costs, depreciation on assets ineligible for capital allowances and share based payments.
The 2021 Budget announced an increase in the corporation tax rate from 19% to 25% with effect from 1 April 2023. This was
substantively enacted on 24 May 2021. Accordingly, the deferred tax assets and liabilities at the balance sheet date are calculated at
the substantively enacted rate of 25%, to the extent they are not expected to reverse before 1 April 2023. The effect of this tax rate
change has been recognised as an adjusting item (see note 11).
The table below shows the tax credit from discontinued operations.
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Tax credited in the group income statement
Deferred tax
Rolled over gains on disposal of properties
Reversal of temporary differences on revaluations
Tax credited in the income statement
15. Business combinations
Acquisitions in 2022
2022
£m
(1.8)
1.5
(0.3)
2021
£m
–
–
–
Lucky Onion group
On 21 February 2022, the group and the company acquired the majority of sites in the Lucky Onion group; a Cotswold-based
premium pub and hotel operator. The total cash consideration was £24.3 million which was fully in respect of the six sites acquired,
consisting of five freehold and one leasehold sites. No share capital was exchanged.
The final fair values of identifiable assets and liabilities as at the acquisition date were as follows:
Identifiable assets and liabilities
Property and equipment (note 19)
Inventories
Right-of-use assets (note 20)
Lease liabilities (note 30)
Net assets
Goodwill
Cash consideration on acquisition of the Lucky Onion business
Fair value
£m
24.2
0.1
0.2
(0.2)
24.3
–
24.3
No goodwill was recognised as the fair value of net assets acquired was equal to the cash consideration exchanged.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
113
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
15. Business combinations continued
The fair value of freehold property and equipment acquired was valued externally by Savills, independent chartered surveyors, taking
into account the properties’ highest and best value. The valuation was based on information such as current and historical levels of
turnover, gross profit, wages and overheads and resultant EBITDA. The valuers then applied an appropriate multiplier to the EBITDA.
For the leasehold site, the group measured the acquired lease liabilities using the present value of the remaining lease payments at
the date of acquisition. The right-of-use assets were measured at an amount equal to the lease liabilities and adjusted to reflect the
favourable terms of the lease relative to the market.
A £0.5 million deposit for the purchase of another property was included within other receivables at 28 March 2022.
The group incurred £1.7 million of costs associated with the acquisition, which have been recorded within operating adjusting items
(see note 11).
Between the date of acquisition and the balance sheet date, the Lucky Onion group of pubs contributed £0.8 million of revenue and
£0.2 million of operating profit. If the acquisition had taken place at the beginning of the period, group revenue would have been
expected to increase by £7.5 million and group operating profit would have increased by £2.0 million.
A £0.2 million deferred tax asset was recognised on account of the acquisition of the Lucky Onion group.
Other business combinations
In the period, the group and the company also acquired the Bull (Ditchling), Pheasant (Lambourn) and the White Horse (Hascombe)
as business combinations for considerations totalling £12.6 million. The final aggregated fair value of the identifiable assets and
liabilities of the acquired businesses were property and equipment of £12.6 million. The group incurred £1.0 million of costs
associated with the acquisitions, which have been recorded within operating adjusting items (see note 11).
Between the date of acquisition and the balance sheet date, the Bull, Pheasant and the White Horse contributed £0.9 million of
revenue and £34k to the operating profit of the group. If the acquisition had been completed at the beginning of the period, group
revenue for the period would have been expected to increase by £4.6 million and the group operating profit would have increased by
£1.0 million.
Acquisitions in 2021
In the prior period, the group and the company made no business acquisitions and there were no amendments to the fair value of
business combinations.
Cash flow from business combinations
Lucky Onion group
Other business combinations
Total net cash outflow
16. Dividends on equity shares
Final dividend (previous period)
Interim dividend (current period)
2022
£m
(24.3)
(12.6)
(36.9)
2022
£m
–
5.0
5.0
2021
£m
–
–
–
2021
£m
–
–
–
2022
pence per share
–
8.55
8.55
2021
pence per share
–
–
–
The table above sets out dividends paid. In addition, the board is proposing a final dividend in respect of the period ended 28 March
2022 of 10.26 pence per share at a cost of £6.0 million. If approved, it is expected to be paid on 7 July 2022 to shareholders who are
on the register of members at the close of business on 10 June 2022.
114 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
17. Earnings/(loss) per ordinary share
(a) Weighted average number of shares
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) Earnings/(loss) attributable to the shareholders of the parent company
Profit/(loss) for the period
Adjusting items
Tax attributable to above adjustments
Adjusted earnings/(loss) after tax
Basic earnings/(loss) per share
Basic
Effect of adjusting items
Adjusted basic earnings/(loss) per share
Diluted earnings/(loss) per share
Diluted
Effect of adjusting items
Adjusted diluted earnings/(loss) per share
(c) Earnings/(loss) from continuing operations
Profit/(loss) for the period
Adjusting items
Tax attributable to above adjustments
Adjusted earnings/(loss) after tax
Basic earnings/(loss) per share
Basic
Effect of adjusting items
Adjusted basic earnings/(loss) per share
Diluted earnings/(loss) per share
Diluted
Effect of adjusting items
Adjusted diluted earnings/(loss) per share
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
2022
Number
58,476,259
30,877
58,507,136
2021
Number
56,132,368
–
56,132,368
£m
34.4
(9.3)
7.8
32.9
Pence
58.83
(2.57)
56.26
Pence
58.80
(2.57)
56.23
£m
24.9
(0.3)
7.5
32.1
Pence
42.58
12.31
54.89
Pence
42.56
12.31
54.87
£m
(38.3)
1.1
(0.2)
(37.4)
Pence
(68.23)
1.60
(66.63)
Pence
(68.23)
1.60
(66.63)
£m
(37.6)
1.3
(0.2)
(36.5)
Pence
(66.98)
1.96
(65.02)
Pence
(66.98)
1.96
(65.02)
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
115
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
17. Earnings/(loss) per ordinary share continued
(d) Earnings/(loss) per ordinary share for discontinued operations
Profit/(loss) for the period
Adjusting items
Tax attributable to above adjustments
Adjusted earnings/(loss) after tax
Basic earnings/(loss) per share
Basic
Effect of adjusting items
Adjusted basic earnings/(loss) per share
Diluted earnings/(loss) per share
Diluted
Effect of adjusting items
Adjusted diluted earnings/(loss) per share
£m
9.5
(9.0)
0.3
0.8
Pence
16.25
(14.88)
1.37
Pence
16.24
(14.88)
1.36
£m
(0.7)
(0.2)
–
(0.9)
Pence
(1.25)
(0.36)
(1.61)
Pence
(1.25)
(0.36)
(1.61)
The basic earnings/(loss) per share figure is calculated by dividing the net profit/(loss) for the period attributable to equity shareholders
of the parent 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 30,877 dilutive potential shares under the
SAYE scheme (see notes 9(e) and 28). During the prior period, there were 61 potential dilutive shares, which were not included in the
calculation of diluted earnings per share, as they were antidilutive in the period due to the group being loss making.
Adjusted earnings per share are presented to eliminate the effect of the adjusting items and the tax attributable to those items on basic
and diluted earnings per share.
18. Goodwill
Goodwill is recognised in respect of the following acquisitions for the group and company:
Group
Geronimo Inns Limited
Redcomb Pubs Limited
Spring Pub Company Limited
Smiths of Smithfield Limited
580 Limited
At 28 March 2022
2022
£m
18.4
8.8
3.3
1.1
0.9
32.5
2021
£m
18.4
8.8
3.3
1.1
0.9
32.5
Company
2022
£m
17.0
8.7
3.3
1.1
0.9
31.0
2021
£m
17.0
8.7
3.3
1.1
0.9
31.0
116 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Cost
At 30 March 2020
Acquisitions
At 29 March 2021
Acquisitions
At 28 March 2022
Amortisation
At 30 March 2020
Disposals
At 29 March 2021
Disposals
At 28 March 2022
Carrying amount
At 30 March 2020
At 29 March 2021
At 28 March 2022
Group
£m
34.7
–
34.7
–
34.7
2.2
–
2.2
–
2.2
32.5
32.5
32.5
Company
£m
28.1
3.3
31.4
–
31.4
0.4
–
0.4
–
0.4
27.7
31.0
31.0
The opening group goodwill of £32.5 million arose on the acquisition of Geronimo Group Limited, Redcomb Pubs Limited, Spring
Pub Company Limited, Smiths of Smithfield Limited, and 580 Limited.
During the prior period, the trade and assets of Spring Pub Company Limited were transferred in full to Young’s at consolidated book
value. As a result, associated goodwill was transferred into Young’s creating goodwill of £3.3 million within the company.
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 based upon, in management’s view, the most likely recovery from the impact of covid-19 in year one, followed by a
return to full trade in year two. No impairment has been recognised in the current period.
For all cash generating units except Smiths of Smithfield, cash flows assume 1.4% growth (2021: 1.4%) from a base of expected FY24
EBITDA, derived from the board approved FY23 budget and the anticipated impact of a return to normalised trading for some sites.
For Smiths of Smithfield Limited where growth rates were higher over a five-year period to reflect the anticipated arrival of Crossrail
in 2022 and the opening of the Museum of London in 2025, and then revert back to a long-term growth rate of 1.4% thereafter.
The pre-tax discount rate applied to all cash flow projections is 9.2% (2021: 8.8%).
The group monitors the latest government legislation in relation to climate-related matters. At the current time, no legislation has been
passed that will significantly impact the group’s impairment review. The group will adjust the key assumptions used in value in use
calculations and sensitivity to changes in assumptions should a change be required.
The impairment calculation is most sensitive to the pre-tax discount rate and EBITDA assumptions. Management have performed
a sensitivity analysis on the impairment test. Given the uncertainty surrounding future trade levels following the impact of covid-19,
several scenarios have been modelled. The model includes a number of assumptions, including the recovery from covid-19 and
EBITDA forecasts, and assumptions over the long-term growth of Smiths of Smithfield Limited.
