annual report 2011annual report 2011. chairman’s statement 2 chief executive’s report 5 the...

Young & Co.’s Brewery, P.L.C. Annual Report 2011 fc1

Annual Report 2011

Chairman’s statement 2

Chief Executive’s report 5

The board of directors 11

Directors’ report 12

Independent auditor’s report 19

Group income statement 20

Statements of comprehensive income 2 1

Balance sheets 22

Statements of changes in equity 24

Statements of cash flow 26

Notes to the financial statements 27

Notice of meeting 56

Explanatory notes to the notice of meeting 60

Five year review 62

Senior personnel, committees and advisers 63

Shareholder information 63

Young’s pubs and hotels 64

Contents

Young & Co.’s Brewery, P.L.C. Annual Report 2011 1

2011 2010 % £000 £000 change Revenue 142,597 127,539 +11.8

Adjusted operating profit* 21,746 20,307 +7.1

Adjusted profit before tax* 20,819 19,423 +7.2

Profit before tax 15,258 18,376 -17.0

Adjusted basic earnings per share* 32.65p 28.71p +13.7

Basic earnings per share 36.97p 26.00p +42.2

Dividend per share 13.26p 13.00p +2.0(interim and recommended final)

All of the results above are from continuing operations.

*Throughout this report, reference to an “adjusted” item means that item has been adjusted to exclude exceptional items (see notes 9 and 14).

Financial highlights

2 Young & Co.’S Brewery, P.L.C.’S Annual Report

It gives me great pleasure to report on a year of considerable achievement, both operational and strategic, at Young’s. We have made very encouraging progress in terms of our trading results, and have significantly increased the size of our managed estate in the London area, most notably through the acquisition, late in the year, of Geronimo, our largest acquisition to date and one that fits perfectly with our strategy to expand in premium London managed houses.

OurtradingperformanceinatoughconsumerspendingenvironmentshowsthestrengthandresilienceofYoung’s.Itistestamenttothequalityofourpubestate,bothmanagedandtenanted,andofourhotelswhicharestartingtoshowtheirtruecolours.Ourbrewingassociate,Wells&Young’s,alsohadagoodyear.

TheadditionoftheGeronimobusinesstoYoung’sinDecemberwasasignificantstrategicmove.WehadsaidforsometimethatwewerekeentoexpandourestateofmanagedhousesintheLondonareathroughacquisition,butthatwewouldonlydosowhentherightopportunityaroseandGeronimorepresentedexactlythat.Aswellasadding26premiumsitestoourmanagedestateunderawellrespectedandcomplementarybrand,thespecificexperienceoftheGeronimoteamopensupnewgrowthopportunitiestous.Inthatcontext,Iwouldliketoformallywelcomeitsco-founder,RupertClevely,totheboard.

Overall,revenueforthe53weeksto4April2011rose11.8%to£142.6million,adjustedprofitbeforetaxwasup7.2%at£20.8millionandadjustedbasicearningspershareincreased13.7%to32.65pence.Profitbeforetax,beforeanyadjustments,was£15.3million.Theseresultsinclude16weeks’tradingfromGeronimo.Duringtheyearweinvested£60.0millionintheGeronimoacquisition,andcontinuedtoinvestinourexistingestate,yetwestillfinishedtheyearwitharobustbalancesheetandasoundlongtermfinancingpackageinplace.

Yourboardremainsascommittedasevertorewardingtheloyalsupportofourshareholdersthroughapolicyoflongtermdividendgrowth.Wearethereforerecommendinga2.0%increaseinthefinaldividendto6.90pencepershare,resultinginatotaldividendfortheyearof13.26pence(2010:13.00pence).Thefinal

dividend,ifapproved,willbepaidon14July2011toshareholdersontheregisteratthecloseofbusinesson10June2011.ThiswillbethefourteenthconsecutiveyearofdividendincreaseforYoung’sshareholders.

Aswellasfocusingresolutelyondeliveringconsistentvalueforshareholders,weareveryawareofourwiderresponsibilitiesandwecontinuetoworkwithotherstopressforbettersupportfromGovernmentforourindustry.Thusfar,despitesomewarmwords,wehaveseeninsufficientaffirmativeactiononitsparttoprotectthepubindustryandtopromotethepub’sroleinthetypeofsocietytowhichthePrimeMinisteraspires.Thetaxburdenremainsdisproportionatelyhigh,theredtapetooprevalent,andtheproblemofoveravailabilityoflowpricedalcoholinsupermarketscontinues.

Wealsorecogniseourroleinthecommunitiesweserve.Weexpectandencourageallourpubstoactasgoodandresponsibleneighbours,topromotetheresponsibleconsumptionofalcohol,tomanageproactivelytheirenvironmentalimpact,toprovideasafeandhealthyenvironmentforcustomersandcolleaguesalike,andtoprovideactivesupportforlocalprojectsandcharitieswheretheycan.

After38yearswithYoung’s,thepastfiveasChairman,Iwillberetiringatthisyear’sAGM.Weareveryfortunatethat,inNickBryan,wehaveanextremelyablesuccessor.Aswellashavingagreatdealofexpertiseinthehospitality,propertyandbrewingsectorsgainedthroughvariouspositionswithinCourage,healsoco-foundedtheInnserveGroup.NickhasbeenontheYoung’sboardasanon-executivedirectorsince2006.Hethereforeknowsourindustry,ourbusinessandourpeopleextremelywellandIhavenodoubtwhatsoeverthathewillprovideexcellentleadershipandsupporttoStephenGoodyearandhisexecutiveteamastheycontinuetodriveYoung’sforwardintheyearsahead.

Chairman’s statementThis forms part of the Directors’ report on pages 12 to 18.


Nickwillbeleadingabusinesswhichhasmadegreatstridesinrecentyears.In2006wetookthestrategicdecisiontomovefrombeingaverticallyintegratedbrewingbusinesstooneconcentratedondevelopingapubestateofpremiummanagedhousesinLondonandtheSouthEast,wherewestronglybelievethegreatestsustainableprofitopportunitylies.Sincethatdecision,wehavetransformedthebusinessthroughthedisposalofthebrewerysitein2006,thecreationofthebrewingassociate,investmentinourpubsandexpansionofourestatefrom208in2006to246today,therebydoublingourprofitsandthedividendinthesameperiod.AllofthishasbeenachievedwhilstmaintainingthefinancialstrengththatisacentralpillarofYoung’sinvestmentpropositionandretainingthetraditionsandculturethataretheveryessenceofYoung’s.TheseareachievementsofwhicheveryoneatYoung’scanbejustifiablyproud.TheplatformthatallthiscreatesisonethatengendersgreatconfidenceinYoung’simmediateandlongertermfuture.

Inthatcontext,itispleasingtoreportthatthecurrentyearhasstartedverywell,withourmanagedhousesalesup34.2%intotalinthefirstsevenweeks,andup8.8%onalikeforlikebasis.Despitethethreatofadoublediprecessionreceding,consumerspendingisgoingtoremainunderconsiderablepressurefortheforeseeablefuture,andtheboardisdeterminedthatYoung’swilltradesuccessfullythroughtheseconditions.Wehavefurthergrowthtopursuewithinourenlargedexistingestateandinthepipelineofnewpubopportunitiesthatwehaveidentified.Overthenext18monthsandduringnextsummer’sOlympicsinparticular,Londonwillexperienceunprecedentedlevelsofvisitorfootfallandbothourpubsandourhotelsareverywellpositionedtobenefit.

ThisbeingmylaststatementasChairman,itismoreappropriatethaneverthatIfinishwithamessageofwholeheartedgratitudetoeveryonewhohasplayed,andcontinuestoplay,aroleintheenduringsuccessofYoung’s.Ourcustomers,ourmanagers,ourtenantsandourstaffthroughouttheestateandatheadoffice–boththosefromYoung’sandthosewhohavejoinedusmorerecentlyfromGeronimo–thepartnersandsupplierswithwhomweworkand,ofcourse,ourhighlysupportiveshareholders,allcontributesignificantlytowhatwedoandtothesuccessthatweenjoy.Inparticular,IwouldliketopaytributetoourChiefExecutive,StephenGoodyear,andhisteamofexecutivedirectors.TheircommitmentandenthusiasmforYoung’sareattheheartofourachievements.Onapersonalnote,andonbehalfoftheboard,Ithankthem,andIthankyouall.

IhopeverymuchtoseeasmanyshareholdersaspossibleattheAGMwhichistobeheldon12July2011intheCivicSuiteinWandsworthTownHall,LondonSW18.Theformalnoticeofthatmeetingissetoutonpage56ofthisreport.

Christopher SandlandChairman25 May 2011

“We have transformed the business through the disposal of the brewery site in 2006, the creation of the brewing associate, investment in our pubs and expansion of our estate, thereby doubling our profits and the dividend in the same period.”


Overview

This has been a productive and exciting year for Young’s both with the trading improvements we are seeing in our business and the acquisition of Geronimo in December.

Revenuewasup11.8%at£142.6millionandadjustedprofitbeforetaxup7.2%at£20.8million.Profitbeforetax,beforeanyadjustments,was£15.3million.Wegeneratedlikeforlikerevenueandprofitincreasesacrossbothourmanagedandtenantedestates,andhaveseenveryencouraginggrowthfromourhotelbusiness,inwhichwehavemadeconsiderablerecentinvestment.

The£60.0millionacquisitionofGeronimoinDecemberfitswellwithourgrowthstrategyandourfocusonpremiumLondonmanagedhouses.Itrepresentsastepchangeinthesizeofourestate,andintroducesnewgrowthopportunitiestous.Geronimo’smanagementteamisstayingwithYoung’sandwearepleasedthatRupertClevely,Geronimo’sco-founder,hasjoinedtheYoung’sboardasanexecutivedirector.Iwouldliketosayaparticularthankyoutotheheadofficeteams;acorenumberworkedtirelesslyontheacquisition,buteveryonehascontributedtotheeffectiveintegrationofthebusinesses.

Inadditiontotheacquisitionofthe26existingGeronimopubs,weopenedtwonewpubs,acquiredthreefurtherpubs,andmadefourdisposals.Wethereforefinishedtheyearwith246pubsintotal,up27fromlastyear.Ourwellinvestedpubportfolioisdeliberatelytargetedatdiscerningcustomerswhovalueourpremiumofferingoffood,caskales,wineandleadinglagerbrandsallservedinawelcomingambience.

Asalways,ourdividendpolicyisdesignedtorewardthesupportweenjoyfromourloyalshareholdersandwearerecommendinga2.0%increaseinthefinaldividendto6.90pencepershare,resultinginatotaldividendfortheyearof13.26pence(2010:13.00pence).

Business reviewManaged housesWebeganthefinancialyearwith120managedpubsand26morewereaddedwiththeGeronimoacquisitioninDecember.WeopenedtheDialArchintheWoolwichArsenalandtheSurpriseinChelsea,andacquiredtheLassO’RichmondHillandtheLionandUnicorninKentishTown;thelatterbegantradingundertheGeronimobrandjustaftertheyearend.InadditiontheCoachandHorsesinIsleworthandtheQueensinPrimroseHillweretransferredfromourtenantedoperations,resultinginanestateof149managedpubsattheendofthefinancialyear.

Revenue,withthebenefitoftheseextrapubs,increased13.2%to£127.8millionandoperatingprofitincreasedby11.1%to£29.2million.Nextyear’sresultswillbenefitfromafullyearoftradingfromtheseacquisitions.

Chief Executive’s reportThis forms part of the Directors’ report on pages 12 to 18.

The key performance indicators that the board uses to measure the development, performance and position of the group’s business are on page 12.


Sameoutletlikeforlikerevenueinachallengingmarketwasup1.9%,operatingprofitwas4.6%aheadoflastyearat£27.6millionandEBITDAwas3.8%betterat£34.4million,withaverageEBITDAbeforerentspersameoutletmanagedhouseof£302,000.

