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March 25, 2012 11:28 pm
Young & Co’s, the London pub company, is targeting acquisitions in the West End and City as it seeks to expand from its Wandsworth base.
“We’ve got plenty of room to expand in the M25,” said Stephen Goodyear, Young’s chief executive. ”We’re not as strong as we would like to be in the West End and City – there is room to expand there.”
The announcement follows the Aim-quoted company’s £60m cash purchase of gastropub chain Geronimo Inns, which had 26 mostly central London pubs, in late 2010, marking the conservative pub company’s biggest ever acquisition.
Young’s has subsequently opened six more food-led Geronimo pubs, including one earlier this year on the ground floor of Japanese bank Nomura’s City headquarters, and it plans to open another eight by 2015, according to Geronimo’s co-founder Rupert Clevely.
Yet despite the attraction of food for bringing in customers, Young’s, whose 245 pubs are predominantly within the M25, intends to seek a balance between drinkers and diners.
“We have invested a lot in our kitchens but we want to keep our pubs as pubs,” said Mr Goodyear. “Seventy per cent of turnover is still liquor ... once you stray too far into food you can lose the pub feel.”
The company has a debt to earnings ratio of just over three times, relatively low by the standards of the pub sector, although its net debt of around £124.5m is double the level before the Geronimo acquisition.
Unlike London rivals Fuller, Smith & Turner Young’s has no plans to expand its estate outside London. Mr Goodyear said the company was expecting a significant boost to business during the Olympics and the Queen’s diamond jubilee celebrations.
“The diamond jubilee will be huge ... the pageantry is river-focused where many of our pubs are,” he said.
Last August Young’s decided to break with 180 years of tradition and focus solely on pubs when it sold its 40 per cent stake in the Wells Young’s Brewing Co, the maker of beers including Courage Directors, Wells Bombardier and Young’s Bitter for £15.1m
Following last week’s budget under the government’s so-called alcohol “duty escalator” consumers can expect an 11p price rise on a bottle of wine, 41p on a bottle of spirits and 3p on a pint of beer from Monday according to The Wine and Spirit Trade Association.
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