For Smiths of Smithfield Limited, the headroom would be eliminated as a result of increasing the pre-tax discount rate to 10.4% or
reducing EBITDA by 11.9% from forecast levels. For the Geronimo Group Limited, Redcomb Pubs Limited, Spring Pub Company
Limited and 580 Limited, management considered the impact of an increase in either the pre-tax discount rate by 1% or a reduction
of EBITDA by 10% from forecasted levels to be a reasonable change in assumptions. With the exception of the Spring Pub Company
Limited, the models are not sensitive to impairment with these changes in variables. Specifically, increasing the pre-tax discount rate
to 9.9% or reducing EBITDA by 6.7% would result in the elimination of headroom in Spring Pub Company Limited. Although not
considered probable, if trade continued at the current year level with no future growth rate, no impairment would be recognised apart
from for Spring Pub Company Limited and Smiths of Smithfield Limited.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
117
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
19. Property and equipment
Cost or valuation
At 30 March 2020
Additions
Transfers from subsidiary companies
Disposals
Transfer out to asset held for sale
Fully depreciated assets
Revaluation1
– upward movement in valuation
– downward movement in valuation
At 29 March 2021
Additions
Business combinations
Disposals2
Fully depreciated assets
Revaluation1
– upward movement in valuation
– downward movement in valuation
At 28 March 2022
Depreciation and impairment
At 30 March 2020
Depreciation charge
Disposals
Transfer out to asset held for sale
Fully depreciated assets
Revaluation1
– upward movement in valuation
– downward movement in valuation
At 29 March 2021
Depreciation charge
Disposals2
Fully depreciated assets
Revaluation1
– upward movement in valuation
– downward movement in valuation
At 28 March 2022
Net book value
At 30 March 2020
At 29 March 2021
At 28 March 2022
Group
Fixtures,
fittings &
equipment
£m
160.7
15.2
–
(0.2)
(0.4)
(19.1)
–
–
156.2
25.4
1.5
(10.8)
(18.3)
–
–
154.0
71.7
24.4
(0.2)
(0.1)
(19.1)
–
–
76.7
22.8
(5.3)
(18.3)
–
–
75.9
89.0
79.5
78.1
Land &
buildings
£m
714.1
3.9
–
–
(0.9)
(7.7)
14.5
(6.0)
717.9
11.5
35.3
(44.2)
(0.5)
40.3
(10.7)
749.6
32.0
1.7
–
–
(7.7)
(3.9)
1.6
23.7
1.6
(5.2)
(0.5)
(4.6)
4.7
19.7
682.1
694.2
729.9
Company
Fixtures,
fittings &
equipment
£m
154.5
15.2
0.1
(0.2)
(0.4)
(19.1)
–
–
150.1
25.3
1.5
(10.8)
(18.2)
–
–
147.9
70.5
24.3
(0.2)
(0.1)
(19.1)
–
–
75.4
22.7
(5.3)
(18.2)
–
–
74.6
84.0
74.7
73.3
Land &
buildings
£m
698.8
3.9
14.7
–
(0.9)
(7.4)
14.5
(6.0)
717.6
11.5
35.3
(44.2)
(0.5)
40.3
(10.7)
749.3
31.3
1.6
–
–
(7.4)
(3.9)
1.6
23.2
1.5
(5.2)
(0.5)
(4.6)
4.7
19.1
667.5
694.4
730.2
Total
£m
874.8
19.1
–
(0.2)
(1.3)
(26.8)
14.5
(6.0)
874.1
36.9
36.8
(55.0)
(18.8)
40.3
(10.7)
903.6
103.7
26.1
(0.2)
(0.1)
(26.8)
(3.9)
1.6
100.4
24.4
(10.5)
(18.8)
(4.6)
4.7
95.6
771.1
773.7
808.0
Total
£m
853.3
19.1
14.8
(0.2)
(1.3)
(26.5)
14.5
(6.0)
867.7
36.8
36.8
(55.0)
(18.7)
40.3
(10.7)
897.2
101.8
25.9
(0.2)
(0.1)
(26.5)
(3.9)
1.6
98.6
24.2
(10.5)
(18.7)
(4.6)
4.7
93.7
751.5
769.1
803.5
1 The group’s net book value uplift during the period was £29.5 million (2021: £10.8 million). This uplift was recognised either in the revaluation reserve or the income statement, as appropriate.
2 During the period, the majority of the disposals related to the sale of 56 tenanted pubs (see note 5).
118 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
The impact of the property revaluation exercise was as follows:
Income statement
Revaluation loss charged as impairment
Reversal of past impairment
Net uplift recognised in the income statement
Revaluation reserve
Unrealised revaluation surplus
Reversal of past surplus
Net uplift recognised in the revaluation reserve
Net revaluation increase in property
Group
2022
£m
(4.7)
5.5
0.8
39.5
(10.8)
28.7
29.5
2021
£m
(1.6)
3.4
1.8
15.0
(6.0)
9.0
10.8
Company
2022
£m
(4.7)
5.5
0.8
39.5
(10.8)
28.7
29.5
2021
£m
(1.6)
3.4
1.8
15.0
(6.0)
9.0
10.8
(a) Revaluation of property and equipment
On an annual basis, the group’s property estate is valued externally by Savills, independent Chartered Surveyors, in accordance
with the provisions of the RICS Valuation – Professional Standards January 2014 (Revised April 2015) (‘the Red Book’), which takes
account of the properties’ highest and best value.
The valuation is based on information such as current and historical levels of turnover, gross profit, wages and overheads and
resultant EBITDA. The 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 valuers have applied a spot value to the property rather than a value derived from
a multiple applied to the income. For a small number of properties, a net investment yield valuation approach is considered most
appropriate based upon the nature of site operations.
The valuations and assumptions used are reviewed by the board and the independent statutory 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 (2021: Level 3) in the fair
value hierarchy.
The key inputs to valuation on property and equipment are as follows:
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Tenure
Freehold
Freehold
Freehold
2022
Managed houses
Managed houses
Tenanted houses
Segment total
Leasehold properties
Unallocated
Total net book value at 28 March 2022
Tenure
Freehold
Freehold
Freehold
Freehold
2021
Managed houses
Tenanted houses
Managed houses
Tenanted houses
Segment total
Leasehold properties
Unallocated
Total net book value at 29 March 2021
EBITDA multiple range
Low
8.0
Spot
Spot
EBITDA multiple range
Low
7.0
7.0
Spot
Spot
High
12.0
Spot
Spot
High
12.0
12.0
Spot
Spot
Number
of pubs
114
46
3
163
59
–
222
Number
of pubs
92
31
58
23
204
68
–
272
Value
of pubs
£m
547.0
205.1
8.9
761.0
35.1
11.9
808.0
Value
of pubs
£m
434.9
29.8
236.5
24.9
726.1
39.1
8.5
773.7
In the prior period, the group’s estate included a pub which had been reclassified as an asset held for sale (see note 24). The total
number of pubs owned by the group was 273, including one pub reclassified as asset held for sale.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
119
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
19. Property and equipment continued
If, at 28 March 2022, the property estate had been carried at historical cost less accumulated depreciation and impairment losses,
its carrying amount would have been approximately £464.4 million (2021: £459.6 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 £54.7 million (2021: £46.2 million). Increasing the EBITDA used in
the revaluation by 10% would increase the valuation by £54.7 million (2021: £46.2 million).
(b) Disaggregation of property and equipment
The table below sets out disaggregation of property and equipment between pubs used by the group and pubs leased to tenants.
Land and buildings
As at 30 March 2020
Additions, disposals and transfers
Depreciation charge
Revaluation
As at 29 March 2021
Additions, disposals and transfers
Depreciation charge
Revaluation
As at 28 March 2022
Fixtures, fittings and equipment
As at 30 March 2020
Additions, disposals and transfers
Depreciation charge
As at 29 March 2021
Additions, disposals and transfers
Depreciation charge
As at 28 March 2022
(c) Capital commitments
Group and company
Used by group
£m
634.6
3.8
(1.6)
8.5
645.3
48.3
(1.6)
29.4
721.4
Leased to tenants
£m
47.5
(0.8)
(0.1)
2.3
48.9
(40.5)
–
0.1
8.5
Group and company
Used by group
£m
81.4
14.6
(22.5)
73.5
26.5
(22.3)
77.7
Leased to tenants
£m
7.6
0.3
(1.9)
6.0
(5.1)
(0.5)
0.4
Capital commitments not provided for in these financial statements and for which contracts have been
placed amounted to:
2022
£m
4.2
Total
£m
682.1
3.0
(1.7)
10.8
694.2
7.8
(1.6)
29.5
729.9
Total
£m
89.0
14.9
(24.4)
79.5
21.4
(22.8)
78.1
2021
£m
10.6
120 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
20. Right-of-use assets
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Company
Group
As at 30 March 2020
Additions
Lease amendments
Depreciation
As at 29 March 2021
Additions
Business combinations
Lease amendments
Depreciation
Disposals
As at 28 March 2022
Property
£m
163.0
2.1
0.1
(7.4)
157.8
0.8
0.2
0.1
(6.9)
(5.2)
146.8
Motor vehicles
£m
0.3
0.1
–
(0.2)
0.2
0.2
–
–
(0.2)
–
0.2
Other assets
£m
0.1
–
(0.1)
–
–
–
–
–
–
–
–
Total
£m
163.4
2.2
–
(7.6)
158.0
1.0
0.2
0.1
(7.1)
(5.2)
147.0
Property
£m
136.5
18.3
0.3
(6.2)
148.9
0.8
0.2
0.3
(6.0)
(5.2)
139.0
Motor vehicles
£m
0.3
0.1
–
(0.1)
0.3
0.2
–
–
(0.1)
–
0.4
Other assets
£m
0.1
–
(0.1)
–
–
–
–
–
–
–
–
Total
£m
136.9
18.4
0.2
(6.3)
149.2
1.0
0.2
0.3
(6.1)
(5.2)
139.4
The depreciation charge is recognised within operating costs in the income statement.
In the current period, disposals of £3.3 million related mostly to the disposal of seven of the Ram Pub Company sites (see note 5).
The remaining disposals related to continuing operations.
Lease amendments in the current period largely represent upwards market rent reviews. In the prior period, lease amendments
included £0.7 million of rent holidays treated as lease modifications which were offset against £0.7 million of rent amendments.
The group tests right-of-use assets for impairment when there are indicators that the assets may have been impaired. A decline in
trade following covid-19 was considered an indicator of impairment. An impairment is recognised if the recoverable amount is lower
than carrying value. Recoverable amount is calculated by value in use. The inputs to the impairment model are consistent with those
applied to the goodwill impairment model (see note 18). No impairment has been recognised in the current period.
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
The impairment calculation is most sensitive to the pre-tax discount rate and EBITDA assumptions. Management performed a
sensitivity analysis on the impairment test and several scenarios were modelled. A 1% increase in the pre-tax discount rate or a
permanent 10% fall in EBITDA, starting in year one, would both result in an impairment of £50k on the right-of-use assets.
21. Investments in subsidiaries
Cost and net book value
At 30 March 2020
Additions
Impairment
At 29 March 2021
Additions
Impairment
At 28 March 2022
The group financial statements include:
Group subsidiary undertakings
580 Limited
BFI Limited1
Geronimo Inns Limited
Old Manor Trading Limited1
Redcomb Pubs & Bars Limited1
Redcomb Pubs Limited
Company
£m
34.4
–
(20.1)
14.3
–
–
14.3
Country of
incorporation
and registration
England
England
England
England
England
England
% of equity
and votes held
100
100
100
100
100
100
1 The shares in this subsidiary undertaking are held indirectly.
The subsidiaries listed above are exempt from the requirements of the Companies Act 2006 relating to the audit of individual
accounts by virtue of Section 479A of that Act.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
121
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
21. Investments in subsidiaries continued
During the period, Spring Pub Company Limited was dissolved on 1 June 2021 and The Canbury Arms Limited was dissolved
on 12 October 2021. Before dissolution, both Spring Pub Company Limited and The Canbury Arms Limited were wholly owned
subsidiaries of the company.
During the prior period Smiths of Smithfield Limited was struck off and dissolved at its own request on 5 January 2021. Before that,
it was a wholly owned subsidiary of the company.
During the prior period, impairment losses of £20.1 million were recognised on the investments in Spring Pub Company Limited,
the parent company of The Canbury Arms Limited. This was a result of all the assets being transferred to the company.
Each of the company’s subsidiary undertakings has its registered office located at Copper House, 5 Garratt Lane, Wandsworth,
London SW18 4AQ.
22. Inventories
Finished goods and raw materials
23. Trade and other receivables
Trade receivables
Other receivables
Prepayments
Amounts due from subsidiaries
Group
2022
£m
4.7
Group
2022
£m
3.6
1.7
3.6
–
8.9
2021
£m
2.6
2021
£m
0.8
7.5
2.1
–
10.4
Company
2022
£m
4.7
Company
2022
£m
3.6
1.7
3.3
1.1
9.7
2021
£m
2.6
2021
£m
0.8
7.5
2.1
0.9
11.3
Trade receivables are denominated in sterling, are non-interest bearing and are generally on 0-20 days terms. They are carried at
amortised cost less expected lifetime credit losses.
Other receivables include £1.6 million (2021: £0.6 million) for fees in respect of project costs. In the prior period, other receivables
also included £4.6 million receivable from the Government in respect of the Coronavirus Job Retention Scheme and £1.3 million
in respect of government grant income claimed but not received.
Prepayments include an amount due from the pension scheme in respect of payments made to beneficiaries on behalf of the
scheme. The balance outstanding at 28 March 2022 was £0.1 million (2021: £0.9 million). The amount is non-interest bearing
and is repayable on demand.
The 12-month expected credit losses on amounts due from subsidiaries are not material in the current period or prior period.
At 28 March 2022, there were expected lifetime credit losses recognised against the trade receivables of £0.1 million
(2021: £0.5 million). The table below provides an indication of movement during the period.