Liquorandfoodsaleswerebothaheadoflastyearonalikeforlikebasis,butthebiggestgrowthhascomefromourhotelbusiness.Therewardsfromourhotelrebranding,recentinvestmentsinroomupgrades,websites,onlinebookingandrevenuemanagementsystemsarenowevident.BetteroccupancyandroomrateshavedrivenRevPar(revenueperavailableroom)up14.2%at£44.11andaccommodationrevenueup15.2%.

TheAlma,ourboutiquehoteloppositeWandsworthTowntrainstation,openedinDecember.Ithasalreadyprovedpopularwithcustomersandhasreceivedsomefantasticpressreviewsfromleadingnationalnewspapers.Itisachievingthehighoccupancyandroomratesanticipatedandthepubisalsodemonstratingstronggrowthsincethedevelopmentwascompleted.

Intotalweinvested£12.6millionintheYoung’smanagedestate.Ofthis,£3.6millionwasinvestedinourtwonewmanagedpubsand£5.5milliononourexistingoneswiththemajorinvestmentsattheAlexandrainWimbledon,DolphininBetchworth,BishopoutofResidenceinKingston,CoachandHorsesinIsleworthandfinishingtheCooper’sArmsinChelsea.£3.5millionwasinvestedinourhotels;thisincludedthemajorinvestmentattheAlmabutalsoworkcarriedoutattheAlexanderPopeinTwickenham,BridgeinGreenford,WindmillonClaphamCommonandamajorprojectattheRedLioninRadlett.Afurther£3.4millionwasspentonGeronimopubspostacquisition.ThisincludedacquiringtheLionandUnicorn,afreeholdinKentishTownanddevelopingtheSurprise,aleaseholdinChelsea.InadditionweboughtthefreeholdinterestintheCrown,aleaseholdpropertyGeronimooperatedontheedgeofVictoriaParkinBow.

DevelopmentsundertakenintheyeartoMarch2010,whichhavenowcompletedtheirfirstfullyearpostdevelopment,basedonanincreaseinEBITDA,demonstratea26.9%returnoninvestment.

TheacquisitionofGeronimobringsYoung’sanew,parallelandgrowingconcept,targetingadifferentbutcomplementarydemographic.Geronimohasachievedstrongorganicgrowthoverrecentyearsanditsmanagementteamhasaprovenabilityinrollingouttheirsuccessfulformatinarangeofdifferentretaillocations.Inparticularitbringsgreaterexperienceinoperatingathighfootfalllocations,withpubsatHeathrowAirport,St.PancrasInternationalTrainStationandtheWestfieldLondonShoppingCentreinShepherd’sBush.TheirtrackrecordofidentifyingexcellentpubsinprimelocationsunderpinsGeronimo’slongtermgrowthpotential.Forthe16weekssinceacquisition,theGeronimobusinesshastradedwellandinlinewithourexpectations.

Fromtheconsumers’pointofview,theYoung’sandGeronimopubswillberunseparately,butthereareclearbenefitsfromsharedwaysofworking,purchasing,peopledevelopmentandcombiningtherelativestrengthsofonlinemarketingandbrandsupport.Thefocuswillbeondevelopingsitestotheirfullpotential,whetherasaYoung’sorGeronimopub,andensuringthosepubsinclosegeographicalproximityhaveaclearpointofdifference.

Withmoreandmorecustomersusingtheinternettosearchforplacestoeat,drinkandstay,wecontinuetodriveourmarketingstrategyonline,withover470,000registeredcustomers.Allofourpubsareeasilyaccessedonlinethroughwww.youngs.co.uk,www.geronimo-inns.co.ukorthroughindividualpubsites.Withtwooutofeverythreepeopleusingsocialmediaplatforms,FacebookandTwitterareprovinganothersuccessfulmeanstoattractandretaincustomers.Socialmediaisalsofuellinganewgeneration’sinterestincaskaleasmoreadvertisingcampaignsusetheseplatformstoengagedrinkers.InDecember,welaunchedournewhotelswebsite,www.youngshotels.co.uk,whichoffersguestsasimplefacilitytoengagewithourhotels,bookroomsandchooseadditionalservicesonlineandthiswilldriveonlinetrafficacrossthegroup.ThiswillbeincreasinglyimportanttoensurethatYoung’stakesfulladvantageofthetouristmarketasweenteranimportantperiodforLondonwiththeQueen’sDiamondJubileeandtheOlympicGames,bothinthesummerof2012.

Chief Executive’s report (continued)



Withamyriadofstyles,flavoursandcolours,caskbeerremainstheperfectproductforconsumersseekingoutamoreinterestingdrink.CaskalecontinuestooutperformtheoverallbeermarketandoncemoretheexcellentrangeofalesprovidedbyWells&Young’shasbeencomplementedbyour“LocalHeroes”campaign.Thisrotatingrangeofguestaleshasrefreshedourcaskaleofferbyintroducingmorechoiceandtheopportunitytoexperimentwithnewbrands.Afocusonstafftrainingandsamplinginitiativeshasensuredthatmoreandmorepeoplearerediscoveringcaskale.

Thefinalandmostimportantingredienttorunningsuccessfulpubsispeople.Weprideourselvesonrecruitingthebestpeopleintheindustryandonthelearninganddevelopmentopportunitiesweprovide,andour“PassporttoManagement”schemehasresultedinuspromotingover40%ofourmanagersfromwithinthecompany.Ourheadoffice,RiversideHouse,isaBIIaccreditedcentrewherewerunmanyindustryrecognisedcourses,focusingoncustomercare,staffdevelopment,productknowledge,businessplanning,aswellasensuringthatwearecompliantwiththehigheststandardsofhealthandsafety,foodhygieneandotherlegislation.Trainingalsoplaysapivotalrole,combiningskillsetstosupportpubmangersasandwhentheyopentheirpubsfollowingamajorrefurbishmentorfollowinganacquisition.

TheclimaxoftheyearforourretailstaffisourannualAwardCeremony.HeldeveryMarch,itrecognisesthetalentwehavewithinourbusiness.Forthesecondyearrunning,OisinRogersattheShipinWandsworthwonourRetailManageroftheYearaward,recognisinganotherexcellentperformanceatthisremarkablepub.Wewouldliketotakethisopportunitytothankallofourstaffacrossthebusinessfortheirhardworkthroughout2011.

Tenanted housesAttheendoftheyearourtenantedestatecomprised97pubs.Revenueandoperatingprofitweremarginallyaheadat£14.4millionand£5.4millionrespectively.Likeforlikeperformancewasup1.2%intermsofsalesand1.9%inoperatingprofit.

Thetenantedmarketisundoubtedlyprovingmuchtougherthanthemanagedoneinthecurrenteconomicclimatewithhighvacancyratessufferedbymanyofourpeers.Whilstitisnotimmune,oursouthern,principallyLondonestate,providessomeprotectionfromtheworstimpactoftheseproblems,andallourtenantedpubsareopenforbusiness,duemainlytotheflexiblepackagesweoffer.Wells&Young’scontinuestoprovideanexcellentrangeofbeerbrandscomplementedbyabroaderselectionofguestales.Thewinerangehasbeenextendedandhasdrivenvolumeimprovements.Thetrainingcoursesweprovidecentrallyhavealsoprovedpopularwithtenants.

Thisyearweinvestedintotal£1.5milliononanumberofourexistingpubsand£0.8millionononenewacquisition,theWhiteHartinWitley.Thisyear’sdevelopmentsincludedtheAbercornArmsinTeddington,Queen’sArmsinKilburnandtheGrandUnionpubinWandsworthandeachhasmadeapromisingstartpostinvestment.

WedisposedoftheCockInninBoughtonMonchelsea,WheatsheafinWandsworthandtheShakespeareinRichmond,andwetransferredtwositestothemanagedestate.

Wells & Young’sWells&Young’s,our40%brewingassociate,hashadagoodyearandhascontributed£2.6milliontoYoung’sadjustedprofitbeforetax.Itsfutureprofitabilitywillbeimpacted,aspreviouslyreported,bythemanagementoftheCoronaExtraandRedStripebrandsmovingbacktotheirrespectivebrandowners.Wells&Young’sisnowfocusedondrivingitsownbrandsandfocusingonoperationalefficienciesinordertominimiseanyprofitshortfall,whilstremainingopentobringingnewbrandsintothebusinesswherethetermsareattractive.

Investment and financeRevenueincreased11.8%to£142.6milliondrivenbyacombinationoforganicgrowth,individualacquisitionsandfrom16weeks’benefitofGeronimo’strade.Operatingprofitbeforeexceptionalitemsgrewby7.1%to£21.7million.Geronimoisexpectedtohaveamuchbiggerimpactonnextyear’sprofitswhenitwillhavetradedforafulltwelvemonthsandasthebenefitofcombiningtheheadofficesandtheothersynergiesworkthrough.


Chief Executive’s report (continued)


Inadditiontothe£60.0millionweinvestedinacquiringGeronimo,weinvestedafurther£15.2milliononourexistingbusinessand£3.4milliononGeronimopostacquisition.Wedisposedoffourpubsfor£3.3millionataprofitof£0.5million.

Attheendoftheyear,ournetdebtincreasedby£60.0millionto£122.6million,primarilytheresultoftheGeronimoacquisition.Interestcostswere£1.3millionhigherat£4.0million,adirectresultoftheincreaseddebtforthe16weekssincetheacquisition.Ouryearenddebtbenefitedfromapositivematerialworkingcapitalmovementwhichwillreversenextyear.

Profitbeforetaxwas£15.3millionandbasicearningspersharewere36.97pbut,onceadjustedforexceptionalitems,grewby7.2%to£20.8millionandby13.7%to32.65prespectively.Ourtradingperformanceunderpinstheproposed2.0%increaseinthefinaldividendpershareof6.90p.Thetotaldividendfortheyearis13.26p,anincreaseof2.0%whichiscovered2.5timesbytheadjustedprofit.

Wehaveadjustedtheprofitsforthefollowing£5.0millionofexceptionalcosts(£4.9millioninYoung’sand£0.1millioninourassociate,Wells&Young’s)ofwhich£1.9millionarenoncash:

•Acquisitioncostsof£2.0millionincludelegalandprofessionalfeesandstampduty,incurredonthepurchaseofGeronimo,theLassO’RichmondHill,WhiteHartinWitleyandtheLionandUnicorninKentishTown.ThesehavebeenwrittenoffasoperatingexceptionalitemsinthecurrentyearduetotheadoptionofIFRS3:Businesscombinations(Revised).

•Integrationcostsof£1.1millionwhichareoneoffitemsofexpenditureincurredinordertocombinetheGeronimobusinesswiththatofYoung’s.

•Hotelprojectfeesof£0.2millionthatrelatedtoextensiveworkcarriedouttoidentifyopportunitiesatselectedpubs.Wehavebeensuccessfulinidentifyingspecificopportunitiesandobtainedplanningpermissiontodevelopthem;wherethiswasnotthecase,adecisiontowriteofftheresearchcostswastaken.Thesearethelastofsuchcosts.

•Thecapitalgainstaxprovisionof£0.2millionforthesharesheldintheEmployeeShareOwnershipScheme.Aliabilityisrecognisedateachbalancesheetdateforthepotentialcapitalgainstaxthatcouldariseonthedisposalofsharestothemembersoftheschemeonretirement.

•Anoncash£1.9millionimpairmentinpubvaluesanda£0.5millionprofitonsalesoftheParrotinCanterbury,CockInninBoughtonMonchelsea,ShakespeareinRichmondandtheWheatsheafinWandsworth.

Asaresultofdeficitreductioncontributionsfromthecompany,goodinvestmentperformanceandfavourablemembershipmovements,ourpensiondeficitimprovedduringthecourseoftheyearby£6.5million.Attheyearend,thedeficitwas£7.6million(2010:£14.1million).

TheacquisitionofGeronimowasfinancedwithanew£100millionfiveyearbankfacilitywiththeRoyalBankofScotlandandBarclays.Thesenewfacilitiescompriseanew£50milliontermloananda£50millionrevolvingcreditfacilitythatreplacesourexisting£40millionone.Thesenewfacilitiessitalongsideourexistinglongerdated£50milliontermloan.Wehaveenteredintosomeadditionalinterestrateswaps;together,ourswapseffectivelyfixourinterestratesatjustbelow5.0%on£100millionofourdebt.Withgearingof67.6%andourinterestcostscovered5.2timesbyouroperatingprofitbeforeexceptionalitemsandwithournetdebtequalto3.6timesourEBITDA,Young’shasarobustbalancesheetfollowingtheacquisitionandasoundlongtermfinancingpackageinplace.

Corporate and social responsibilityAsever,Young’scorporateandsocialresponsibilitiesaretakenveryseriously.

Weencourageregulardialoguebetweenourpubmanagersandtheirlocalresidentsaspartofourdeterminationtobeattheheartofeachcommunitywetradeinandweopenlysupportinitiativesaimedatpromotingtheresponsiblemanagementandoperationofalcohollicensedpremises.



Inordertoencourageresponsibleconsumptionofalcohol,weareworkingtowardsallofourmanagedhousesoperatingtheChallenge21scheme.Thisschemerequirescustomerstoprovideproofthattheyare18oroveriftheywishtopurchasealcohol.Inaddition,whereappropriate,mostpromotionalmaterialweusewithinourpubscarriesclearandconcisemessagesaboutsensibledrinking.Thevastmajorityofourpubmanagersattendconflictmanagementcoursessothattheyareabletohandleanydifficultsituationswithprofessionalismanddiligence.

InMarchthisyear,aspartoftheGovernment’sPublicHealthResponsibilityDeal,wesigneduptovariousalcoholandhealthatworkmeasuresdesignedtohelpimprovepublichealth.Werecognisetherolethatthealcoholindustryhastoplayhereandlookforwardtoplayingourpart.

Wearecontinuallylookingtoreducetheimpactouroperationscanhaveontheenvironment.Particularfocusthisyearhasbeenonrecyclingwherewehaveonceagainincreasedthenumberofmanagedhousesthatactivelyrecyclefood,glassandmixedwaste.Wehavecontinuedtoworkonreducingourcarbonfootprintandhavenowreplacedordinarylightbulbswithlow-energyonesinthemajorityofourmanagedpubsandhalf-hourelectricitymetershavebeeninstalledinallofthem.Apositivesafetycultureexistswithinthegroup.Withhelpfromanaccreditedoutsideconsultant,regularhealthandsafetychecksareperformedinourmanagedestate,leadingtoasafeandsecureenvironmentforourcustomersandstaff.

Current trading and outlookThecurrentyear,our180th,willbringafullyear’sbenefitfromlastyear’sinvestments,inparticulartheacquisitionofGeronimo,offsetbytherelatedextra

interestcosts.Themanagedtradeforthefirstsevenweekshasbeenverystrong,benefitingfromthespringweather,up34.2%intotal(includingGeronimo)andup8.8%onalikeforlikebasis.

Wehavethreenewsitesexpectedtoopeninthecurrentyear.TheCowinthenewWestfieldshoppingcentreinStratfordisduetoopenasaGeronimopubinSeptemberandiswelllocatedtotakefulladvantageofthefollowingyear’sOlympics.ThePloughatClaphamJunctionandtheWheatsheafinBoroughMarketareduetore-openasYoung’smanagedhousesinthesecondhalfoftheyear.

Overall,webelievethatthequalityandgrowthpotentialofourestatewillhelpustomitigatetheeffectofwhatremainsaveryfragileeconomicrecovery.

IwouldliketofinishbyrecognisingtheoutstandingcontributionmadetoYoung’soverfourdecadesbyChrisSandland,ourChairmanwhoretiresthissummer.ChristookontheroleofChairmanin2006atapivotaltimeinourdevelopment,andhasledusverysuccessfullyintoanewera.Iknowthatshareholders,myfellowboardmembers,andcolleaguesfromacrossthecompanywillwanttojoinmeinthankinghimforeverythinghehasdoneforYoung’soverthepast37years,andtowishhimaverylongandhappyretirement.Lookingahead,IamdelightedthatNickBryanhasagreedtosucceedChrisasChairman.Heisextremelyexperienced,hasplayedahugelyvaluableroleasanon-executivedirectoroverthepastfiveyears,andIamverymuchlookingforwardtocontinuingtoworkwithhiminthefuture.

Stephen GoodyearChief Executive25 May 2011


Christopher Sandland, A.C.M.A., M.Sc. Non-executive Chairman

Joinedin1973asmanagementaccountant,subsequentlyworkinginavarietyofrolesincludingcompanysecretaryandpersonneldirector.GraduatedMSc(nowMBA)fromLondonBusinessSchoolin1981.RetiredasanexecutivedirectorinApril2006.Appointednon-executivedirectorinJuly2006andnon-executivechairmaninOctober2006.Aged62.

Torquil Sligo-Young Human and Information Resources

Joinedin1985.Heldanumberofseniorpositionsindifferentareasofthecompanybeforebeingappointedtotheboardin1997.Hasoverallresponsibilityforpersonnel,healthandsafetyandthecompany’stechnologicalneeds.PreviouslyworkedforstockbrokersBell,Lawrie,Macgregor&Co.Aged51.

Peter Whitehead, F.C.A. Finance

Joinedthecompanyandtheboardasfinancedirectorin1997.OntheboardofWells&Young’sBrewingCompanyLimited.QualifiedasacharteredaccountantwithKPMGin1988,becomingafellowoftheInstituteofCharteredAccountantsin1998.PreviouslyworkedforFuller,Smith&TurnerP.L.C.(1990-97).Aged49.

Stephen Goodyear Chief Executive

Joinedin1995assalesdirector.Appointedtotheboardin1996assalesandmarketingdirector.Appointedchiefexecutivein2003.OntheboardofWells&Young’sBrewingCompanyLimited.PreviouslyworkedforCourageLtd(1974-95)inanumberofseniorroles,mostrecentlybusinessunitdirector.Aged55.

Roger Lambert, M.A.Non-executive

Appointedtotheboardin2008.Memberofthecompany’sauditandremunerationcommittees.ChairmanofCorporateBroking,CollinsStewartsinceJanuary2010.Previouslyworkedfor26yearsincorporatefinanceatJPMorganCazenovewherehewasaseniormanagingdirectorwithresponsibilitiesforcorporateclientcoverageoftheconsumersector.Hasawealthofrelevantexpertiseinbrewing,drinksandhospitality,havingactedforover25companiesinthesector.Wasinvolvedinmanyofthemajortransactionsthatchangedtheindustryinrecentyearsanddevelopedconsiderableadvisoryexpertiseintheareaofsmall,familyandmediumsizedcompanies.Aged52.

David PageNon-executive

Appointedtotheboardin2008.Memberofthecompany’sauditandremunerationcommittees.Co-founderofTheClaphamHouseGroup,ownerofGourmetBurgerKitchenandotherrestaurantbrands.PriortofoundingClaphamHouse,spent27yearswithPizzaExpressplc;initiallyasmanagingdirectorofthelargestfranchiseegroup,becomingchiefexecutiveoftheholdingcompanyin1993,chairmanin1998andreturningtothepostofchiefexecutivein2002.Non-executivedirectorofVictoryVCTplc.Aged58.

Rupert ClevelyManaging Director Geronimo Inns

Joinedthecompanyandtheboardin2010.HasoverallresponsibilityforthemanagementanddevelopmentstrategyofGeronimoInnswhichheco-foundedandwherehehasdriventhebusinessforthepast10years.PreviouslyworkedatVeuveClicquotChampagnewhereheheldthepositionofworldwidemarketingdirectorandmanagingdirectorUK(1990-2000).Age53.

Nicholas Bryan, B.A., F.C.A.Non-executive and Senior Independent Director

Appointedtotheboardin2006.Memberandchairmanofthecompany’sauditandremunerationcommittees.Co-founderandchiefexecutiveoftheInnserveGroup.Hasawealthofexpertiseinthehospitality,propertyandbrewingsectorsgainedthroughvariouspositionswithinCourage(includingmanagingdirectorofCourageUK(1992-95)).Hasheldotherchairmanandnon-executivedirectorroleswhileamanagementcommitteememberofInvestcorp(1995-2001).BeganhiscareerinfinanceasacharteredaccountantandwithpositionsatLonrhoandHanson.Aged58.

Patrick Dardis Retail

Joinedin2002andappointedtotheboardin2003.HasoverallresponsibilityfortheoperationoftheYoung’smanagedestateaswellasYoung’smanagedhousepubacquisitionsanddevelopments.PreviouspositionshaveincludeddirectorofretailoperationsatWolverhampton&DudleyPLC,businessdevelopmentwithGuinnessBrewingandretailmanagementwithWhitbreadPLCandCourageLtd.Aged52.

The board of directors


Thedirectorspresenttheirannualreport,andtheauditedfinancialstatements,forthefinancialperiodended4April2011.

Inthisreport,referencetothe“company”orto“Young’s”istoYoung&Co.’sBrewery,P.L.C.,andreferencetothe“group”istothegroupofcompaniesofwhichYoung’sistheparentcompany.

TheChairman’sstatement(onpages2and3)andtheChiefExecutive’sreport(onpages5to10)bothformpartofthisreport.

Principal activitiesThegroup’sprincipalactivitiesaredescribedintheChiefExecutive’sreport.

Business reviewAreviewofthegroup’sbusinessiscontainedintheChairman’sstatementandintheChiefExecutive’sreport.Noimportanteventsaffectingthegrouphaveoccurredsincetheendoftheperiod.

Key performance indicatorsTheboardmeasuresthedevelopment,performanceandpositionofthegroup’sbusinessbyreferencetothefollowingfactors:

• Adjusted profit before tax:thisistheprofitbeforetaxoncontinuingoperationsonly,adjustedtoexcludeanyexceptionalitemsforthegroupanditsassociate.Seenote14.

• Adjusted earnings per share:thisistheadjustedprofitbeforetaxdetailedabove,butaftertaxhasbeendeducted,dividedbytheweightedaveragenumberofordinarysharesinissue.Itprovidesausefulstatistictocomparewithasharepriceordividend,forinstance.

• Like for like revenue:thisissameoutletlikeforlikerevenuegrowthforthisperiod(adjustedfrom371to366days)comparedwiththelastperiod(366days)forthepubsthattradedthroughoutbothperiods.

• RevPar:thisisthegroup’srevenueperavailablebedroom.Itistheaverageroomrateachievedmultipliedbytheoccupancypercentage.

• EBITDA (Earnings before interest, taxes, depreciation and amortisation) by business segment:thisprovidesusefulinformationindeterminingthevalueoftheunderlyingassets.

• Interest cover: thisisthegroup’soperatingprofitbeforeexceptionalitems,dividedbythefinancecosts.

• Gearing:thisisthegroup’snetdebt,dividedbythegroup’snetassets.

Bothinterestcoverandgearingareusefultoolsindeterminingwhetherthebusinesscanmaintainitscurrentlevelofdebtoritscapacitytoincreasethatlevel.

Theperformanceofthebusiness,measuredbyreferencetothesefactors,isshownintheChiefExecutive’sreportandinthefinancialhighlightsonpage1.

Profit and dividendsTheprofitfortheperiodattributabletoshareholderswas£17.8million.Thedirectorsrecommendafinaldividendfortheperiodof6.90ppershare.SubjecttoapprovalattheAGM,thisisexpectedtobepaidon14July2011toshareholdersontheregisteratthecloseofbusinesson10June2011.Whenaddedtotheinterimdividendof6.36ppershare,thiswillproduceatotaldividendfortheperiodof13.26ppershare.

Annual general meeting NoticeconveningtheAGMandanexplanationoftheresolutionsbeingproposedaresetoutonpages56to61.

Likely future developments Anindicationoflikelyfuturedevelopmentsinthegroup’sbusinessiscontainedintheChiefExecutive’sreport.

Principal risks and uncertaintiesTheprincipalrisksanduncertaintiesfacingthegrouparelistedbelow.Itisnotanexhaustivelistofallsignificantrisksanduncertainties.Somerisksmaycurrentlybeunknownandotherrisks,currentlyregardedasimmaterial,couldturnouttobematerial.