Opening balance
Amounts written off
2022
£m
0.5
(0.4)
0.1
2021
£m
0.6
(0.1)
0.5
122 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Management have applied the provision matrix to identify expected credit losses in the current period as follows:
2022
Percentage loss rate
Expected lifetime credit loss
2021
Percentage loss rate
Expected lifetime credit loss
Neither past
due nor
impaired
£m
2.6
1%
–
0.5
24%
0.1
Total
£m
3.7
0.1
1.3
0.5
<31
days
£m
0.2
14%
–
–
43%
–
31-60
days
£m
0.2
6%
–
0.1
44%
–
61-90
days
£m
0.2
22%
–
0.1
49%
–
91+
days
£m
0.5
27%
0.1
0.6
56%
0.4
The expected lifetime credit loss has reduced in the current period due to the disposal of 56 of the pubs within the Ram Pub
Company (see note 5). The tenanted sites historically recognised receivable balances at a higher percentage loss rate than other
receivable categories. The overall percentage loss rate has therefore declined accordingly.
24. Asset held for sale
Property held for sale
Group
2022
£m
–
2021
£m
1.2
Company
2022
£m
–
2021
£m
1.2
In the prior period, one property, which sat within the tenanted houses operating segment, had been reclassified as held for sale and
sold during the current period. No material change in value was recognised on reclassifying the property as held for sale or on sale.
25. Trade and other payables
Trade payables
Other tax and social security
Other creditors
Accruals and deferred income
Amounts due to subsidiaries
Group
2022
£m
14.5
5.7
9.5
14.0
–
43.7
2021
£m
3.1
0.9
5.2
6.6
–
15.8
Company
2022
£m
14.5
5.7
8.4
14.0
13.2
55.8
2021
£m
3.1
0.9
5.3
6.6
11.6
27.5
All trade payables are payable on demand and the carrying values above equate to fair value.
Other creditors mainly consist of employee and property-related creditors.
26. Capital management and financial instruments
The group’s capital management objective is to maintain an optimal structure, measuring investment opportunities against returning
capital to shareholders, but with an appropriate level of gearing. This provides a platform from which the group can seek to maximise
shareholder value. The board monitors its capital using gearing ratios, such as net debt as a multiple of EBITDA and interest cover.
All covenants in relation to bank loans are prepared on a pre-IFRS 16 basis. Due to covid-19, the group had a covenant waiver in
place in relation to debt facilities which requires the group to maintain a liquidity headroom of at least £20 million. The waiver has
been comfortably complied with. From June 2022 onwards, the headroom requirement will be replaced with the original pre-covid
covenants which reference net debt/EBITDA, gearing %, and PBIT/borrowing costs. The group finances the business with a mixture
of equity (see note 31) and debt (see note 34).
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. Other sources of funding arise directly from trading activities, such as trade
and other payables. The right-of-use assets are funded by lease liabilities.
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 uncertainties section starting on page 40. The board seeks to manage the financial risks in the following manner:
i
F
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a
n
c
i
a
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S
t
a
t
e
m
e
n
t
s
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
123
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
26. Capital management and financial instruments continued
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 facilities 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 current sensitivity of the group’s profit before tax to a change in interest rates, with all other
variables held constant.
2022
2021
Increase/
decrease in %
+1.0
-0.5
+1.0
-0.5
Effect on profit
before tax
£m
(0.00)
0.00
(0.10)
0.05
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. This is assessed with regard to historical credit losses
experienced, the current economic climate, expected changes in forecasts and specific other factors of future events.
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 group’s maximum credit risk is considered to be limited to its trade receivables (see note 23).
The company is not considered to have any material exposure to credit risk from amounts due from subsidiaries. Due to the disposal
of most of the pubs within the Ram Pub Company in the period and therefore a reduced level of tenanted receivables at the balance
sheet date, the group’s overall credit risk has decreased.
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 group
has considered the effects of its latest forecasts on its compliance with bank covenants, which are tested each quarter on a twelve-
month rolling basis. Due to the ongoing covid-19 disruption, in the prior period the group agreed with its lending banks and private
placement lenders that the quarterly financial covenants would be replaced by monthly debt headroom covenants through to and
including March 2022, after which it will revert back to the pre-covid quarterly covenants. 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 (see note 1).
(a) Derivative financial instruments: interest rate swaps
Current liabilities
Non-current liabilities
Non-current assets
Total financial assets/(liabilities)
Net movement of interest rate swaps recognised in other comprehensive income
Group and company
2022
£m
(0.3)
–
2.2
1.9
5.2
2021
£
(1.8)
(1.4)
–
(3.2)
2.5
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 SONIA (previously
LIBOR). The secured loans and the interest rate swaps have the same critical terms over their relevant period.
124 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
The duration of each swap and its respective interest rates, once combined with the bank’s margin and other costs, are detailed in part
(b) of this note.
(b) Loans, borrowings, interest rates and fair values
2022
Secured
£30 million loan swapped into fixed rate
£10 million loan swapped into fixed rate
£10 million loan swapped into fixed rate
£25 million loan swapped into fixed rate
£25 million loan swapped into fixed rate
£35 million private placement at fixed rate2
£100 million revolving credit facility3
Financial liabilities
Group and company
Effective
interest
rate when
hedged
Variable
interest
rate when
unhedged1
Term or
expiry date
March 2023
May 2024
May 2024
May 2025
May 2025
July 2039
5.97%
5.02%
3.71%
2.05%
2.05%
Fixed
March 2025 Variable
S+0.95%
S+3.60%
S+2.50%
S+1.85%
S+1.85%
Fixed
S+1.25%
Period
rate fixed
1 year
3 years
3 years
4 years
4 years
18 years
None
Fair
value
2022
£m
31.0
9.8
9.8
23.5
23.5
34.7
(0.3)
132.0
Book
value
2022
£m
30.0
9.9
9.9
24.8
24.8
34.7
(0.3)
133.8
1 For variable rate loans, the interest rate payable is SONIA (S) plus the margin shown.
2 £35 million private placement has a fixed rate of interest at 3.3%.
3 Fair value and book value represent unamortised arrangement fees only due to the balance of £nil drawn as at 28 March 2022.
As at 28 March 2022, the group had committed borrowing facilities of £235 million, of which £135 million was drawn down, net of
arrangement fees of £1.2 million.
Current borrowings
Non-current borrowings
Unsecured current lease liabilities
Unsecured non-current lease liabilities
Financial liabilities
2021
Secured
£30 million loan swapped into fixed rate
£10 million loan swapped into fixed rate
£10 million loan swapped into fixed rate
£25 million loan swapped into fixed rate
£25 million loan swapped into fixed rate
£35 million private placement at fixed rate2
£20 million revolving credit facility
£100 million revolving credit facility
Unsecured
£30 million CCFF at fixed rate
Financial liabilities
Term or
expiry date
Effective
interest
rate
Group and company
Variable
interest
rate when
unhedged1
Period
rate fixed
March 2023
May 2024
May 2024
May 2025
May 2025
July 2039
November 2021
March 2025
5.97%
4.52%
3.71%
3.30%
3.30%
Fixed
Variable
Variable
L+0.95%
L+3.10%
L+2.50%
L+3.10%
L+3.10%
Fixed
Fixed
L+2.75%
2 Years
3 years
3 years
4 years
4 years
18 years
None
None
1 For variable rate loans, the interest rate payable is either 1-month or 3-month LIBOR (L) plus the margin shown.
2 £35 million private placement has a fixed rate of interest at 3.3%.
Group
2022
£m
30.0
103.8
4.9
69.1
207.8
Fair
value
2021
£m
32.9
10.3
10.2
24.6
24.6
34.6
–
9.4
146.6
Company
2022
£m
30.0
103.8
4.1
63.6
201.5
Book
value
2021
£m
30.0
10.0
10.0
24.7
24.7
34.6
–
9.4
143.4
29.8
173.2
i
F
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a
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c
i
a
l
S
t
a
t
e
m
e
n
t
s
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
125
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
26. Capital management and financial instruments continued
As at 29 March 2021, the group had committed borrowing facilities of £285.0 million, of which £173.2 million was drawn down, net
of arrangement fees of £1.6 million.
Current borrowings
Non-current borrowings
Unsecured current lease liabilities
Unsecured non-current lease liabilities
Financial liabilities
Group
2021
£m
29.8
143.4
4.9
75.3
253.4
Company
2021
£m
29.8
143.4
4.1
69.1
246.4
The secured borrowings are secured on the freehold assets of the group (other than two pubs, broadly up to a value of £12.6 million,
which provide security to the Young & Co.’s Brewery, P.L.C. Pension Scheme).
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. The group enters into interest rate derivatives with various banks; these
counterparties each have investment grade credit ratings. Interest rate swaps are valued using Level 2 valuation techniques,
which employ the use of market observable inputs. The valuation techniques include swap models using present value calculations.
The models incorporate various inputs, including the credit quality of counterparties, discount factors and interest rate curves.
As at 28 March 2022, the marked-to-market value of other derivative asset positions is net of a credit valuation adjustment attributable
to derivative counterparty default risk. The changes in counterparty credit risk had no material effect on the hedge effectiveness
assessment for derivatives designated in hedge relationships.
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
Bank of England base rate. No amounts were drawn down at 28 March 2022 or 29 March 2021.
Bank loans
The group has a bilateral £10 million term loan with Barclays Bank plc and a bilateral £10 million term loan with HSBC Bank plc,
both repayable on 23 May 2024.
The group also has a bilateral £30 million term loan with the Royal Bank of Scotland and a £50 million syndicated facility with the
Royal Bank of Scotland and HSBC. The bilateral loan with the Royal Bank of Scotland is repayable on 28 March 2023. The syndicated
loan is repayable on 19 May 2025 and has two one-year extension options, bringing the potential expiry to 19 May 2027. Since the
year-end, the bank has been informed of the intention to exercise the first of the two one-year extension options. Interest rate swaps
have been entered into in respect of these bank loans which result in the effective interest charge being fixed at the rates disclosed
on the previous page.
In July 2019, the group completed on the addition of a private placement debt facility, raising £35 million at a fixed rate of 3.3%
repayable in July 2039.
Revolving credit facility
The group has a £100 million revolving credit facility, split evenly with Barclays and HSBC, which matures in March 2025.
At the period end, the facility was undrawn (2021: £10 million). Final repayment of the total drawn down balance is due as one
payment on 20 March 2025. This is a committed facility which permits drawings of different amounts and for different periods.
These drawings carry interest at a margin above SONIA with a commitment payment on the undrawn portions. Interest is payable
at each loan renewal date.
The group also had a £20 million revolving credit facility with Royal Bank of Scotland, which matured on 28 November 2021.
Covid Corporate Financing Facility (‘CCFF’)
In May 2020 Young’s issued commercial paper with a nominal value of £30 million and a maturity date of 13 May 2021 under
HM Treasury and the Bank of England’s CCFF. This was repaid in full in the period.
126 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
(c) Maturity of the group’s financial liabilities and expiry of facilities
The below maturity tables include contractual gross undiscounted cash flows of the borrowings, related interest, net derivatives, finance
leases, trade and other payables and contractual accruals.