Reduced consumer spending Thegroup’srevenueislargelydependentonconsumerspendingwhichcanbeaffectedinnumerousways;examplesincludethegeneraleconomicenvironmentandterroristactivity.Attitudestovarioussocialfactorsarerelevanttoo,asisconsumers’heightenedawarenessofahealthylifestyleandthepotentialadversehealthconsequencesassociatedwithmisuseofalcohol.Consumersalsohaveawiderangeofchoiceofwheretospendtheirmoney,whetherthisisatthegroup’spubsandhotels,atthoseofitscompetitorsoratofflicences,supermarketsandtakeaways,oratcompetingleisureattractionssuchascinemas.Focusingontheindividualityofeachofthegroup’soutletsandbeinglocatedthroughoutLondonandsouthernEnglandhelpsmitigatethisrisktoadegree;thegroupalsoseekstominimisethisriskfurtherwithitscustomerfocuseddesigns,highservicestandardsandqualityfoodandmarketleadingdrinks.Spendinginthegroup’spubsandhotelsisalsoaffectedbytheweather;traditionally,theytendtobebusierinthesummerandonwarm,sunnydays,especiallythosewithoutsideareas.Holidayperiodssuch

Directors’ report


asChristmas,NewYearandbankholidaysalsotendtobebetterfortrade.Recognisingthis,thegroupseekstoexploititsexcellentlocationsandofferingstoaddresstheimpactofseasonality,whereverpossible,bycapturingdemandinbusyperiodsandencouragingcustomerstovisitinquieterperiods.

Suppliers: drink, food and utilities Thegroupreliesonanumberofsuppliersfordrink,foodandotherservicestoitspubsandhotels.Partofthegrouphasanexclusiveagreementwithitsassociate,Wells&Young’s,forthesupplyofdrinkstoitspubestate.Thegroupalsohasanumberofarrangementswithfoodsuppliers,includingitsownmajorityownedsubsidiary,StickyFingersFoodLimited.Intermsofbothdrinkandfood,thegroupremainsexposedtotheriskofpriceincreasesandtotheriskofinterruptionorfailureofsuppliersresultinginproductsnotbeingdeliveredontimeortothestandardexpected.Itattemptstomitigatethisriskbyenteringintofixedpricearrangements,byregularlyreviewingthesuppliersituses,byhavinginformalarrangementsinplacesuchthatsubstitutesuppliersorproductscouldbeusedifrequiredandbyhavingsafetymeasuresinplacewhichseektoensureproductintegrityismaintainedwhereverpossible.Thegroupusesalargeamountofelectricityandgasandisthereforeparticularlysubjecttofluctuationsintheircost.Tohelpcounterthis,thegroup’sneedsandpricechangesinthemarketarereviewedregularlyand,whereappropriate,itmakesforwardpurchases;itisalsocontinuallylookingatwaysofpromotingfurtherefficienciesinenergyconsumption.

LicensingLocalresidents,thepoliceandotherrelevantagencieshavearighttoaskthelocalauthorityforanypremiseslicencetobereviewedatanytimeiftheybelievethatanyoftheGovernment’slicensingobjectivesisbeingcompromised.Asaresultofsuchreview,thelocalauthoritycanattachfurtherconditionstothelicence,reducetradinghours,callforachangeinthepubmanagementorultimatelysuspendorrevokethelicence.Penaltiesfornonobservanceofcertainaspectsofthelicensinglawscanalsobesevere,includingthepossibilityofalicencebeingsuspended.Thegrouphastrainingprogrammesinplacewhichhavebeendesignedtoachievecompliancewiththeselawsandhavethegroup’spubsandhotelsruninaresponsiblemanner,therebyminimisingsomeoftheserisks.

Localism billTheGovernmentislookingtointroducelegislationthatwillallowcommunitiestoseek“protectedstatus”forlocallyimportantcommunityassets,whichcouldincludethegroup’spubsandhotels.So,ifapuborhotelbecomes“protected”andthegroupwantstodisposeofitontheopenmarket,thesalecouldbedelayedwhilecommunity

groupsaregivenachancetoraisefundstobidforit.Thetimetableandprocessforthiswillbesetbylocalauthorities.Atthisstage,itisnotpossibletopredictthelikelyimpactofthisonthegroup.

Other regulationChangesinregulationcanhaveasignificantimpactuponthegroup’sbusiness.Inadditiontothosealreadymentioned,otherexamplesincludeincreasesintheminimumwageandtheproposedmovetoplasticglasses.Thegroupseekstomitigatethesethroughcontinualconsiderationofoperatingprocedurestoensureanycostincreasesarisingfromsuchchangescanbemitigatedthroughincreasesinproductivity.AsamemberoftheBritishBeerandPubAssociation(“BBPA”),italsoseekstoensurethattheimpactofanynewlegislationisconsideredwellinadvanceofitsintroductionandthatplansareputinplacetoaddressanyrequiredchangesinadvanceofanyimplementationdate.Inaddition,itworkswithanoutsidethirdpartyinensuringchangesinhealthandsafetypracticesandproceduresareincorporatedintothebusinessandreviewedonaregularbasis.

TaxationAnumberoftaxrelatedmattersaffectthegroup,includingbusinesstaxes,dutyonalcoholicbeveragesandpropertyrates.Again,asamemberoftheBBPA,thegroupseekstoensurethatappropriateactionistakentominimisetaxrelatedrisks.Italsoregularlyreviewsitsoperatingprocedurestoidentifywaysinwhichtheimpactoftaxrelatedcostincreasescanbelessenedthroughproductivityincreasesorothercostreductions.

PensionsThegroupoperatesadefinedbenefitscheme:theYoung&Co.’sBrewery,P.L.C.PensionScheme.Itsoperationgivesrisetovariousfundingrisks,themainoneofwhichisthevariabilityoftheamountofcontributionsrequiredtobepaidtoitbythegroupinordertoaccountforpastservicebenefitdeficitsandfutureservicebenefitaccruals.These,inturn,areimpactedatanypointintimebychangesinlifeexpectancyassumptions,theperformanceofthestockmarketandbondyields.Theschemehasbeenclosedtonewentrantsforanumberofyearsandthegroupmakesadditionalcontributionsoverandaboveregularservicecontributionsinordertoaddresspreviousfundingdeficits.Thegroupalsomaintainsaclosedialoguewiththescheme’strustee.

PeoplePeopleplayakeypartinhelpingthegroupmaintainitspremiumpositionwithinthepubsector.This,andthegroup’sabilitytoachieveitsstrategicandoperationalobjectives,couldthereforebeaffectedifthegroupisunabletoattract,retain,developandmotivatethebestpeoplewiththerightcapabilitiesthroughouttheorganisation,


whetherthatbeinthepubs,hotelsorheadoffice.Therefore,significantinvestmentismadeinrecruitment,remunerationpackagesarecompetitive,rewardpoliciesareinplaceandcomprehensivetrainingisprovidedtoensurethatthegroup’speoplehavetherightskillstoperformtheirjobssuccessfullyandachievetheirfullpotential.

IT and telecomsThegroup,andparticularlyitsmanagedestate,isreliantonITsystemsforcommunication,salestransactionrecording,stockmanagement,purchasing,accountingandreportingandmanyofitsinternalcontrols.Anyfailureofthesesystemswouldcausesomedegreeofdisruptiontothebusinessandanyextendedperiodofdowntime,lossofbackedupinformationordelayinrecoveringinformationcouldaffectperformancesignificantly.Tohelpprotectagainstthis,informationisroutinelybackedupandthecompanyhasarrangementswiththirdpartyproviderstoassistwithdatarecoveryandbusinesscontinuity.Italsoregularlymonitorstheneedsofthebusinessandinvestsinnewtechnologyandservicesasnecessary.

FinanceNote23onpage47containsanindicationofthegroup’sexposuretocertainfinancialrisks.

Regulation of tied pubsIn2010,theBusiness,InnovationandSkillsCommitteeannouncedthatitwouldrecommendtheintroductionofregulatorylegislationifcertainproblemsdiscussedinits2004and2009reports(includingtheperceived“unhealthyandunbalanced”relationshipbetweenpubcompaniesandtheirlessees)persistedbeyondJune2011.Asaresult,theBBPAintroducedaFrameworkCodeofPractice,implementingcomprehensivereformsonhowtiedagreementsoperateinthepubtrade,andtheRoyalInstitutionofCharteredSurveyorsissuedrevisedguidanceclarifyingtheproceduresrelatingtorentassessments.Despitethecompany’stenancyagreementsalreadyaddressinganumberoftheperceivedissues,itcreateditsowncode,builtontheFrameworkCode;thiswasaccreditedinJune2010bytheBenchmarkingandAccreditationServicesoftheBritishInstituteofInnKeeping.Atthisstage,itisnotpossibletopredictwhetherfurtherregulationwillbeintroducedand,ifso,itseffectonthecompany’stenanteddivision.

Financial instrumentsThegroup’sfinancialriskmanagementobjectivesandpoliciesaresetoutinnote23onpage47.

Payment of suppliersThecompany’spolicyistopaythosepersonswhoareormaybecomeitssupplierspromptlyattheendofthemonthfollowingthemonthinwhichinvoicesarereceived,providedalltradingtermsandconditionshavebeencompliedwith.Asat4April2011,theaggregateamountowingtotradecreditors(seenote22onpage46)wasequivalentto59days’averagepurchasesfromsuppliers(2010:42days).

Going concernThisreportcontainsareviewofthegroup’sbusiness,togetherwithalistofprincipalrisksanduncertaintiesfacingthegroup.Thefinancialpositionofthegroup,itscashflows,liquiditypositionandborrowingfacilitiesaredescribedwithinthefinancialstatements.Note23onpage47summarisesthegroup’scapitalmanagementandprincipaltreasuryobjectivesandsometoolsitusestomonitorandmanageitsexposuretocertainfinancialrisks(includingcreditriskandliquidityandcashflowrisk).Thegrouphasapredominantlyfreeholdbackedbalancesheetandcommittedfacilitiesof£150millioninplace,noneofwhichneedtobereneweduntilDecember2015.Thedirectorsbelievethatthegroupiswellplacedtomanageitsbusinessriskssuccessfullydespitethecurrentuncertaineconomicoutlookandtheyhaveareasonableexpectationthatthecompanyandthegrouphaveadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.Accordingly,theycontinuetoadoptthegoingconcernbasisinpreparingtheannualreportandfinancialstatements.

Directors’ report (continued)


DirectorsNames and brief biographical detailsThenamesandbriefbiographicaldetailsofthecurrentdirectorsareonpage11.ApartfromRupertClevely(whojoinedtheboardon16December2010),allofthemweredirectorsthroughouttheperiod;nootherpersonwasadirectorduringtheperiod.

Length of appointmentsEachoftheexecutivedirectorshasbeenappointedforanindefiniteperiodandtheperiodofnoticerequiredtobegiventoterminatehisappointmentisasfollows:

Name Minimum period of Minimum period of notice from Young’s notice from the executive

StephenGoodyear oneyear sixmonths

TorquilSligo-Young oneyear sixmonths

PeterWhitehead oneyear sixmonthsifgivenonorafter 22February2012,otherwiseoneyear

PatrickDardis oneyear oneyear

RupertClevely oneyeartobegivenonorafter oneyeartobegivenonorafter 16December2012 16December2012

NocompensationispayablebyYoung’sforearlytermination.

Eachofthenon-executivedirectorsispartwaythroughathreeyearterm:ChristopherSandland’sexpireson4July2012,NicholasBryan’son17July2012andbothRogerLambert’sandDavidPage’son31July2011.

Re-appointmentUnderthecompany’sarticlesofassociation,ateveryAGMthefollowingautomaticallyretirefromofficebutmayofferthemselvesforre-appointment:

• anydirectorwhoheldofficeatthetimeofthetwoprecedingAGMsbutdidnotretireateitherofthem–thisdoesnotapplytoanydirectoratthisyear’sAGM;and

• anydirectorappointedbytheboardsincethelastAGM–thisappliestoRupertClevelyatthisyear’sAGM.

RupertClevelyisseekingre-appointmentandhisbriefbiographicaldetailsareonpage11.

RemunerationDetailsofeachdirector’sremunerationappearinnote8(c)onpage35.Nodirectorisinvolvedindecidinghisownremuneration.Theremunerationoftheexecutivedirectorsisdeterminedbythecompany’sremunerationcommittee;theremunerationofthenon-executivedirectorsisdeterminedbytheexecutiveboard.Noneoftheexecutivedirectorsreceivesremunerationasanon-executivedirectorelsewhere.

Qualifying indemnity provisions Thecompany’sarticlesofassociationcontainsanindemnityprovisioninfavourofthedirectors;thisprovision,whichisaqualifyingthirdpartyindemnityprovision,wasinforcethroughouttheperiodandisinforceatthedateofthisreport.AdditionalindemnityprovisionsinfavourofRupertClevelyaredescribedinnote28;thoseprovisions,whicharequalifyingthirdpartyindemnityprovisions,wereinforcewitheffectfrom16December2010andareinforceatthedateofthisreport.


Non-voting Asat Ashares shares

ChristopherSandland(i)-(iv) Beneficialandfamily 4 April 2011 165,340 – 29March2010 165,340 –

StephenGoodyear(i)-(iv) Beneficialandfamily 4 April 2011 111,004 – 29March2010 111,004 –

TorquilSligo-Young(i)-(iv) Beneficialandfamily 4 April 2011 240,971 14,000 29March2010 240,971 14,000 Trustee 4 April 2011 3,317,972 111,436 29March2010 3,317,972 111,436

PeterWhitehead(i)-(iv) Beneficialandfamily 4 April 2011 50,000 – 29March2010 60,000 –

PatrickDardis(i)-(iv) Beneficialandfamily 4 April 2011 12,280 – 29March2010 19,558 –

RupertClevely(ii) Beneficialandfamily 4 April 2011 80,756 – 29March2010 – –

NicholasBryan Beneficialandfamily 4 April 2011 8,505 – 29March2010 – –

RogerLambert Beneficialandfamily 4 April 2011 1,000 1,000 29March2010 1,000 1,000

DavidPage Beneficialandfamily 4 April 2011 3,278 – 29March2010 – –

Directors’ holdings and interestsTheinterestsofthedirectorswhoheldofficeattheperiodend(andtheirimmediatefamilies)inthesharecapitalofthecompanyareshowninthetablebelow.AnyaccruedentitlementtoAsharesunderthecompany’sprofitsharingschemeisshownseparatelyinnote8(e)onpage36.


Alsointerestedin:(i) Nil(2010:706,800)AsharesheldintrustbyRamBreweryTrusteesLimited(ii) 869,412(2010:930,560)AsharesheldintrustbyRBTIITrusteesLimited(iii)Nil(2010:286,800)AsharesheldintrustbyTorquilSligo-Youngandtwoothertrustees(iv)726,906(2010:nil)AsharesheldintrustbyYoung’sPensionTrusteesLimited.

Corporate governanceTheboardiscommittedtogoodcorporategovernanceinthemanagementandoperationofthegroup’sbusiness.

The board Thebusinessandmanagementofthegroupisthecollectiveresponsibilityoftheboard.Ateachmeeting,theboardconsidersandreviewsthegroup’sfinancialandtradingperformance.Ithasaformalwrittenscheduleofmattersreservedforitsreviewandapproval;thisincludesmatterssuchasstrategy,longtermobjectivesandmajorfinancialandkeyoperationalissues.Theboardmeetseverytwomonthswithadditionalmeetingsarrangedasrequired;itmetninetimesduringtheperiod.Formalagendasandreportsareprovidedtotheboardonatimelybasis,alongwithotherinformationtoenableittodischargeitsduties.Alldirectorshaveaccesstoindependentprofessionaladviceatthecompany’sexpenseandtotheadviceandservicesoftheCompanySecretary.ThereisacleardivisionofresponsibilitybetweentheChairman(whoisresponsiblefortheeffectiverunningoftheboard)andtheChiefExecutive(whohasoverallresponsibilityfortherunningofthebusiness).

IndependenceTheboardregardsallfourofitsnon-executivedirectorsasindependent;theboardviewsindependenceasanattitudeofmindandamatterofstrengthofcharacter.

CommitteesTheboardhasfourstandingcommittees:executive,audit,remunerationanddisclosure.

• ExecutivecommitteeTheexecutivecommitteecomprisestheexecutivedirectorsandischairedbyStephenGoodyear,theChiefExecutive.Itusuallymeetsonaweeklybasisandisresponsibleforthedailyrunningofthegroupandtheexecutionofapprovedpoliciesandthebusinessplan.Membersofthecompany’sseniormanagementareinvitedtoattendasappropriate.

• AuditcommitteeTheauditcommitteecomprisesNicholasBryan,whochairsit,RogerLambertandDavidPage.Itassiststheboardinfulfillingitsoversightresponsibilities;itsprimaryfunctionsaretomonitortheintegrityofthecompany’sfinancial


statementsandinternalcontrolsystems(includingriskmanagement),tooverseethecompany’srelationshipwithitsexternalauditorandtoreviewtheeffectivenessoftheauditprocess.Thecommittee’stermsofreference,whichsetoutinfullitsresponsibilities,canbefoundintheinvestorrelationssectionofwww.youngs.co.uk.

• RemunerationcommitteeTheremunerationcommitteecomprisesNicholasBryan,whochairsit,RogerLambertandDavidPage.Itsprimaryfunctionistodetermine,onbehalfoftheboard,theremunerationpackagesoftheexecutivedirectors.Thecommittee’stermsofreference,whichsetoutitsotherresponsibilities,canbefoundintheinvestorrelationssectionofwww.youngs.co.uk.

• DisclosurecommitteeThiscomprisestheexecutivedirectorsandischairedbyPeterWhitehead,theFinanceDirector.Itassiststhecompanyinmakingtimelyandaccuratedisclosureofinformationrequiredtobedisclosedinordertomeetlegalandregulatoryobligations.Thecommittee’stermsofreference,whichsetoutitsotherresponsibilities,canbefoundintheinvestorrelationssectionofwww.youngs.co.uk.

• NominationcommitteeInpractice,theChairmanandtheChiefExecutiveleadontheboardnominationandappointmentprocess.Theyconsiderthebalanceofskills,knowledgeandexperienceontheboardandmakeappropriaterecommendationsforconsiderationbytheboard.Thisformalbutunwrittenprocesshasbeenusedeffectivelyforanumberofyearsandhasledtheboardtoremainoftheviewthatitshouldcontinuetooperateinthiswayratherthanthroughamoreformalnominationcommittee.

Internal controlTheboardhasoverallresponsibilityfortheinternalcontrolsystemandforreviewingitseffectiveness.Theexecutivedirectorsimplementandmaintaintheriskmanagementandinternalcontrolsystems.Theauditcommitteeassiststheboardinfulfillingitsoversightresponsibilitiesbymonitoringthesystem’sintegrity.Thesystemofcontrolhasbeendesignedtomanagerisk;itcannoteliminateitandthereforeprovidesreasonable,notabsolute,assuranceagainstmaterialmisstatementorloss.

Relations with shareholders and investorsCopiesoftheannualreportandthefinancialstatementsandtheinterimreportaresenttoallshareholdersandcopiesareavailableatwww.youngs.co.uk.Thecompany’swebsitealsoprovidesotherinformationforshareholdersandinterestedparties.WrittenoremailedenquiriesarehandledbytheCompanySecretary.ShareholdersaregiventheopportunitytoaskquestionsandraiseissuesattheAGM;thiscanbedoneformallyduringthemeetingorinformallywiththedirectorsafterit.TheChiefExecutive

andtheFinanceDirectormeetwithinstitutionalinvestorsandanalystsaftertheannouncementoftheinterimandyearendresults.Additionalmeetingswithinstitutionalinvestorsand/oranalystsarearrangedfromtimetotime.

EmployeesConsiderableimportanceisplacedoncommunicationswithemployeesandso,withinthelimitationofcommercialconfidentialityandsecurity,Young’sprovidedthemwithinformationconcerningtrading,developmentandotherappropriatematters.Itdidthisatmanylevelsthroughoutthebusinessonbothaformalandinformallevel,includingthroughmanagementpresentations.Italsoconsultedregularlywithemployeesandtheirrepresentatives,therebyenablingtheboardtohaveregardtotheirviewswhenmakingdecisionslikelytoaffecttheirinterests;inconnectionwiththis,Young’scontinuedtooperateaninformationandconsultationcommittee,withitsmembersbeingdrawnfromdepartmentsbasedatitsheadofficeinWandsworth.Thecompany’sintegratedappraisalanddevelopmentprocess,designedtoimprovecommunicationsandcompanyperformance,remainedinplace,andthecompanycontinuedtooperateabonusschemeforeligibleemployees.Young’smaintaineditspolicyofgivingfullandfairconsiderationtoallapplicationsforemployment,includingthosemadebydisabledpeople,takingaccountoftheapplicant’sparticularaptitudeandability;ofseekingtocontinuetoemployanyonewhobecomesdisabledwhileemployedbythecompanyandarrangingtraininginaroleappropriatetotheperson’schangedcircumstances;andofgivingallemployees,includingdisabledemployees,equalopportunitiesfortraining,careerdevelopmentandpromotion.

DonationsThegroupmade£2,177ofcharitabledonationsandalsosupplied£1,084ofgoods.Inaddition,throughouttheyear,thegroup’scustomers,pubmanagersandothermembersofstaffwereinvolvedinavarietyofinitiativesandfundraisingactivities.Nopoliticaldonationsweremade.

Notification of major holdings of voting rightsAsat24May2011,thecompanyhadbeennotifiedofthefollowingholdingsof3%ormoreofthevotingrightsinthecompany:

GuinnessPeatGroupplc 15.05%ThomasYoung 14.31%JamesYoung 13.81%TorquilSligo-Young 11.99%LindsellTrainLimited 5.28%ElOroandExplorationCompanyplc 3.10%



Market value of land and buildingsThegroup’spropertieswerelastrevaluedin1997.AvaluationwasundertakenbyFleuret’sCharteredSurveyorsinNovember2006.Atthatdatethevaluationwas£173.8millionhigherthanthatrecordedasbookvalue.Basedontheirownjudgement,thedirectorsareoftheopinionthatthemarketvalueofthegroup’spropertiesissubstantiallyhigherthanthatrecordedasbookvalue.

Statement of certain responsibilities in relation to the financial statements and otherwiseForeachfinancialperiod,thedirectorsarerequiredtoprepareanannualreportandfinancialstatements.ThelattermustbepreparedinaccordancewithInternationalFinancialReportingStandards(“IFRS”)andapplicablelawandmustpresentfairlythefinancialpositionofthegroupandthefinancialperformanceandcashflowsofthegroupfortherelevantperiod.Thedirectorshaveelectedtoalsopreparethecompany’sfinancialstatementsunderIFRS.Inpreparingthestatements,thedirectorsmust:selectsuitableaccountingpoliciesandthenapplythemconsistently,statethatthegrouphascompliedwithIFRS(subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements)andpresentinformation,includingaccountingpolicies,inamannerthatprovidesrelevant,reliableandcomparableinformation.Thedirectorsareresponsibleforkeepingaccountingrecordswhichdisclosewithreasonableaccuracy,atanytime,thefinancialpositionofthegroupatthattimeandenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct2006.Theyarealsoresponsibleforsafeguardingtheassetsofthegroupandhencefortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.

Disclosure of information to auditorEachofChristopherSandland,StephenGoodyear,TorquilSligo-Young,PeterWhitehead,PatrickDardis,RupertClevely,NicholasBryan,RogerLambertandDavidPage,beingthepersonswhoweredirectorsatthetimewhenthisreportwasapproved,hasconfirmedthat,sofarashewasaware,therewasnoinformationneededbythecompany’sauditorinconnectionwithpreparingitsreportofwhichthecompany’sauditorwasunaware.Eachofthoseindividualshasalsoconfirmedthathetookallthestepsthatheoughttohavetakenasadirectortomakehimselfawareofanysuchinformationandtoestablishthatthecompany’sauditorwasawareofit.Thisparagraphistobeinterpretedinaccordancewithsection418oftheCompaniesAct2006.