2022
Borrowings
Derivative financial instruments
Lease liabilities (note 30)
Trade and other payables
2022
Borrowings
Derivative financial instruments
Lease liabilities (note 30)
Trade and other payables
Amounts due to subsidiaries
2021
Borrowings
Derivative financial instruments
Lease liabilities (note 30)
Trade and other payables
2021
Borrowings
Derivative financial instruments
Lease liabilities (note 30)
Trade and other payables
Amounts due to subsidiaries
Within
one year
£m
31.2
(1.9)
7.3
38.0
74.6
Within
one year
£m
31.2
(1.9)
6.3
36.9
13.2
85.7
Within
one year
£m
31.4
1.9
7.5
14.6
55.4
Within
one year
£m
31.4
1.9
6.2
14.7
11.6
65.8
Between
one and
two years
£m
1.3
0.3
6.7
–
8.3
Between
one and
two years
£m
1.3
0.3
5.8
–
–
7.4
Between
one and
two years
£m
31.5
1.9
7.0
–
40.4
Between
one and
two years
£m
31.5
1.9
5.7
–
–
39.1
Group
Between
two and
five years
£m
72.4
0.2
18.6
–
91.2
Company
Between
two and
five years
£m
72.4
0.2
16.2
–
–
88.8
Group
Between
two and
five years
£m
83.8
0.5
19.6
–
103.9
Company
Between
two and
five years
£m
83.8
0.5
15.5
–
–
99.8
After
five years
£m
51.2
–
71.5
–
122.7
After
five years
£m
51.2
–
68.6
–
–
119.8
After
five years
£m
51.5
–
80.8
–
132.3
After
five years
£m
51.5
–
79.4
–
–
130.9
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Total
£m
156.1
(1.4)
104.1
38.0
296.8
Total
£m
156.1
(1.4)
96.9
36.9
13.2
301.7
Total
£m
198.2
4.3
114.9
14.6
332.0
Total
£m
198.2
4.3
106.8
14.7
11.6
335.6
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
127
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
26. Capital management and financial instruments continued
(d) Fair value hierarchy for instruments measured at fair value
Interest rate swaps
Financial assets at fair value
Financial liabilities at fair value
Interest rate swaps
Financial assets at fair value
Financial liabilities at fair value
Group and company
Fair value
2022
£m
2.2
(0.3)
1.9
Fair value
2021
£m
–
(3.2)
(3.2)
Level 1
2022
£m
–
–
–
Level 1
2021
£m
–
–
–
Level 2
2022
£m
2.2
(0.3)
1.9
Level 2
2021
£m
–
(3.2)
(3.2)
Level 3
2022
£m
–
–
–
Level 3
2021
£m
–
–
–
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, calculated using a discounted cash flow method. Actual and estimated cash
flows are discounted by applying discount factors derived from observable market data and by considering the credit risk.
Level 3
Fair values measured using inputs for the asset or liability that are not based on observable market data.
(e) Financial assets and other financial liabilities
Financial assets and other financial liabilities of the group and the company are not included in this note because their fair value
approximates their carrying value.
(f) Changes in liabilities arising from financing activities
Bank loans
Lease liabilities
Total liabilities from financing activities
Bank loans
Lease liabilities
Total liabilities from financing activities
At
29 March 2021
£m
173.2
80.2
253.4
At
29 March 2021
£m
173.2
73.2
246.4
Group
Cash flow
£m
(39.9)
(6.6)
(46.5)
Company
Cash flow
£m
(39.9)
(5.9)
(45.8)
Additions
£m
–
1.2
1.2
Additions
£m
–
1.2
1.2
Other
£m
0.5
(0.8)
(0.3)
Other
£m
0.5
(0.8)
(0.3)
At
28 March 2022
£m
133.8
74.0
207.8
At
28 March 2022
£m
133.8
67.7
201.5
128 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Bank loans
Lease liabilities
Total liabilities from financing activities
Bank loans
Lease liabilities
Total liabilities from financing activities
27. Deferred tax
Deferred tax relates to the following:
Deferred tax assets
Interest rate swaps – cash flow hedge
Retirement benefit schemes
Decelerated capital allowances
Capital losses
Share based payments
Trade losses
Deferred tax assets
Deferred tax liabilities
Rolled over gains on property revaluations
Retirement benefit schemes
Interest rate swaps – cash flow hedge
Deferred tax liabilities
At
30 March 2020
£m
199.2
82.3
281.5
At
30 March 2020
£m
199.2
64.6
263.8
Group
Cash flow
£m
(25.5)
(4.3)
(29.8)
Company
Cash flow
£m
(25.5)
(3.8)
(29.3)
Additions
£m
–
2.2
2.2
Additions
£m
–
12.4
12.4
Group
2022
£m
–
–
3.9
–
0.2
–
4.1
(104.8)
(3.0)
(0.5)
(108.3)
2021
£m
0.6
1.2
4.8
0.7
0.3
1.0
8.6
(73.6)
–
–
(73.6)
Other
£m
(0.5)
–
(0.5)
Other
£m
(0.5)
–
(0.5)
At
29 March 2021
£m
173.2
80.2
253.4
At
29 March 2021
£m
173.2
73.2
246.4
Company
2022
£m
–
–
3.9
–
0.2
–
4.1
(104.6)
(3.0)
(0.5)
(108.1)
2021
£m
0.6
1.2
4.8
0.7
0.3
1.0
8.6
(73.4)
–
–
(73.4)
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Net deferred tax liabilities
(104.2)
(65.0)
(104.0)
(64.8)
Reconciliation of net deferred tax liabilities:
Opening balance
Tax (charge)/credit in the income statement
Tax charge in the statement of comprehensive income
Adjustment in respect of deferred tax of prior periods
Recognised on acquisition
Closing balance
Group
2022
£m
(65.0)
(13.6)
(26.4)
0.8
–
(104.2)
2021
£m
(61.6)
1.6
(4.5)
(0.5)
–
(65.0)
Company
2022
£m
(64.8)
(13.6)
(26.4)
0.8
–
(104.0)
2021
£m
(57.4)
1.6
(4.5)
(0.5)
(4.0)
(64.8)
In the prior year, it was identified that the historical calculation of certain deferred tax liabilities incorrectly calculated the initial
recognition exemption. Following a detailed review in the prior period, a correcting adjustment was made to increase the deferred tax
liabilities and decrease the revaluation reserve by £2.5 million at 29 March 2021.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
129
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
27. Deferred tax continued
Movements in the deferred tax assets are shown below:
Deferred tax assets
Balance as at 30 March 2020
(Charged)/credited to the income statement
Charged to other comprehensive income
Balance as at 29 March 2021
Charged to the income statement
Charged to other comprehensive income
Brought forward balance transferred out to DTL
Balance as at 28 March 2022
Interest
rate swap
£m
1.1
–
(0.5)
0.6
–
(1.1)
0.5
–
Retirement
benefit
scheme
£m
1.6
(0.2)
(0.2)
1.2
–
–
(1.2)
–
Decelerated
capital
allowances
£m
4.5
0.3
–
4.8
(0.9)
–
–
3.9
Capital
losses
£m
0.7
–
–
0.7
(0.7)
–
–
–
Share based
payments
£m
0.3
–
–
0.3
(0.1)
–
–
0.2
Trade
losses
£m
0.1
0.9
–
1.0
(1.0)
–
–
–
Total
£m
8.3
1.0
(0.7)
8.6
(2.7)
(1.1)
(0.7)
4.1
On 3 March 2021, the Chancellor confirmed in his Budget statement that the UK rate of corporation tax will increase to 25% from
1 April 2023. This was substantively enacted on 24 May 2021. Accordingly, the deferred tax assets and liabilities at the balance sheet
date are calculated at the substantively enacted rate of 25%, to the extent they are not expected to reverse before 1 April 2023.
This amount has been recognised as an adjusting item (see note 11).
Due to the group’s pension scheme moving into a surplus, the deferred tax asset that was recognised in the prior period has reversed
and is now recognised as a deferred tax liability.
The group has realised capital losses of £1.5 million (2021: £5.2 million), which are available indefinitely to offset against future capital
gains. A deferred tax asset has not been recognised in respect of £1.5 million (2021: £1.5 million) of these losses because at present
it is unclear whether suitable gains will arise in the foreseeable future to utilise them. The company utilised its realised capital losses in
full in the year and has no realised capital losses remaining (2021: £3.7 million). The group’s tax losses can be carried forward for an
unlimited period.
The group has unrealised capital losses of £5.8 million (2021: £8.5 million). No deferred tax asset has been recognised in respect
of these losses (2021: £nil) because it is uncertain whether they will be utilised.
During the period, the group utilised in full, interest restrictions carried forward from prior periods (2021: £5.1 million).
28. Retirement benefit schemes
The company operates one defined benefit pension scheme, namely the Young & Co.’s Brewery, P.L.C. Pension Scheme, a defined
contribution pension scheme and a post-retirement health care scheme. The defined benefit scheme is closed to new entrants.
The aggregate contribution to the defined contribution scheme was £1.6 million (2021: £1.6 million) which is recognised as an
expense in the income statement.
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. For details
of the principal risks and uncertainties, see page 40.
The employer contribution to the defined benefit scheme for the period ended 28 March 2022 was £1.4 million of which
£1.2 million were special contributions (2021: £1.4 million of which £1.2 million were special contributions) plus premiums of
£0.2 million (2021: £0.2 million) to the post-retirement health care scheme. The current arrangement as regards contribution rates
specifies that annual special contributions of £1.2 million will be payable until October 2034.
Future employee contribution rates are projected to be between 8% and 11% of pensionable earnings. Future employer contribution
rates are projected to be 18% of pensionable earnings. The total contributions to the defined benefit scheme in the 2023 financial
period are expected to be £1.4 million which includes a special contribution of £1.2 million. The total contributions to the post-
retirement health care scheme in the 2023 financial period are expected to be £0.2 million.
130 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Financial assumptions
Discount rate
Inflation
Rate of increase in salaries
Discretionary pension increases
Rate of revaluation of deferred pensions
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
2022
%
2.80
3.60
2.50
3.60
3.10
N/A
2021
%
2.00
3.30
2.50
3.30
2.80
N/A
Health care
2022
%
2.80
N/A
N/A
N/A
N/A
6.00
2022
Years
21.9
24.3
23.3
25.8
2021
%
2.00
3.30
N/A
N/A
N/A
9.00
2021
Years
21.9
24.3
23.2
25.7
At the period end date, the average age of current pensioners was 75 years (2021: 74 years) and for future pensioners was 57 years
(2021: 56 years).
The weighted average duration of liabilities for the current period was 17.0 years (2021: 18.0 years).
A one percentage point change in the assumed rate of increase in health care costs would have the following effects:
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Effect on the aggregate service cost and interest cost
Effect on the defined benefit obligation
Increase
£m
–
0.2
Decrease
£m
–
(0.2)
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
Rate of increase in salary
Discretionary pension increases
Rate of revaluation of deferred pensions
Life expectations
Change in assumption
Impact on scheme liabilities
Increase/decrease by 0.5% Decrease/increase by 8.2%
Increase/decrease by 0.5% Increase/decrease by 6.8%
Increase/decrease by 0.5%
Increase/decrease by nil
Increase/decrease by 0.5% Increase/decrease by 4.2%
Increase/decrease by 0.5% Increase/decrease by 1.0%
Increase by 4.8%
Increase by 1 year
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
131
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
28. Retirement benefit schemes continued
Pension scheme and health care scheme assets and liabilities
Equities
Diversified growth fund
Corporate bonds
Liability Driven Investment and Asset Backed Securities
Insured pensions
Other
Total fair value of assets
Present value of retirement benefit liabilities
Scheme surplus/(deficit)
Group and company
Assets and liabilities
2022
£m
40.4
19.9
–
56.4
7.7
4.7
129.1
(116.9)
12.2
2021
£m
41.3
20.8
63.5
–
7.9
(0.8)
132.7
(138.8)
(6.1)
The company has an unconditional right to the surplus on the scheme and therefore has recognised the pension surplus.
The pension scheme assets include some of the company’s A shares with a fair value of £4.9 million (2021: £3.6 million). There are
no property assets of the scheme occupied by the company.
Of the above assets, £60.2 million (2021: £125.6 million) are quoted securities.
Movement within the schemes in the period
(a) Changes in the present value of the schemes are as follows:
Opening deficit
Current service cost
Contributions
Other finance charges
Remeasurement through other
comprehensive income
Closing surplus/(deficit)
(b) Recognised in the income statement
Current service cost included in
operating costs
Net interest expense
Pension
scheme
£m
(2.2)
(0.4)
1.4
–
15.5
14.3
2022
Health care
scheme
£m
(3.9)
–
0.2
(0.1)
1.7
(2.1)
(0.4)
–
–
(0.1)
Group and company
Total
£m
(6.1)
(0.4)
1.6
(0.1)
17.2
12.2
(0.4)
(0.1)
Pension
scheme
£m
(4.6)
(0.2)
1.4
(0.1)
1.3
(2.2)
(0.2)
(0.1)
2021
Health care
scheme
£m
(3.6)
–
0.2
(0.1)
(0.4)
(3.9)
–
(0.1)
Total
£m
(8.2)
(0.2)
1.6
(0.2)
0.9
(6.1)
(0.2)
(0.2)
132 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
(c) Recognised in the statement of comprehensive income
Experience gains arising on the
schemes' liabilities
Changes in demographic assumptions
underlying the schemes' liabilities
Changes in financial assumptions
underlying the schemes' liabilities
Remeasurement of obligations
Return on schemes' assets (less amounts
included in the net interest expense)
Net remeasurement recognised
Group and company
Pension
scheme
£m
2022
Health care
scheme
£m
(0.8)
6.3
13.5
19.0
(3.5)
15.5
0.9
–
0.8
1.7
–
1.7
Total
£m
0.1
6.3
14.3
20.7
(3.5)
17.2
(d) Movements in the present value of schemes’ obligations during the period
Pension
scheme
£m
(134.9)
(0.4)
(2.6)
(0.1)
19.0
4.2
(114.8)
Pension
scheme
£m
132.7
2.6
(3.5)
1.4
0.1
(4.2)
129.1
2022
Health care
scheme
£m
(3.9)
–
(0.1)
–
1.7
0.2
(2.1)
2022
Health care
scheme
£m
–
–
–
0.2
–
(0.2)
–
Group and company
Total
£m
(138.8)
(0.4)
(2.7)
(0.1)
20.7
4.4
(116.9)
Group and company
Total
£m
132.7
2.6
(3.5)
1.6
0.1
(4.4)
129.1
Opening defined benefit obligations
Current service cost
Interest on obligations
Contributions by schemes' members
Remeasurement of obligations
Benefits paid
Present value of schemes' liabilities
(e) Change in fair value of schemes’ assets
Opening fair value of schemes' assets
Interest on schemes' assets
Return on schemes' assets (less amounts
included in the net interest expense)
Contributions by employer
Contributions by schemes' members
Benefits paid
Fair value of schemes' assets
29. Other non-current liabilities
At 30 March 2020
Released
At 29 March 2021
Provided
At 28 March 2022
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Pension
scheme
£m
1.4
0.2
(19.3)
(17.7)
19.0
1.3
Pension
scheme
£m
(118.5)
(0.2)
(2.8)
(0.1)
(17.7)
4.4
(134.9)
Pension
scheme
£m
113.9
2.7
19.0
1.4
0.1
(4.4)
132.7
2021
Health care
scheme
£m
(0.3)
–
(0.1)
(0.4)
–
(0.4)
2021
Health care
scheme
£m
(3.6)
–
(0.1)
–
(0.4)
0.2
(3.9)
2021
Health care
scheme
£m
–
–
–
0.2
–
(0.2)
–
Total
£m
1.1
0.2
(19.4)
(18.1)
19.0
0.9
Total
£m
(122.1)
(0.2)
(2.9)
(0.1)
(18.1)
4.6
(138.8)
Total
£m
113.9
2.7
19.0
1.6
0.1
(4.6)
132.7
Deferred income
£m
0.2
(0.2)
–
–
–
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
133
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
30. Lease liabilities
(a) Group as lessee
The group has lease contracts for various items of property and vehicles used in its operations. Leases of property generally have lease
terms between 20 and 999 years, while motor vehicles generally have lease terms between three and five years.
There are several lease contracts that include extension and termination options and variable lease payments, which are further
discussed below.
Set out below are the carrying amounts of lease liabilities and the movements during the period:
As at 30 March 2020
Additions
Lease amendments
Accretions of interest
Payments
Current
Non-current
As at 29 March 2021
Additions
Business combinations
Lease disposals
Lease amendments
Accretions of interest
Payments
As at 28 March 2022
Current
Non-current
Group
£m
82.3
2.2
–
2.6
(6.9)
80.2
4.9
75.3
80.2
1.0
0.2
(3.4)
0.1
2.5
(6.6)
74.0
4.9
69.1
Company
£m
64.6
12.2
0.2
2.3
(6.1)
73.2
4.1
69.1
73.2
1.0
0.2
(3.4)
0.3
2.3
(5.9)
67.7
4.1
63.6
Group cash flow benefits arising from rent concessions totalled £0.2 million in the period (2021: £1.2 million), including £nil of
rent deferrals. This also included £0.1 million of rent holidays (2021: £0.7 million) which have been offset against £0.1 million
(£0.7 million) of rent amendments in the period.
Under the practical expedient introduced by the amendments to IFRS 16, the lease liability was remeasured, using the remeasured
consideration arising out of the rent concession, with a corresponding adjustment to the right-of-use asset. The discount rate was
not updated.
Note 26(c) summarises the maturity profile of the group’s lease liabilities based on contractual undiscounted payments.
The following amounts have been recognised in the income statement:
Depreciation expense of right-of-use assets (note 20)
Interest expense on lease liabilities (note 13)
Expense relating to short-term leases and low-value assets
Variable lease payments
Total amount recognised in the income statement
Depreciation expense of right-of-use assets (note 20)
Interest expense on lease liabilities (note 13)
Expense relating to short-term leases and low-value assets
Variable lease payments
Total amount recognised in the income statement
134 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Group
2022
£m
7.1
2.5
0.6
0.1
10.3
Group
2021
£m
7.6
2.6
0.2
–
10.4
Company
2022
£m
6.1
2.3
0.6
0.1
9.1
Company
2021
£m
6.3
2.3
0.2
–
8.8
During the current period the group had total cash outflows for leases of £6.6 million (2021: £7.1 million). The group also had non-
cash additions to right-of-use assets and lease liabilities of £1.2 million (2021: £2.2 million), of which £0.2 million related to business
combinations (see note 15).
The group has lease contracts for properties that contain variable payments based on turnover levels achieved. The following provides
information on the group’s variable lease payments, including the magnitude in relation to fixed payments:
2022
Fixed rent
Variable rent with minimum payment
Variable rent only
2021
Fixed rent
Variable rent with minimum payment
Variable rent only
Fixed payments
£m
5.6
1.0
–
6.6
Fixed payments
£m
5.9
1.0
–
6.9
Group
Variable
payments
£m
–
–
0.1
0.1
Group
Variable
payments
£m
–
–
–
–
Total payments
£m
5.6
1.0
0.1
6.7
Fixed payments
£m
5.2
0.7
–
5.9
Total payments
£m
5.9
1.0
–
6.9
Fixed payments
£m
5.6
0.5
–
6.1
Company
Variable
payments
£m
–
–
0.1
0.1
Total payments
£m
5.2
0.7
0.1
6.0
Company
Variable
payments
£m
–
–
–
–
Total payments
£m
5.6
0.5
–
6.1
The group has several lease contracts that include termination options. These options are negotiated by management to provide
flexibility in managing the leased-asset portfolio and align with the group’s business needs. As at 28 March 2022 the group was not
expecting to exercise any lease terminations options.
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
(b) Group as lessor
During the period, the group received lease income from tenants within the tenanted houses operating segment which were designated
as operating leases. Most of these pubs have been disposed of in the current period and have been classified as a discontinued operation
(see note 5). The following amounts have been recognised in the income statement in the current and prior period:
2021
Group and company
Discontinued
operations
0.4
–
0.4
2022
Group and company
Discontinued
operations
0.4
–
0.4
Lease income
Sublease income
Total lease income
Continuing
operations
0.5
0.1
0.6
Continuing
operations
0.6
0.1
0.7
Total
1.0
0.1
1.1
Total
0.9
0.1
1.0
All lease income is fixed rent. Other revenue received within the tenanted houses operating segment was generated from sales of
drink and accounted for under IFRS 15 Revenue from contracts with customers.
In the current and prior period, the group offered a rent concession to the majority of the tenanted estate. It was communicated to the
tenant that any rent concessions would be treated as variable rent payments, under which the variable element of rent is taken directly
to the profit and loss statement in the period that it relates to. For the current period, the rent concessions granted to tenants resulted
in foregone rental income of £0.4 million (2021: £2.0 million).
2022
Undiscounted lease income
2021
Undiscounted lease income
Within one
year
£m
0.4
One to two
years
£m
0.4
Two to three
years
£m
0.3
Three to four
years
£m
0.3
Four to five
years
£m
0.3
More than five
years
£m
0.2
Within one
year
£m
2.3
One to two
years
£m
1.4
Two to three
years
£m
0.9
Three to four
years
£m
0.7
Four to five
years
£m
0.7
More than five
years
£m
2.5
Total
£m
1.9
Total
£m
8.5
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
135
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
31. Share capital and reserves
Issued and fully paid shares – 12.5p each
Opening balance
Issued under employee share schemes
Issued in connection with the June 2020 equity issue
Closing balance
2022
Shares
58,475,560
1,081
–
58,476,641
2022
£000
7,310
–
–
7,310
2021
Shares
49,036,547
14,865
9,424,148
58,475,560
2021
£000
6,130
2
1,178
7,310
Of the opening balance, 34,404,805 are A shares and 24,070,755 are non-voting shares (2021: 29,876,547 A shares, 19,160,000
non-voting shares). Of the closing balance, 34,405,886 are A shares and 24,070,755 are non-voting shares (2021: 34,404,805 A
shares, 24,070,755 non-voting shares).
For details of the shares issued in the current period under employee share schemes, see Share Awards (see note 32).
The June 2020 equity issue comprised (a) the placing of 4,263,453 new A shares and 4,900,000 new non-voting shares (together,
the ‘Placing Shares’), (b) the subscription of 236,547 new A shares pursuant to an offer made by the company, concurrent to the
placing, for retail investors to subscribe for new A shares and (c) the subscription, in conjunction with the placing, of 13,393 new
A shares and 10,755 new non-voting shares by certain of the company’s directors and/or persons closely associated with them.
The new A shares were placed or issued at 1,160p per share and the new non-voting shares were placed or issued at 735p per share.
The allotment and issue of the Placing Shares was effected by way of a placing of new A shares and new non-voting shares for
non-cash consideration: J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove
(‘J.P. Morgan’), subscribed for ordinary shares and redeemable preference shares in Project Uppercase No. 1 Limited (‘JerseyCo’),
a Jersey incorporated wholly owned subsidiary of the company, for an amount approximately equal to the net proceeds of the placing,
and the company allotted and issued the Placing Shares on a non-pre-emptive basis to places in consideration for the transfer of the
ordinary shares and redeemable preference shares in JerseyCo that were issued to J.P. Morgan.
A cash box structure was used in such a way that merger relief was available under Companies Act 2006, section 612, and thus no
share premium was recorded. As the redemption of the cash box entity’s preference shares was in the form of cash, the transaction
was treated as qualifying consideration and the premium is therefore considered to be a realised profit. Transaction costs incremental
to the equity issue totalled £3.6 million and have been recorded directly in retained earnings, resulting in net realised profit recorded
in retained earnings of £83.6 million. Including the nominal share capital of £1.2 million, total gross equity raised was £88.4 million.
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,
or to attend, speak or vote at, general meetings.
Share premium account
The share premium account represents the excess of proceeds received over the nominal value of new shares issued.
Capital redemption reserve
The capital redemption reserve arose from the repurchase and subsequent cancellation of ordinary share capital. The balance
represents the nominal amount of the share capital cancelled.
Hedging reserve
Hedging reserve adjustments arise from the movement in fair value of the group’s derivative instruments used as an effective hedge.
Revaluation reserve
The revaluation reserve represents unrealised gains generated on the property estate from annual property valuations. It arises from
the surplus of fair value over the original cost, net of any associated deferred taxation.
Retained earnings
Retained earnings consists of cumulative historic realised gains and losses net of dividends paid. It also includes a non-distributable
reserve of £16.4 million (2021: £16.4 million) arising on the transfer of assets from subsidiaries to the parent as consolidated book
value, and a non-distributable reserve of £33.6 million (2021: £33.6 million) arising from the transfer of revaluation reserves relating
to leasehold assets following the adoption of IFRS 16.
136 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
32. Share awards
The group operated two types of share-based payment arrangements during the period ended 28 March 2022: an executive
director/senior management employee deferred annual bonus (‘DAB’) scheme and a Save-As-You-Earn (‘SAYE’) scheme.