Preparation and disclaimerThisannualreportandthefinancialstatementsfortheyearended4April2011havebeendrawnupandpresentedforthepurposeofcomplyingwithEnglishlaw.AnyliabilityarisingoutoforinconnectionwiththemwillalsobedeterminedinaccordancewithEnglishlaw.

By order of the board

Anthony SchroederCompanySecretary25May2011


Independent auditor’s report to the members of Young & Co.’s Brewery, P.L.C.

WehaveauditedthefinancialstatementsofYoung&Co.’sBrewery,P.L.C.fortheyearended4April2011whichcomprisetheGroupIncomeStatement,theGroupandParentCompanyStatementsofComprehensiveIncome,theGroupandParentCompanyBalanceSheets,theGroupandParentCompanyStatementsofCashFlow,theGroupandParentCompanyStatementsofChangesinEquityandtherelatednotes1to32.ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisapplicablelawandInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEuropeanUnionand,asregardstheparentcompanyfinancialstatements,asappliedinaccordancewiththeprovisionsoftheCompaniesAct2006.

Thisreportismadesolelytothecompany’smembers,asabody,inaccordancewithChapter3ofPart16oftheCompaniesAct2006.Ourauditworkhasbeenundertakensothatwemightstatetothecompany’smembersthosematterswearerequiredtostatetotheminanauditor’sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthanthecompanyandthecompany’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

Respective responsibilities of directors and auditorAsexplainedmorefullyintheDirectors’ResponsibilitiesStatementsetoutonpage18,thedirectorsareresponsibleforthepreparationofthefinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.OurresponsibilityistoauditandexpressanopiniononthefinancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland).ThosestandardsrequireustocomplywiththeAuditingPracticesBoard’sEthicalStandardsforAuditors.

Scope of the audit of the financial statementsAnauditinvolvesobtainingevidenceabouttheamountsanddisclosuresinthefinancialstatementssufficienttogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorerror.Thisincludesanassessmentof:whethertheaccountingpoliciesareappropriatetothegroup’sandtheparentcompany’scircumstancesandhavebeenconsistentlyappliedandadequatelydisclosed;thereasonablenessofsignificantaccountingestimatesmadebythedirectors;andtheoverallpresentationofthefinancialstatements.Inaddition,wereadallthefinancialandnonfinancialinformationintheAnnualReporttoidentifymaterialinconsistencieswiththeauditedfinancialstatements.Ifwebecomeawareofanyapparentmaterialmisstatementsorinconsistenciesweconsidertheimplicationsforourreport.

Opinion on financial statementsInouropinion:

• Thefinancialstatementsgiveatrueandfairviewofthestateofthegroup’sandoftheparentcompany’saffairsasat4April2011andofthegroup’sprofitfortheyearthenended;

• thegroupfinancialstatementshavebeenproperlypreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnion;

• theparentcompanyfinancialstatementshavebeenproperlypreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnionandasappliedinaccordancewiththeprovisionsoftheCompaniesAct2006;and

• thefinancialstatementshavebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006.

Opinion on other matter prescribed by the Companies Act 2006InouropiniontheinformationgivenintheDirectors’reportforthefinancialyearforwhichthefinancialstatementsarepreparedisconsistentwiththefinancialstatements.

Matters on which we are required to report by exceptionWehavenothingtoreportinrespectofthefollowingmatterswheretheCompaniesAct2006requiresustoreporttoyouif,inouropinion:

• adequateaccountingrecordshavenotbeenkeptbytheparentcompany,orreturnsadequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus;or

• theparentcompanyfinancialstatementsarenotinagreementwiththeaccountingrecordsandreturns;or

• certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmade;or

• wehavenotreceivedalltheinformationandexplanationswerequireforouraudit.

IainWilkie(Seniorstatutoryauditor)forandonbehalfofErnst&YoungLLP,StatutoryAuditorLondon25May2011

Notes:1.ThemaintenanceandintegrityoftheYoung&Co.’sBrewery,P.L.C.websiteistheresponsibilityofthedirectors;theworkcarriedoutbytheauditorsdoesnot

involveconsiderationofthesemattersand,accordingly,theauditorsacceptnoresponsibilityforanychangesthatmayhaveoccurredtothefinancialstatementssincetheywereinitiallypresentedonthewebsite.

2.LegislationintheUnitedKingdomgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.


2011 2010 53 weeks 52weeks Notes £000 £000

Revenue 6 142,597 127,539Operatingcostsbeforeexceptionalitems 7 (120,851) (107,232)

Operatingprofitbeforeexceptionalitems 21,746 20,307Operatingexceptionalitems 9 (4,883) (234)

Operating profit 16,863 20,073

Shareofassociate’sprofitbeforeexceptionalitemsandtax 2,642 1,960Shareofassociate’sexceptionalitems 9 (141) (529)Shareofassociate’staxexpense (537) (284)

Shareofassociate’sposttaxprofit 1,964 1,147

Profit before interest 18,827 21,220Financecosts 10 (4,015) (2,675)Financerevenue 10 9 1Otherfinanceincome/(charge) 25 437 (170)

Profit before tax 15,258 18,376Taxation 11 (2,390) (5,858)Recognitionofrolloverclaim 11 4,945 –

Profit for the period 17,813 12,518

Attributable toShareholdersoftheparent 17,827 12,518Noncontrollinginterest (14) –

17,813 12,518

Pence Pence

Earnings per 12.5p ordinary shareBasicanddiluted 15 36.97 26.00

Alloftheresultsabovearefromcontinuingoperations.

Group income statementForthe53weeksended4April2011

The notes on pages 27 to 55 form part of these financial statements.The independent auditor’s report is set out on page 19.


Statements of comprehensive incomeForthe53weeksended4April2011


Group Company

2011 2010 2011 2010 53 weeks 52weeks 53 weeks 52weeks Notes £000 £000 £000 £000

Profit for the period 17,813 12,518 9,916 11,254

Other comprehensive income Actuarialgain/(loss)onretirementbenefitschemes 25 3,228 (3,990) 3,228 (3,990)Hedgingreservefairvaluemovementofinterestrateswap 23 282 508 282 508Taxonabovecomponentsofothercomprehensiveincome 11 (1,455) 1,408 (1,455) 1,408Associate’sactuarialloss(netofdeferredtax) onretirementbenefitschemes (678) (334) – –

1,377 (2,408) 2,055 (2,074)

Total comprehensive income 19,190 10,110 11,971 9,180

Attributable toShareholdersoftheparent 19,204 10,110 11,971 9,180Noncontrollinginterest (14) – – –

19,190 10,110 11,971 9,180


Group balance sheetAt4April2011

Restated Restated 2011 2010 2009 Notes £000 £000 £000

Non current assetsGoodwill 16 20,426 – –Propertyandequipment 17 320,204 262,964 263,298Investmentinassociate 18 15,273 13,942 13,094Otherfinancialasset 600 600 600

356,503 277,506 276,992

Current assetsInventories 19 2,143 1,705 1,702Tradeandotherreceivables 20 4,887 4,321 4,742Cash 2,332 1,575 1,519

9,362 7,601 7,963

Non current assets classified as held for sale 21 – 2,573 797

Total assets 365,865 287,680 285,752

Current liabilitiesBorrowings 23 (2,672) (2) (2)Tradeandotherpayables 22 (26,181) (17,695) (18,798)Incometaxpayable (1,758) (2,037) (1,705)

(30,611) (19,734) (20,505)

Non current liabilitiesBorrowings 23 (122,275) (64,205) (67,207)Derivativefinancialinstruments 23 (4,008) (4,290) (4,798)Deferredtax 24 (19,862) (16,716) (17,278)Retirementbenefitschemes 25 (7,592) (14,121) (11,753)

(153,737) (99,332) (101,036)

Total liabilities (184,348) (119,066) (121,541)

Net assets 181,517 168,614 164,211

Capital and reservesSharecapital 26 6,028 6,028 6,028Sharepremium 1,274 1,274 1,274Otherreserves 26 1,808 1,808 1,946Hedgingreserve (2,966) (3,089) (3,455)Investmentinownshares – – (38)Retainedearnings 175,388 162,593 158,456

Equity attributable to equity shareholders of the parent 181,532 168,614 164,211Noncontrollinginterest (15) – –

Total equity 181,517 168,614 164,211

Thecomparativefiguresfor2010and2009havebeenrestatedasdetailedinnote2.

Approvedbytheboardofdirectorsandsignedonitsbehalfby:

Christopher Sandland ChairmanPeter Whitehead FinanceDirector25May2011



Parent company balance sheetAt4April2011

Restated Restated 2011 2010 2009 Notes £000 £000 £000

Non current assetsPropertyandequipment 17 267,137 262,964 263,298Investmentinsubsidary 18 25,620 20 20Investmentinassociate 18 11,303 11,303 11,303Otherfinancialasset 600 600 600

304,660 274,887 275,221

Current assetsInventories 19 1,824 1,781 1,785Tradeandotherreceivables 20 37,220 4,321 4,742Cash 112 1,575 1,519

39,156 7,677 8,046

Non current assets classified as held for sale 21 – 2,573 797

Total assets 343,816 285,137 284,064

Current liabilitiesBorrowings 23 (2,672) (2) (2)Tradeandotherpayables 22 (22,528) (17,985) (21,297)Incometaxpayable (1,758) (2,037) (1,705)

(26,958) (20,024) (23,004)

Non current liabilitiesBorrowings 23 (122,275) (64,205) (67,207)Derivativefinancialinstruments 23 (4,008) (4,290) (4,798)Deferredtax 24 (11,558) (16,716) (17,278)Retirementbenefitschemes 25 (7,592) (14,121) (11,753)

(145,433) (99,332) (101,036)

Total liabilities (172,391) (119,356) (124,040)

Net assets 171,425 165,781 160,024

Capital and reservesSharecapital 26 6,028 6,028 6,028Sharepremium 1,274 1,274 1,274Otherreserves 26 1,808 1,808 1,946Hedgingreserve (2,966) (3,089) (3,455)Retainedearnings 165,281 159,760 154,231

Total equity 171,425 165,781 160,024


Approvedbytheboardofdirectorsandsignedonitsbehalfby:

Christopher Sandland ChairmanPeter Whitehead FinanceDirector25May2011



Group statement of changes in equityAt4April2011

Totalequity Investment attributable Non Share Other Hedging inown Retained toequity controlling Total capital(1) reserves reserve shares earnings shareholders interest equity Notes £000 £000 £000 £000 £000 £000 £000 £000

At 29 March 2009 as previously stated 7,302 1,946 (3,455) (38) 158,456 164,211 – 164,211Priorperiodadjustmenttodeferredtaxliability,relatingtocapitalallowances – – – – 1,190 1,190 – 1,190Priorperiodadjustmenttodeferredtaxliability,relatingtoassociate – – – – (1,190) (1,190) – (1,190)

At 29 March 2009 as restated 7,302 1,946 (3,455) (38) 158,456 164,211 – 164,211

Total comprehensive income Profitfortheperiod – – – – 12,518 12,518 – 12,518Other comprehensive income Actuariallossonretirementbenefitschemes 25 – – – – (3,990) (3,990) – (3,990)Fairvaluemovementofinterestrateswap 23 – – 508 – – 508 – 508Taxonabovecomponentsofothercomprehensiveincome 11 – – (142) – 1,550 1,408 – 1,408Associate’sactuarialloss(netofdeferredtax)onretirementbenefitschemes – – – – (334) (334) – (334)

– – 366 – (2,774) (2,408) – (2,408)

Total comprehensive income – – 366 – 9,744 10,110 – 10,110

Transactions with owners recorded directly in equity Dividendspaidonequityshares 13 – – – – (6,206) (6,206) – (6,206)Allocationofsharestoemployees – – – 38 419 457 – 457Transferofsharebasedpaymentreserve – (138) – – 138 – – –Sharebasedpaymentsbyassociate – – – – 42 42 – 42

– (138) – 38 (5,607) (5,707) – (5,707)

At 29 March 2010 7,302 1,808 (3,089) – 162,593 168,614 – 168,614

Total comprehensive income Profitfortheperiod – – – – 17,827 17,827 (14) 17,813

Other comprehensive income Actuarialgainonretirementbenefitschemes 25 – – – – 3,228 3,228 – 3,228Hedgingreservefairvaluemovementofinterestrateswap 23 – – 282 – – 282 – 282 Taxonabovecomponentsofothercomprehensiveincome 11 – – (159) – (1,296) (1,455) – (1,455)Associate’sactuarialloss(netofdeferredtax)onretirementbenefitschemes – – – – (678) (678) – (678)

– – 123 – 1,254 1,377 – 1,377

Total comprehensive income – – 123 – 19,081 19,204 (14) 19,190

Transactions with owners recorded directly in equity Dividendspaidonequityshares 13 – – – – (6,327) (6,327) – (6,327)Sharebasedpaymentsbyassociate – – – – 41 41 – 41Acquisitionofbusinesses – – – – – – (1) (1)

– – – – (6,286) (6,286) (1) (6,287)

At 4 April 2011 7,302 1,808 (2,966) – 175,388 181,532 (15) 181,517

(1)Totalsharecapitalcomprisesthesharecapitalissuedandfullypaidof£6,028,000(2010:£6,028,000)andthesharepremiumaccountof£1,274,000(2010:£1,274,000).