(a) DAB scheme
This scheme is designed to incentivise the executive directors and certain other senior management employees to deliver long-term
superior shareholder returns. For the directors, the scheme has previously been operated with the expectation that half of any bonus
will 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 non-director senior management employees, there is no expectation that any bonus will be settled in
shares, but the individual may elect to take up to half in this way. Under previous years’ awards, for every share taken in place of
cash by a director or other senior management employee, the individual could subscribe at nominal value for one ‘matching’ share.
The company retains the right to determine, at its sole and absolute discretion, the form in which any bonus is provided (i.e. by issue
or transfer of shares and/or payment of cash); this is notwithstanding any election that an individual may make. So, if the company
decides to pay a bonus entirely in cash, no ‘matching’ shares are receivable. The individuals are not generally free to sell any of the
shares received before the end of a restricted period which ordinarily will end three years after the shares are received; special rules
apply if an individual’s employment terminates earlier by reason of death, retirement, 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 grow over a particular period; in relation to this, the remuneration committee (in respect of the directors) and the executive
committee (in respect of the other senior management employees) may adjust the group’s adjusted earnings per ordinary share
outcome including reversing in whole or in part any adjustments already made. In certain circumstances, the shares received have
to be transferred to the company or to an employee benefit trust designated by the company at a pre-agreed price or, in the case
of ‘matching’ shares, for no consideration. The number of shares to be received by an individual in order to fulfil their entitlement
is based on the market price of the company’s A shares as shown in the online version of the Financial Times published on the date
on which the shares are allotted (in the case of shares to be issued) or on the date of transfer set out in the relevant transfer form
(in the case of shares to be transferred).
The remuneration committee has decided that in view of the introduction of a new executive long-term incentive scheme, see (b) LTIP,
the operation of the deferred annual bonus scheme would change this year. Mike Owen, Simon Dodd and Tracy Dodd will be
required to defer 25% of their annual bonus (net of tax, duties or social security contributions) into shares which would be subject to
a holding period of three years. Patrick Dardis, who is retiring as an executive director on 30 September 2022, will receive his annual
bonus in cash. No matching shares will be awarded under the scheme.
The following table summarises, at 29 March 2021 and at 28 March 2022, the outstanding entitlements to A shares under the
DAB scheme of the directors and those other senior management employees who served during the period ended 28 March 2022.
Neither Mike Owen nor Simon Dodd had any outstanding entitlement to A shares under the DAB scheme at 29 March 2021 or at
28 March 2022. All shares listed in the table are registered in the relevant individual’s name and, save as explained above, are fully
vested. No A shares were awarded during the period, and the weighted fair value of the A shares awarded during the prior period
was 1,765 pence per share. During the prior period, the ‘matching’ shares were issued on the same date as the ‘non-matching’
shares which had a market value of 1,765 pence per share.
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Patrick Dardis
Torquil Sligo–Young
Tracy Dodd
Senior management
employees
Date
of award
June 2018
June 2018
June 2019
June 2019
June 2018
June 2018
June 2019
June 2019
June 2018
June 2018
June 2019
June 2019
June 2018
June 2018
June 2019
June 2019
Matching
shares
(Y/N)
At
29 March
2021
N 14,179
Y
7,089
N 21,671
10,835
Y
6,929
N
3,464
Y
6,371
N
3,185
Y
4,329
N
393
Y
4,682
N
780
Y
2,201
N
6,807
Y
3,586
N
5,143
Y
Awarded
during
the period
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Restrictions
ceased to
apply during
the period
(14,179)
–
–
–
(6,929)
–
–
–
(4,329)
–
–
–
(2,201)
–
–
–
Transferred
during
period1
–
(7,089)
–
–
–
(3,464)
–
–
–
(393)
–
–
–
(6,807)
–
–
At
28 March
2022
–
–
21,671
10,835
–
–
6,371
3,185
–
–
4,682
780
–
–
3,586
5,143
Issue
price
(pence
per share)2
1,705.0
12.5
1,765.0
12.5
1,705.0
12.5
1,765.0
12.5
1,705.0
12.5
1,765.0
12.5
1,705.0
12.5
1,765.0
12.5
1 These shares were transferred to the Ram Brewery Trust II, an employee benefit trust designated by the company. It is anticipated that during the period ending 3 April 2023, one half of the
matching shares shown as at 28 March 2022 will be transferred to Ram Brewery Trust II, further to the 50% vesting of the relevant shares as described below.
2 For ‘matching’ shares, the price shown is the nominal value.
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
137
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
32. Share awards continued
The 2019 awards under the DAB Scheme are due to vest in June 2022. The group’s adjusted earnings per share measurement
growth period for the 2019 awards is the group’s four-year financial period ending in 2022. The related performance conditions set
a range for the growth target; they are not disclosed due to commercial sensitivity. Due to the impact of the pandemic, it has been
determined that the group’s adjusted earnings per share condition applicable to ‘Matching Shares’ received under the 2019 awards
was not met. However, having regard to the company’s strong performance over the period ended 28 March 2022, as the business
recovered from the effects of the pandemic, the remuneration committee considered it appropriate to adjust this outcome such that
participating individuals will retain 50% of the Matching Shares in question. The transfers back to the Ram Brewery Trust II of the
other Matching Shares that are not retained will be shown in future financial reports.
A charge of £0.1 million (2021: £nil) was made to the group and company income statements in respect of the outstanding 19,943
‘matching’ shares at 28 March 2022 (2021: 37,696).
No awards have been granted since 2019. However, it is intended that awards will be made under the DAB scheme in 2022 (see
above), after which it is expected that the DAB scheme will be replaced by the LTIP in FY23, see (b) LTIP below.
b) LTIP
In order to incentivise and retain executive directors and other senior management employees, the company is adopting a new
long-term incentive plan (‘LTIP’), which is designed to align remuneration with both the company’s long-term financial performance
and the interests of shareholders. The LTIP will replace the company’s existing DAB scheme, and the first grant of awards will be
during FY23. The LTIP will enable the company to make awards of shares to selected employees which then vest at a later date,
subject to the achievement of specified performance or other conditions determined by the remuneration committee at the time of
grant, with the performance conditions to be satisfied over a specified performance period. Any employee (including an executive
director) of the group may be selected to participate in the LTIP. Awards may be granted under the LTIP in the form of nil cost options
over the company’s ordinary shares. Participants will not be required to make any payment in exchange for the grant of an award
under the LTIP.
(c) SAYE scheme
This scheme enables eligible directors and employees to acquire options over the company’s A shares. The options can be granted at
a discount of up to 20% of the market price of an A share at the time invitations to join the scheme for the relevant year are issued,
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 scheme are not subject to performance conditions other than continued employment. These options are all
equity-settled.
In the current period, 130,746 options over A shares (2021: nil A shares) were granted under the scheme at an exercise price of
1,176 pence per share.
Options over 58,586 A shares were outstanding at the beginning of the period. During the period, options over 20,633 A shares
lapsed, options over 84 A shares were exercised at 1,066p per share, options over 18,359 A shares were exercised at 1,364p per
share and options over 1,124 A shares were exercised at 1,412p per share. The weighted average share price of options exercised
during the period was 1,526 pence (2021: 1,379 pence). The options that were exercised (and in respect of which new shares were
issued) resulted in an increase in share capital of £135.125 (2021: £1,858.125) and an increase in share premium of £14,728.995
(2021: £156,602.775). A credit of £0.1 million (2021: £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. The cumulative fair value of the share options
outstanding at 28 March 2022 was £0.1 million (2021: £0.1 million). Options over 149,132 A shares were outstanding at the end of
the period.
The company is adopting a new set of rules for its SAYE scheme, to bring it into line with the latest legislation. The future operation of
the SAYE will not be materially different from the current arrangements in place.
138 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Valuation assumptions
Assumptions used in the Black-Scholes model to determine the fair value of share options at grant date for the period ending
28 March 2022 and 29 March 2021 were as follows:
Share price at grant date (pence)
Exercise price (pence)
Expected volatility (%)
Option life (years)
Expected dividends (expressed as dividend yield %)
Risk-free interest rate (%)
Probability of forfeiture (%)
During the prior period SAYE scheme was not introduced.
Group and company
2022 plan
1470.0
1176.0
51.0
3
1.3
1.7
2.4
2019 plan
1765.0
1412.0
24.9
3
0.9
0.3
70.0
2018 plan
1705.0
1364.0
21.0
3
1.3
0.7
61.0
Volatility is based on the standard deviation of an A share of Young & Co.’s Brewery, P.L.C. over the three years prior to the grant date,
adjusted for management’s view of future volatility of share price. The assumed volatility may not necessarily be the actual outcome.
(d) Reward and retention bonus
In the period ended 29 March 2021 a select group of individuals (all below board level) were offered a special one-off retention and
reward bonus. The terms of the offer were such that the net bonus amount would be used to purchase shares in the company on
their behalf; no cash only alternative was available. 13,542 A shares were acquired from the Ram Brewery Trust II at 1,300p per share
at a cost of £0.2 million (which was the mid-market closing price of an A share on 31 December 2020). These shares were released
on 18 September 2021 to those individuals who remained eligible to receive them.
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
33. Related party transactions
Directors
Directors’ emoluments and retirement benefits are disclosed in notes 9(b) and (c). Directors’ interests in the company’s share capital are
disclosed or referred to on page 76 and in notes 9(e) and 32. No other transactions requiring disclosure have been entered into with
the directors.
Pension scheme and other trust
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. Torquil Sligo-Young, a non-executive director of the
company, and two other individuals, neither of whom is a director of the company, are the directors of the pension trustee company.
At 28 March 2022, the scheme held 337,067 A shares (2021: 337,067), being 0.98% of the class. In March 2018, the company
granted a charge over two of its pubs as security for its obligation to make payments to the scheme: the company felt it was appropriate
to agree to this so as to demonstrate its commitment to the scheme and to provide the pension trustee company with greater comfort as
to the security of the scheme. The charge was based on a standard form document issued by the Pension Protection Fund.
The Ram Brewery Trust II holds assets for the benefit of employees and former employees. It is managed by a corporate trustee, RBT II
Trustees Limited. During the period, two individuals, neither of whom were a director of the company, were the directors of the employee
benefit trustee company. At 28 March 2022, the trust held 5,819 A shares (2021: 7,652), being 0.02% of the class. During the period:
• nil A shares (2021: nil) were transferred from the trust in connection with the company’s profit sharing scheme (see note 9(d));
• 18,486 A shares (2021: 1,518) were transferred from the trust in connection with the company’s savings-related share option
scheme (see note 9(d));
• nil A shares (2021: 13,542) were transferred from the trust, and 1,014 A shares (2021:nil) were transferred to the trust, in
connection with the special one-off retention and reward bonus (see note 32(d)); and
• 15,639 A shares (2021: 15,186) were transferred to the trust in connection with the company’s deferred annual bonus scheme
(see note 32(a)).
Neither the pension trustee company nor the employee benefit trustee company is a related party of the company for the purposes
of the AIM Rules for Companies.
Key management
The group considers key management personnel to be solely the directors of the company as they are the only ones with authority
and responsibility for planning, directing and controlling the activities of the group. The compensation provided to the directors is
detailed in note 9; in addition, the group made employers’ national insurance contributions of £0.2 million (2021: £0.2 million) and
incurred a share based payment charge of £0.1 million (2021: £nil million).