Parent company statement of changes in equityAt4April2011

Share Other Hedging Retained Total capital(1) reserves reserve earnings equity Notes £000 £000 £000 £000 £000

At 29 March 2009 as previously stated 7,302 1,946 (3,455) 153,041 158,834

Priorperiodadjustmenttodeferredtaxliability,relatingtocapitalallowances – – – 1,190 1,190

At 29 March 2009 as restated 7,302 1,946 (3,455) 154,231 160,024

RamBreweryTrustcorrectionofclassification – – – 2,326 2,326

Total comprehensive income Profitfortheperiod – – – 11,254 11,254

Other comprehensive income Actuariallossonretirementbenefitschemes 25 – – – (3,990) (3,990)Hedgingreservefairvaluemovementofinterestrateswap 23 – – 508 – 508Taxonabovecomponentsofothercomprehensiveincome 11 – – (142) 1,550 1,408

– – 366 (2,440) (2,074)

Total comprehensive income – – 366 8,814 9,180

Transactions with owners recorded directly in equity Dividendspaidonequityshares 13 – – – (6,206) (6,206)Allocationofsharestoemployees – – – 457 457Transferofsharebasedpaymentreserve – (138) – 138 –

– (138) – (5,611) (5,749)

At 29 March 2010 7,302 1,808 (3,089) 159,760 165,781

Total comprehensive income Profitfortheperiod – – – 9,916 9,916

Other comprehensive income Actuarialgainonretirementbenefitschemes 25 – – – 3,228 3,228Hedgingreservefairvaluemovementofinterestrateswap 23 – – 282 – 282Taxonabovecomponentsofothercomprehensiveincome 11 – – (159) (1,296) (1,455)

– – 123 1,932 2,055

Total comprehensive income – – 123 11,848 11,971

Transactions with owners recorded directly in equity Dividendspaidonequityshares 13 – – – (6,327) (6,327)

At 4 April 2011 7,302 1,808 (2,966) 165,281 171,425

(1)Totalsharecapitalcomprisesthesharecapitalissuedandfullypaidof£6,028,000(2010:£6,028,000)andthesharepremiumaccountof£1,274,000(2010:£1,274,000).




Group Company

Restated Restated 2011 2010 2011 2010 53 weeks 52weeks 53 weeks 52weeks Notes £000 £000 £000 £000

Operating activities Netcashgeneratedfromoperations 27 29,743 26,940 25,832 26,940Interestreceived 9 1 419 1Taxpaid (4,357) (4,680) (4,357) (4,680)

Net cash flow from operating activities 25,395 22,261 21,894 22,261

Investing activities Salesofpropertyandequipment 3,316 1,005 3,316 1,005Purchasesofpropertyandequipment 17 (18,614) (10,819) (15,193) (10,819)Businesscombinations,netofcashacquired 12 (60,000) – (62,140) –

Net cash used in investing activities (75,298) (9,814) (74,017) (9,814)

Financing activities Interestpaid (3,753) (3,185) (3,753) (3,185)Equitydividendspaid 13 (6,327) (6,206) (6,327) (6,206)Increase/(decrease)inborrowings 58,073 (3,000) 58,073 (3,000)Increaseinshorttermborrowings 2,667 – 2,667 –

Net cash flow from/(used in) financing activities 50,660 (12,391) 50,660 (12,391)

Increase/(decrease)incash 757 56 (1,463) 56Cashatthebeginningoftheperiod 1,575 1,519 1,575 1,519

Cash at the end of the period 2,332 1,575 112 1,575

Thecomparativefiguresfor2010havebeenrestatedasdetailedinnote2.

Statements of cash flowForthe53weeksended4April2011



1. General information ThegroupandparentcompanyfinancialstatementsofYoung&Co.’sBrewery,P.L.C.fortheperiodended4April2011wereauthorisedforissuebytheboardofdirectorson25May2011.Young&Co.’sBrewery,P.L.C.isapubliclimitedcompanyincorporatedanddomiciledinEnglandandWales.Thecompany’ssharesarelistedontheAlternativeInvestmentMarketoftheLondonStockExchange.Thenatureofthegroup’soperationsanditsprincipalactivitiesaresetoutinnote5andinthedirectors’reportonpages12to18.

Thecurrentperiodrelatestothe371daysended4April2011,thepriorperiodrelatestothe366daysended29March2010.

Thefinancialstatementsarepresentedinpoundssterlingandallvaluesareroundedtothenearestthousandpounds(£000)exceptwhereotherwiseindicated.

2. Basis of preparationTheconsolidatedfinancialstatementsofthegrouphavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)asadoptedforuseintheEuropeanUnion.IFRSincludestheapplicationofInternationalFinancialReportingStandardsincludingInternationalAccountingStandards(IAS)andrelatedInterpretationsoftheInternationalFinancialReportingInterpretationsCommittee(IFRIC)andInterpretationsoftheStandingInterpretationsCommittee(SIC).Duringtheperiod,newIFRS,amendmentstoexistingIFRSandnewInterpretationswereissuedbytheInternationalAccountingStandardsBoard(IASB).Theimpactand,ifapplicable,theadoptionofthesepoliciesisdescribedin“NewAccountingStandardsandInterpretations”.

Noseparateincomestatementispresentedforthecompany,aspermittedbysection408(3)oftheCompaniesAct2006.Thecompany’sprofitaftertaxfortheperiodwas£9,916,000(2010:£11,254,000).

Restatement

Thegroupbalancesheetandstatementofchangesinequityat29March2010and29March2009havebeenrestatedinrespectofthefollowingadjustments:

i. Deferredtaxrelatingtothegroup’sinvestmentinitsassociate,Wells&Young’sBrewingCompanyLimited,hasbeenreassessed.Thedeferredtaxliabilityof£2,320,000hasbeenreclassifiedfromdeferredtaxliabilitiestotheinvestmentinassociate,andincreasedto£3,510,000.

ii. Followingreassessment,thedeferredtaxliabilityrelatingtocapitalallowanceshasbeenreduced,andretainedearningsincreased,by£1,190,000.

Theparentcompanybalancesheetandstatementofchangesinequityat29March2010and29March2009havebeenrestatedinrespectofiiabove.

Theadjustmentsrelatetoperiodspriorto29March2009anddonotimpacttheincomestatementsinanyoftheperiodspresented.

New Accounting Standards and Interpretations

IFRS3(Revised):BusinessCombinations:InJanuary2008,theIASBrevisedIFRS3whichhaswidenedthedefinitionofa“business”sothenumberofacquisitiontransactionsthatfallunderIFRS3isexpectedtoincrease.Thestandardwaseffectiveforaccountingperiodsbeginningonorafter1July2009.Thegroupinterpretspubacquisitions,wherethepubisfullyoperationalattheacquisitiondatewithanintegratedsetofactivitiesandassetsthatarecapableofbeingconductedandmanagedforthepurposeofprovidingareturntoshareholders,tonowfallunderthescopeofIFRS3.

Themainimpactofthisistransactioncostssuchasfeesforlawyers,investmentbankers,accountants,andvaluationexpertsarenolongerconsideredtobepartofthefairvalueexchangebetweenbuyerandsellerfortheacquiredbusiness.Theyareconsideredasaseparatetransactionandthereforeexpensed(aspartofoperatingexceptionalcosts)intheperiodinwhichtheserviceswerereceived.

Therevisedstandardistobeappliedprospectivelythusnoadjustmentisrequiredforbusinesscombinationstakingplacebeforethisfinancialyear.TheimpactofrevisedIFRS3hasthereforeonlyaffectedthegroup’spurchaseofGeronimoGroupLimited,andtheindividualpubpurchasesoftheLassO’RichmondHill,theWhiteHartinWitley,andtheLionandUnicorninKentishTown.

IAS27(revised):ConsolidatedandSeparateFinancialStatements:Thestandardwaseffectiveforaccountingperiodsbeginningonorafter1July2009.Thegroup’sinterestinitssubsidiariesdidnotchangeduringtheperiodandthereforetheadoptionofthisrevisedstandarddidnothaveanimpactonthegroupduringtheperiod.

IAS17:AmendmentstoIAS17Leases:Thestandardwaseffectiveforaccountingperiodsbeginningonorafter1January2010.TheamendmentmakesitpossibletoclassifyaleaseoflandasafinanceleaseifitmeetsthecriteriaforthatclassificationunderIAS17.Inparticular,if,attheinceptionofthelease,thepresentvalueoftheminimumleasepaymentsamountstoatleastsubstantiallyallofthefairvalueoftheleasedasset,itispossiblethataleaseoflandwillbeafinancelease.

TheimpactofretrospectivelyadoptingtheamendmentstoIAS17wasthereclassificationoflandpreviouslyclassifiedasprepaidoperatingleasepremiums,bothnoncurrentandcurrent,of£6,336,000at29March2010and£6,002,000at29March2009tofinanceleasedassetswithinpropertyandequipmentinthegroupandparentcompanybalancesheets.Inaddition,afinanceleaseassetandliabilityrelatingtothepresentvalueofminimumleasepaymentsof£388,000at29March2010andat29March2009wasrecordedwithinpropertyandequipmentandborrowingsrespectively.Thisalsoimpactedthegroupandparentcompanystatementsofcashflowinthatprepaymentsofoperatingleasepremiumshavebeenreclassifiedwithinpurchasesofpropertyandequipment.Althoughtherestatementhadnoeffectonthegroup’sincomestatementorstatementofcomprehensiveincome,certainnoteshavebeenrestatedtoreflectthereclassificationoftheseleasesasfinanceleases.

IAS39:AmendmentstoIAS39FinancialInstruments:RecognitionandMeasurement:EligibleHedgedItems:Thestandardwaseffectiveforaccountingperiodsbeginningonorafter1July2009.Theamendmentclarifiesthatanentityispermittedtodesignateaportionofthefairvaluechangesorcashflowvariabilityofafinancialinstrumentasahedgeditem.Thegrouphasconcludedthattheamendmentdidnothaveanimpactonthefinancialpositionorperformanceofthegroup.Thegroupentersintointerestrateswapsthatareclassifiedascashflowhedgesandareexpectedatinceptiontobehighlyeffective.

Notes to the financial statementsFortheperiodended4April2011


Notes to the financial statements (continued)

IAS32:ClassificationofRightsIssues:Thestandardwaseffectiveforaccountingperiodsbeginningonorafter1February2010.Thedefinitionofafinancialliabilitywasamendedinordertoclassifyrightsissuesasequityinstrumentsincertaincases.Norightsissueswereperformedintheperiod.Thereforetherewasnoimpactonthegroup’sfinancialpositionorperformance.