Young & Co.’s Brewery, P.L.C. | Annual Report 2022
139
Financial Statements
Notes to the financial statements continued
For the 52 weeks ended 28 March 2022
34. Net cash generated from operations and analysis of net debt
Profit/(loss) before tax from continuing operations
Profit/(loss) before tax from discontinued operations
Profit/(loss) before tax
Net finance cost
Finance charge for pension obligations
Operating profit/(loss)
Depreciation of property and equipment
Depreciation of right-of-use assets
Movement on revaluation of properties
Net (profit)/loss on disposal of property
Difference between pension service cost and cash contributions paid
Share based payments
Movements in working capital
– Inventories
– Receivables
– Payables
Net cash generated from operations
Analysis of net debt
Cash
Current borrowings and loan capital
Current lease liability
Non-current borrowings and loan capital
Non-current lease liability
Net debt
Group
2022
£m
42.1
9.8
51.9
9.5
0.1
61.5
24.4
7.1
(0.8)
(11.4)
(1.2)
(0.1)
(2.0)
1.5
28.0
107.0
Group
2022
£m
34.0
(30.0)
(4.9)
(103.8)
(69.1)
(173.8)
2021
£m
(44.5)
(0.7)
(45.2)
9.9
0.2
(35.1)
26.1
7.6
(1.8)
0.5
(1.4)
(0.1)
0.7
(1.2)
(18.3)
(23.0)
2021
£m
4.7
(29.8)
(4.9)
(143.4)
(75.3)
(248.7)
Company
2022
£m
42.0
9.8
51.8
9.6
0.1
61.5
24.2
6.1
(0.8)
(11.4)
(1.2)
(0.1)
(2.0)
1.6
28.4
106.3
Company
2022
£m
34.0
(30.0)
(4.1)
(103.8)
(63.6)
(167.5)
2021
£m
(44.4)
(0.7)
(45.1)
9.5
0.2
(35.4)
25.9
6.3
(1.8)
0.5
(1.4)
(0.1)
0.6
(1.5)
(17.0)
(23.9)
2021
£m
4.7
(29.8)
(4.1)
(143.4)
(69.1)
(241.7)
35. Post balance sheet events
There were two post balance sheet events: the exchange of contracts and completion of the Bedford Arms (Rickmansworth), and the
extension of the £50 million syndicated facility with the Royal Bank of Scotland and HSBC by one year (the first year of a two-year
option to extend) to 19 May 2026.
36. Contingent liabilities
There were no contingent liabilities at the current or prior period balance sheet date.
Young & Co.’s Brewery, P.L.C.
Copper House
5 Garratt Lane
Wandsworth
London
SW18 4AQ
Telephone: 020 8875 7000
Fax: 020 8875 7100
www.youngs.co.uk
Registered in England and Wales No. 32762
140 Young & Co.’s Brewery, P.L.C. | Annual Report 2022
Notice of meeting
If you hold any A shares, this notice is important and requires your immediate attention. If you are in any doubt as to the action
you should take, you should immediately consult your stockbroker, solicitor, accountant or other duly authorised professional
adviser. If you have sold or otherwise transferred all your shares, please forward this annual report and any accompanying
documents (except any personalised proxy form, if applicable) to the purchaser or transferee, or to the person through whom
the sale or transfer was arranged, so they can forward this to the person who now holds the shares.
If you hold any A shares, you should have received a proxy form for use in respect of 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, 3 July 2022. Appointing a proxy does not stop you from attending the meeting and voting. An attendance 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 133rd 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, 5 July 2022
at 11.30am. Resolutions 1 to 9 will be proposed as ordinary resolutions, and resolutions 10 and 11 will be proposed as special
resolutions. All A shareholders are asked to vote on these resolutions in advance of the AGM by filling in the accompanying
proxy form.
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 and unanimously recommend that all A shareholders vote in favour of them as they intend to do in respect of their
beneficial holdings.
Annual accounts and reports
Political donations and expenditure
1. To receive the Company’s annual accounts for the financial
year ended 28 March 2022, together with the strategic
report, directors’ report and the auditor’s report on those
accounts and reports.
8. To resolve 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:
Final dividend
2. To declare a final dividend of 10.26p per share for the
financial year ended 28 March 2022.
Auditor appointment
3. To resolve that Ernst & Young LLP be, and is hereby,
re-appointed as the Company’s auditor to hold office 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.
Auditor remuneration
4. To resolve that the directors be, and are hereby, authorised
to determine the remuneration of the Company’s auditor.
Re-appointment of directors
5. To resolve that Patrick Dardis be, and is hereby,
re-appointed as a director.
6. To resolve that Stephen Goodyear be, and is hereby,
re-appointed as a director.
7. To resolve that Aisling Meany be, and is hereby,
re-appointed as a director.
S
h
a
r
e
h
o
l
d
e
r
I
n
f
o
r
m
a
t
i
o
n
(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 11.59pm on
30 September 2023) 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.
Young & Co.’s Brewery, P.L.C. | Annual Report 2021
141
Shareholder Information
Notice of meeting continued
Directors’ authority to allot shares etc.
Disapplication of pre-emption rights
9. To resolve that the directors be, and are hereby, generally
and unconditionally authorised to allot shares in the
Company and to grant rights to subscribe for or convert
any security into shares in the Company:
(a)
up to a nominal amount of £2,436,526 (such amount
to be reduced by any allotments or grants made 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 £4,873,053 (such amount to be reduced
by any allotments or grants made under paragraph
(a) above) in connection with an offer by way of a
rights issue:
(i) to ordinary shareholders in proportion (as nearly
10. To resolve that, if resolution 9 is passed, the directors
be, and are hereby, given power to allot equity securities
(as defined in the Companies Act 2006) for cash under the
authority given by that resolution and/or to sell 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 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 9,
by way of a rights issue only):
(i) to ordinary shareholders in proportion (as nearly
as may be practicable) to their existing holdings; and
as may be practicable) to their existing holdings; and
(ii) to holders of other equity securities, as required
(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 authority to apply until the end of next year’s
annual general meeting (or, if earlier, until 11.59pm on
30 September 2023) 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 convert securities into shares to be
granted after the authority ends and the directors may allot
shares or grant rights to subscribe for or convert securities
into shares under any such offer or agreement as if the
authority had not ended.
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 9 and/or in the case of any sale of
treasury shares, to the allotment of equity securities or
sale of treasury shares (otherwise than under paragraph
(a) above) up to a nominal amount of £365,479,
such power to apply until the end of next year’s annual
general meeting (or, if earlier, until 11.59pm on
30 September 2023) but, in each case, 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.
142 Young & Co.’s Brewery, P.L.C. | Annual Report 2021
Authority to purchase own shares
11. To resolve 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 shares of 12.5p
each, provided that:
(a)
the maximum number of shares hereby authorised to
be purchased (which may be all A shares, all Non-Voting
shares or a mix) is 5,847,664;
(b) the minimum price, exclusive of expenses, which may
be paid for a share is 12.5p; and
(c) the maximum price, exclusive of expenses, which may
be paid for a share is the highest of:
(i) an amount equal to 5% above the average of the
middle market quotations for a share of that class 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; and
(ii) the higher of the price of the last independent trade
and the highest current independent bid on the
trading venues where the purchase is carried out at
the relevant time,
such authority to apply until the end of next year’s
annual general meeting (or, if earlier, until 11.59pm on
30 September 2023) but during this period the Company
may enter into a contract to purchase shares which would,
or might, be completed or executed wholly or partly
after the authority ends and the Company may purchase
shares pursuant to any such contract as if the authority
had not ended.
By order of the board
Chris Taylor
Company Secretary
18 May 2022
Registered office:
Copper House
5 Garratt Lane
Wandsworth
London
SW18 4AQ
Registered in England and Wales No. 32762
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Young & Co.’s Brewery, P.L.C. | Annual Report 2021
143
Shareholder Information
Notice of meeting continued
Notes
Multiple proxies
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,
4 July 2022 (or, in the event of any adjournment, at 7am on
the day before the day of the adjourned meeting).
What you need to bring
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 or its registrar 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.
If you come to the meeting, please bring with you the
attendance card attached to the proxy form.
The following principles apply in relation to the appointment
of multiple proxies:
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
or its registrar. To be valid, your proxy form must be received
by the Company’s registrar no later than 11.30am on Sunday,
3 July 2022.
Who to appoint as a proxy
A proxy does not have to be a member of the Company but
must attend the meeting to represent you and for your vote
to be counted. Your proxy could be the chair of the meeting,
a director of the Company or another person who has agreed
to attend the meeting to represent you. If you appoint a proxy,
you may still attend the meeting and vote in person, but in that
case your proxy appointment will automatically terminate.
(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 conflicting appointments being
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.
144 Young & Co.’s Brewery, P.L.C. | Annual Report 2021
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 registrar
The Company’s registrar is Computershare Investor Services
PLC. They can be contacted at The Pavilions, Bridgwater Road,
Bristol, BS99 6ZZ. Their telephone number is 0370 707 1420.
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 at the meeting venue 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 2022 annual report or any proxy
form for the Company’s 133rd annual general meeting may not
be used to communicate with the Company for any purpose
other than any expressly stated.
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(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 registrar 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.
(h) In relation to paragraph (g), if you do not specifically revoke
proxies, it will not be possible for the Company to determine
your intentions 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 or its registrar. 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
registrar or your stockbroker, solicitor, accountant or other duly
authorised professional adviser.
Termination of proxy appointments
If you wish to revoke your proxy instruction, you must send
to the Company’s registrar 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 registrar 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.
Young & Co.’s Brewery, P.L.C. | Annual Report 2021
145
Shareholder Information
Explanatory notes to the notice of meeting
Resolution 8: political donations
and expenditure
This resolution seeks renewal of the existing authority for the
Company and its subsidiaries to make or incur certain political
donations and political expenditure. Although there is no
intention to make or incur such donations or expenditure, the
legislation is very broadly drafted and may catch activities such
as funding seminars and other functions to which politicians are
invited and supporting certain bodies involved in policy review
and law reform. The authority given by this resolution will be
capped at £50,000 in total.
Resolution 9: directors’ authority to
allot shares etc.
Paragraph (a) of this resolution would give the directors the
authority to allot shares or grant rights to subscribe for or convert
any securities into shares up to an aggregate nominal amount
equal to £2,436,526 (representing 19,492,208 shares of 12.5p
each). This amount represents approximately one-third of the
Company’s issued share capital as at 17 May 2022. In line with
guidance issued by the Investment Association in July 2016,
paragraph (b) of this resolution would give the directors authority
to allot shares or grant rights to subscribe for or convert any
securities into shares in connection with a rights issue in favour
of ordinary shareholders up to an aggregate nominal amount
equal to £4,873,053 (representing 38,984,424 shares), as
reduced by the nominal amount of any shares issued under
paragraph (a) of this resolution). This amount (before any
reduction) represents approximately two-thirds of the Company’s
issued share capital as at 17 May 2022. The authority sought
under this resolution will expire at the end of next year’s annual
general meeting (or, if earlier, at 11.59pm on 30 September
2023). The directors have no present intention to exercise the
authority sought under this resolution. As at the date of the
notice, no shares are held by the Company in treasury.
Notice of the 133rd annual general meeting of
Young & Co.’s Brewery, P.L.C. (the ‘Company’)
to be held on Tuesday, 5 July 2022 is set out
on pages 141 to 145.
Resolutions 1 to 9 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 8.55p per share was paid in December
2021. The directors are recommending a final dividend of
10.26p per share for the year ended 28 March 2022, bringing
the total dividend for the year to 18.81p per share. Subject to
approval being given, the final dividend is expected to be paid
on 7 July 2022 to shareholders on the register at the close of
business on 10 June 2022.
Resolution 3: auditor appointment
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
their re-appointment is therefore being proposed.
Resolution 4: auditor remuneration
In accordance with normal practice, the directors are asking for
your authority to determine the auditor’s remuneration.
Resolutions 5, 6 and 7: re-appointment
of directors
Patrick Dardis and Stephen Goodyear are both retiring as
directors at this meeting; this is because they were directors at
the last two annual general meetings and did not retire at either
of them. Aisling Meany will also be retiring 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 are seeking re-appointment; their brief biographical
and other details are on pages 54 and 56.
146 Young & Co.’s Brewery, P.L.C. | Annual Report 2021
Resolutions 10 and 11 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 10: disapplication of
pre-emption rights
This resolution would give the directors the 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 power would be 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 £365,479 (representing
2,923,832 shares). This amount represents approximately 5%
of the Company’s issued share capital as at 17 May 2022.
The power sought under this resolution will expire at the end
of next year’s annual general meeting (or, if earlier, at 11.59pm
on 30 September 2023).
Resolution 11: authority to purchase own shares
This resolution would give the Company the authority to
purchase up to 10% of the Company’s issued shares (excluding
any treasury shares). The directors have no present intention to
exercise 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. Shares purchased by the Company pursuant to
this authority may be held in treasury or may be cancelled.
The Company currently has no shares in treasury. The minimum
price, exclusive of expenses, which may be paid for a share is
12.5p. The maximum price, exclusive of expenses, which may
be paid for a share is the highest of (i) an amount equal to 5%
above the average of the middle market quotations for a share
of that class as derived from the AIM appendix to the Daily
Official List of the London Stock Exchange for the five business
days immediately preceding the date of the purchase and (ii) the
higher of the price of the last independent trade and the highest
current independent bid on the trading venues where the
purchase is carried out at the relevant time. As at 1 May 2022,
the Company had options outstanding over 145,066 A shares,
representing 0.25% of the Company’s issued share capital at
that date. If the Company were to purchase (and cancel) its
own shares to the fullest possible extent of its existing authority
and of the authority sought by this resolution, these options
would then represent 0.31% of the Company’s issued share
capital. No warrants to subscribe for shares are outstanding.
The authority sought under this resolution will expire at the end
of next year’s annual general meeting (or, if earlier, at 11.59pm
on 30 September 2023).
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Young & Co.’s Brewery, P.L.C. | Annual Report 2021
147
Shareholder Information
Senior personnel, committees, banks, advisers and others
Directors
Stephen Goodyear
Non-Executive Chairman
Patrick Dardis
Chief Executive
Mike Owen
Chief Financial Officer
Simon Dodd
Chief Operating Officer
Tracy Dodd
People Director
Nick Miller
Senior Independent
Non-Executive Director
Ian McHoul
Independent Non-Executive Director
Torquil Sligo-Young
Non-Executive Director
Aisling Meany
Independent Non-Executive Director
Company Secretary
Chris Taylor
Audit committee
Ian McHoul (Chair)
Nick Miller
Aisling Meany
Remuneration committee
Nick Miller (Chair)
Ian McHoul
Aisling Meany
Banks
HSBC Bank plc
8 Canada Square
London E14 5HQ
Royal Bank of Scotland Group plc
Corporate Banking London
250 Bishopsgate
London EC2M 4RB
Barclays Bank plc
1 Churchill Place
London E14 5HP
Auditor
Ernst & Young LLP
1 More London Place
London SE1 2AF
Nominated adviser
J.P. Morgan Securities plc
25 Bank Street
Canary Wharf
London E14 5JP
Stockbrokers
J.P. Morgan Securities plc
25 Bank Street
Canary Wharf
London E14 5JP
Panmure Gordon (UK) Limited
One New Change
London EC4M 9AF
Solicitors
Gowling WLG (UK) LLP
Two Snowhill
Birmingham
B4 6WR
Slaughter and May
One Bunhill Row
London EC1Y 8YY
Shareholder information
Registrar
The company’s registrar is
Computershare Investor Services PLC.
They can be contacted at The Pavilions,
Bridgwater Road, Bristol BS99 6ZZ.
Their telephone no. is 0370 707 1420.
Managing your shares
Information about how to manage
your shareholding online can be
found at www.investorcentre.co.uk.
Shareholders can contact Computershare
on the details above in relation to
administrative enquires relating to their
shares, such as a change of personal
details, the loss of a share certificate,
out-of-date dividend cheques and a
change of dividend payment methods.
Shareholder communications
Shareholders who have not yet elected
to receive shareholder documentation
in electronic form can sign up by
registering at www.investorcentre.co.uk.
Should Shareholders who have elected
for electronic communications require
a paper copy of any of the Company’s
shareholder documentation, or wish to
change their instructions, they should
contact Computershare.
Shareholder fraud
Fraud is on the increase and many
shareholders are targeted every year.
If you have any reason to believe that
you may have been the target of a
fraud, or attempted fraud in relation
to your shareholding, please contact
Computershare immediately.
Shareholder offers
Details of shareholder discounts and
offers are mailed to shareholders from
time to 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
Copper House
5 Garratt Lane
Wandsworth
London SW18 4AQ
Registered number: 32762
Further information
Please visit: www.youngs.co.uk
148 Young & Co.’s Brewery, P.L.C. | Annual Report 2021
Young’s pubs and hotels
How many have you visited?
Adam and Eve, Fitzrovia
Canonbury, Islington
Double Locks, Exeter
Albans Well, St Albans
Carnarvon Arms, Newbury
Duchess of Kent, Islington
Albert, Kingston-upon-Thames
Albion, City of London
Castle, Islington
Castle, Tooting
Duke of Cambridge, Battersea
Duke of Clarence, Kensington
Alexander Pope, Twickenham
Chelsea Ram, Chelsea
Duke of Wellington, Notting Hill
Alexandra, Wimbledon
Chequers Inn, Hanham Mills
Duke on the Green, Parsons Green
Alma, Wandsworth
Chequers, Walton-on-the-Hill
Duke’s Head, Putney
Angel & Greyhound, Oxford
Cherry Tree, East Dulwich
Duke’s Head, Wallington
Bear Inn Hotel, Esher
City Gate, Exeter
Dunstan House Inn, Burnham-on-Sea
Bear, Cobham
Bear, Oxshott
Beaufort, Hendon
Clarence, Westminster
Eagle, Shepherd’s Bush
Clock House, East Dulwich
East Hill, Wandsworth
Coach & Horses, Barnes
Elgin, Notting Hill
Bell Hotel, Stow-on-the-Wold
Coach & Horses, Greenwich
Enderby House, Greenwich
Bell, Fetcham
Coach & Horses, Isleworth
Fellow, King’s Cross
Betjeman Arms, St Pancras
Coach & Horses, Kew
Fentiman Arms, Oval
Bickley, Chislehurst
Coat and Badge, Putney
Final
Bishop, Kingston-upon-Thames
Coborn, Mile End
Finch’s, Islington
Blue Boar, Chipping Norton
Cock Tavern, Fulham
Fire Stables, Wimbledon
Boathouse, Instow
Boathouse, Putney
Brewers Inn, Wandsworth
Bridge Hotel, Chertsey
Bridge Hotel, Greenford
Britannia, Kensington
Brook Green Hotel, Hammersmith
Buckingham Arms, Westminster
Bull and Gate, Kentish Town
Bull, Bracknell
Bull, Ditchling
Bull, Streatham
Bull, Westfield Shepherd’s Bush
Bulls Head Chislehurst
Bulls Head, Barnes
Bunch of Grapes, London Bridge
Canbury Arms,
Kingston-upon-Thames
Constitution, Camden
(closed – not trading)
Coopers Arms, Chelsea
County Arms, Wandsworth
Cow, Westfield Stratford
Crooked Billet, Wimbledon
Crown & Anchor, Chichester
Crown Hotel, Chertsey
Crown Inn, Minchampton
Crown, Bow
Crown, Lee
Crown, Twickenham
Curtains Up, West Kensington
Cutty Sark, Greenwich
Defector’s Weld, Shepherd’s Bush
Devonshire, Balham
Dial Arch, Woolwich
Dirty Dicks, Bishopsgate
Candlemaker, City of London
Dog & Fox, Wimbledon
Canford Hotel, Poole
Dolphin, Betchworth
Flask, Hampstead
Foley, Claygate
Founders Arms, Southbank
Fox & Anchor, Smithfield Market
George Hotel, Cheltenham
Grand Junction Arms, Harlesden
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Grange, Ealing
Grantley Arms, Wonersh
Green Man, Putney
Greyhound, Carshalton
Grocer, Spitalfields
Grove, Balham
Grove, Exmouth
Guard House, Woolwich
Guinea, Mayfair
Half Moon, Putney
Halfway House, Earlsfield
Hammersmith Ram, Hammersmith
Hand and Spear, Weybridge
Hand in Hand, Wimbledon
Young & Co.’s Brewery, P.L.C. | Annual Report 2021
149
Shareholder Information
Young’s pubs and hotels continued
Hare & Hounds, East Sheen
Old Brewery, Greenwich
Spread Eagle, Camden
Highbury Vaults, Bristol
Old Manor, Potters Bar
Spread Eagle, Wandsworth
Hollow Bottom, Guiting Power
Old Shades, Westminster
Spring Grove, Kingston-upon-Thames
Hollywood Arms, Chelsea
Old Ship, Hammersmith
Station Hotel, Hither Green
Home Cottage, Redhill
Old Ship, Richmond
Hope and Anchor, Brixton
One Tun, Fitzrovia
Station Tavern, Cambridge
Swan, Walton-on-Thames
Horts, Bristol
Kings Arms Oxford
Kings Arms, Chelsea
Onslow Arms, West Clandon
Tavern, Cheltenham
Orange Tree, Richmond
The Depot, Kidbrooke Village
Owl and Pussycat, Shoreditch
Theodore Bullfrog, Charing Cross
Kings Arms, Wandsworth
Oyster Shed, Bank
Trafalgar Arms, Tooting
Kings Head, Islington
Park Hotel, Teddington
Trinity Arms, Brixton
Kings Head, Roehampton
Paternoster, St Paul’s
Victoria, Kingston-upon-Thames
Kings Head, Winchmore Hill
Penny Black, Leatherhead
Village Inn, Ealing
Lamb Tavern, Leadenhall Market
Pheasant Inn, Lambourn
Waterfront, Wandsworth
Lamb, Bloomsbury
Lamb, Hindon
Phoenix, Chelsea
Phoenix, Victoria
Waterside, Fulham
Weyside, Guildford
Lass O’Richmond Hill, Richmond
Plough, Beddington
Wheatsheaf Hotel, Northleach
Leather Bottle, Earlsfield
Plough, Clapham Junction
Wheatsheaf, Borough Market
Leman Street Tavern, Aldgate
Porchester, Westbourne Grove
Wheatsheaf, Esher
Lion and Unicorn, Kentish Town
Prince Albert, Battersea
White Bear, Kennington
Lock Keeper, Keynsham
Prince Alfred, Maida Vale
White Bear, Tunbridge Wells
Lockhouse, Paddington
Princess of Wales, Clapton
White Cross, Richmond
Lord Palmerston, Tufnell Park
Queen Adelaide, Wandsworth
White Hart, Barnes
Lounge at The Salt Room, Islington
Queens, Primrose Hill
White Hart, Littleton-on-Severn
Manor Arms, Streatham
Marlborough, Richmond
Marquess of Anglesey,
Covent Garden
Mitre, Lancaster Gate
Mitre, Shaftesbury
Morpeth Arms, Westminster
Mulberry Bush, Southwark
Narrowboat, Islington
Naturalist, Hackney
New Inn, Ealing
Nightingale, Balham
Nine Elms Tavern, Battersea
No 38 Park Hotel, Cheltenham
Northcote, Battersea
150 Young & Co.’s Brewery, P.L.C. | Annual Report 2021
Red Barn, Lingfield
Red Lion, Radlett
White Hart, Sherfield On Loddon
White Horse, Broadgate
Richard the First, Greenwich
White Horse, Hascombe
Riverside, Vauxhall
Riverstation, Bristol
Windmill, Clapham
Windmill, Mayfair
Roebuck, Hampstead
Wood House, Dulwich
Rose and Crown, Wimbledon
Woolpack, Bermondsey
Royal Oak, Bethnal Green
Worplesdon Place, Guildford
Seagate Hotel, Appledore
Shaftesbury, Richmond
Ship Inn, East Grinstead
Ship, Wandsworth
Smiths of Smithfield,
Smithfield Market
Spotted Horse, Putney
“ It has been a huge privilege to lead the group for the past six
years and I am pleased to hand over the reins to my successor,
Simon Dodd and the rest of the executive team.”
Patrick Dardis
Chief Executive
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Young & Co.’s Brewery, P.L.C.
Copper House, 5 Garratt Lane,
Wandsworth, London SW18 4AQ
Telephone: 020 8875 7000
Fax: 020 8875 7100
www.youngs.co.uk
Registered in England number 32762