IFRS2:AmendmentstoIFRS2:GroupCashsettledSharebasedpaymenttransactions:Thestandardwaseffectiveforaccountingperiodsbeginningonorafter1January2010.Theamendmentclarifiestheaccountingforgroupcashsettledsharebasedpaymenttransactions.Thegroupdoesnotoperateasharebasedpaymentschemeandthereforethisamendmentisnotapplicabletothegroup.

Atthedateofauthorisationofthesefinancialstatements,thefollowingStandardsandInterpretations,whichhavenotbeenappliedinthesefinancialstatements,wereinissuebutnotyeteffective:

Effective date

IAS24(Revised) RelatedPartyDisclosures 1January2011

IFRS9 FinancialInstruments:ClassificationandMeasurement 1January2013

IFRIC14 Amendment:PrepaymentsofMinimumFundingRequirements 1January2011

IFRIC19 ExtinguishingFinancialLiabilitieswithEquityInstruments 1July2010

ThedirectorsdonotexpectthattheadoptionoftheseStandardsandInterpretationsinfutureperiodswillhaveamaterialimpactonthefinancialstatementsofthegroup.

3. Summary of significant accounting policiesThesignificantaccountingpoliciesadoptedaresetoutbelowand,exceptasnotedabove,havebeenappliedconsistentlyinpresentingthegroupandparentcompanyfinancialinformation. (a) Basis of consolidationThegroup’sfinancialstatementsconsolidatethefinancialstatementsofYoung&Co.’sBrewery,P.L.C.withtheentitiesitcontrols(itssubsidiaries)andaspecialpurposeentity,drawnuptotheperiodend.Controlexistswherethecompanyhasthepowertogovernthefinancialandoperatingpoliciesoftheinvesteeentitysoastoobtainbenefitsfromitsactivities.ThespecialpurposeentityisanEmployeeShareOwnershipPlan(ESOP)Trust.

Theresultsofsubsidiariesacquiredordisposedofduringtheperiodareincludedinthegroupincomestatementfromtheeffectivedateofacquisitionoruptotheeffectivedateofdisposal,asappropriate.

Thefinancialstatementsofthesubsidiariesandspecialpurposeentityareconsolidatedonacomparableperiodbasis,usingconsistentaccountingpolicies.Allintercompanybalancesandtransactions,includingunrealisedprofitsarisingonthem,areeliminated.

Fornonwhollyownedsubsidiaries,ashareoftheprofitforthefinancialperiodandthenetassetsisattributedtothenoncontrollinginterestsasshowninthegroupincomestatement,thegroupothercomprehensiveincomestatementandthegroupbalancesheet.(b) Investment in associateThegroup’sinterestinitsassociate,beinganentityoverwhichthegrouphassignificantinfluence,isaccountedforusingtheequitymethodofaccounting.

Undertheequitymethod,theinvestmentintheassociateiscarriedinthebalancesheetatcost(netofdeferredtax)pluspostacquisitionchangesinthegroup’sshareofnetassets,lessdistributionsreceivedandanyimpairmentinvalueoftheinvestment.Thegroup’sincomestatementreflectstheshareoftheassociate’sresultsaftertax.Thegroup’sstatementofcomprehensiveincomereflectsthegroup’sshareofanyincomeorexpenserecognisedbytheassociateoutsidetheincomestatement.Thegroup’sstatementofchangesinequityreflectsthegroup’sshareofanytransactionsnotincludedinthegroup’sincomestatementorthegroup’sstatementofcomprehensiveincome.

Theinvestmentintheassociateissubjecttoreviewifcircumstancesoreventschangetoindicatethatthecarryingvalueisimpaired.

Accountingpoliciesoftheassociatehavebeenchangedwherenecessarytoensureconsistencywiththepoliciesadoptedbythegroup.TheassociatepreparesitsaccountstoaSeptemberperiodend,buttheconsolidationismadeonacomparableperiodbasis.(c) The parent company’s investments in subsidiaries and associateInitsseparatefinancialstatements,theparentcompanyrecognisesitsinvestmentsinitssubsidiariesandassociateonthebasisofthedirectequityinterest.Incomeisrecognisedfromtheseinvestmentsinrelationtodistributionsreceived.(d) Revenue recognitionRevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtothegroupandtherevenuecanbereliablymeasured.

Revenueismeasuredatthefairvalueoftheconsiderationreceived,excludingdiscounts,rebates,VATandothersalestaxes.

Thefollowingcriteriamustalsobemetbeforerevenueisrecognised:

Sale of goods Revenuefromsaleofgoodsisrecognisedwhenthesignificantrisksandrewardsofownershipofthegoodshavepassedtothebuyer.

Rental incomeRentalincomearisingfromoperatingleasesonpropertiesisaccountedforonastraightlinebasisovertheleaseterm.

Interest incomeRevenueisrecognisedasinterestaccrues(usingtheeffectiveinterestmethod).

DividendsRevenueisrecognisedwhenthecompany’srighttoreceivepaymentisestablished.


(e) Exceptional itemsExceptionalitems,asdisclosedonthefaceoftheincomestatement,areitemswhichduetotheirmaterialandnonrecurringnaturehavebeenclassifiedseparatelyinordertodrawthemtotheattentionofthereaderofthefinancialstatements.Theyareincludedintheadjustmentsthat,inmanagement’sjudgement,arerequiredinordertoshowmoreaccuratelythebusinessperformanceofthegroupinaconsistentmannerandtoreflecthowthebusinessismanagedandmeasuredonadaytodaybasis.(f) Business combinations and goodwillFollowingtheadoptionofIFRS3(Revised)from30March2010asdescribedinnote2,businesscombinationsareaccountedforusingtheacquisitionmethod.Thecostofanacquisitionismeasuredastheaggregateoftheconsiderationtransferred,measuredatacquisitiondatefairvalueandtheamountofanynoncontrollinginterestintheacquiree.Thenoncontrollinginterestismeasuredastheproportionateshareoftheacquiree’sidentifiablenetassets.Acquisitioncostsincurredareexpensedandincludedinoperatingexceptionalitems.Goodwillarisingonacquisitionrepresentstheexcessofthecostofacquisitionoverthefairvalueofthenetidentifiableassetsacquiredandliabilitiesassumedatthedateofacquisition.Goodwillisreviewedforimpairmentannuallyormorefrequentlyifeventsorchangesincircumstancesindicatethatthecarryingvaluemaybeimpaired.Forthepurposeofimpairmenttesting,goodwillacquiredinabusinesscombinationis,fromtheacquisitiondate,allocatedtoeachofthegroup’scashgeneratingunits(orgroupsofcashgeneratingunits)thatareexpectedtobenefitfromthecombination.Ondisposalofasubsidiary,theattributableamountofgoodwillisincludedinthedeterminationoftheprofitorlossondisposal.(g) Property and equipmentFreeholdandleaseholdpropertyacquiredbefore1997wasmeasuredatits1997valuationanddepreciateduptothepointofadoptionofIFRSin2007.UnderIFRS,thedepreciatedvaluationfigurebecamethedeemedcost.

Propertyacquiredafter1997andallequipmentaremeasuredatcostonrecognitionandarestatedassuchlessanyaccumulateddepreciationandaccumulatedimpairmentlosses.

Thecostoftheasset,lessanyresidualvalue,isdepreciatedonastraightlinebasisovertheasset’susefullife.Theresidualvalue,usefullifeanddepreciationmethodappliedtoeachassetarereviewedannually.Freeholdlandisnotdepreciated.

Usefullives: Freeholdbuildings 50years Leaseholdbuildings 50years,ortheleasetermifshorter Fixtures,fittings&equipment 3-10years

Assetsheldunderfinanceleasesaredepreciatedovertheshorteroftheestimatedusefullifeoftheassetandtheleaseterm.

Anasset’scarryingamountiswrittendownimmediatelytoitsrecoverableamountiftheasset’scarryingamountisgreaterthanitsestimatedrecoverableamount(noteh).

Thegainarisingonthedisposalorretirementofanassetisdeterminedasthedifferencebetweenthesalesproceedsandthecarryingamountoftheasset,andisrecognisedintheincomestatement.Pubfixturesandfittingsaretreatedasdisposalsintheperiodfollowingcompletionoftheirwritedown.(h) Impairment of assetsThecarryingvaluesofinvestments,propertyandequipmentarereviewedforimpairmentifeventsorchangesincircumstancesindicatethecarryingvaluemaynotberecoverable.Animpairmentlossisrecognisedfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosell,andthevalueinuse.Valueinuseisassessedbyreferencetotheestimatedfuturecashflows,whicharediscountedtopresentvalueusinganappropriatepretaxdiscountrate.Impairmentlossesarerecognisedintheincomestatement.

Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheassetisincreasedtotherevisedestimateofitsrecoverableamount,butsothattheincreasedcarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeenrecognisedfortheassetinpriorperiods.Areversalofanimpairmentlossisrecognisedimmediatelyinthegroupincomestatementunlesstheimpairmentlossrelatedtogoodwillinwhichcaseitisnotreversed.

Forpropertyassets,impairmentisassessedonthebasisofeachindividualpub.Thefairvalueoftheassetisassumedtobethemarketvalueoftheproperty.

Forgoodwill,impairmentisassessedannuallyonthegroup’scashgeneratingunitsassociatedwithit.(i) Leases(1) Where the group is the lessee Assetsheldunderfinanceleases,whichtransfertothegroupsubstantiallyalltherisksandbenefitsincidentaltoownershipoftheleaseditem,arecapitalisedattheinceptionofthelease,withacorrespondingliabilitybeingrecognisedforthelowerofthefairvalueoftheleasedassetandthepresentvalueoftheminimumleasepayments.

Leasepaymentsareapportionedbetweenthereductionoftheleaseliabilityandfinancechargesintheincomestatementsoastoachieveaconstantrateofinterestontheremainingbalanceoftheliability.

Leaseswherethelessorretainsasignificantportionoftherisksandbenefitsofownershipoftheassetareclassifiedasoperatingleasesandrentalspayablearechargedintheincomestatementonastraightlinebasisovertheleaseterm.

(2) Where the group is the lessor Assetsleasedoutunderoperatingleasesareincludedinpropertyandequipmentanddepreciatedovertheirestimatedusefullives.Rentalincome,includingtheeffectofleaseincentives,isrecognisedonastraightlinebasisovertheleaseterm.


Notes to the financial statements (continued)

(j) Non current assets held for sale Assetswhosecarryingamountswillberecoveredprincipallybysaleratherthancontinuinguseareclassifiedseparatelyasassetsheldforsale.Assetsareclassifiedasheldforsalewhenmanagementhascommittedtotheirsale,theassetisavailableforimmediatesaleandasaleishighlyprobable.Assetsheldforsalearemeasuredattheloweroftheircarryingamountandthefairvaluelesscoststosell.(k) InventoriesInventoriesarevaluedatthelowerofcostandnetrealisablevalue.Costincludesallcostsofpurchase,costsofconversionandothercostsincurredinbringingtheinventoriestotheirpresentlocationandcondition.Thecostformulausedisequivalenttoa‘Firstin,Firstout’method.(l) CashCashinthebalancesheetcomprisescashatbanksandinhand.Forthepurposeoftheconsolidatedcashflowstatement,cashisnetofoutstandingbankoverdrafts.Cashandcashequivalentsincludeonlydepositswhichmatureinlessthanthreemonths.(m) Trade and other payablesTradepayablesarerecognisedinitiallyatfairvalueandsubsequentlyatamortisedcost.Whenapplicable,tradeandotherpayablesareanalysedbetweencurrentandnoncurrentliabilitiesonthefaceofthebalancesheet,dependingonwhentheobligationtosettlewillcrystallise.(n) Interest bearing loans and borrowingsAllloansandborrowingsareinitiallyrecognisedatfairvalue.Directlyattributabletransactionc

annual report 2011annual report 2011. chairman’s statement 2 chief executive’s report 5 the...

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