Young’s has agreed to sell 56 of the 63 pubs in the Ram Pub Company to Punch for a total consideration of £53m cash.
As part of its strategy to create long-term sustainable shareholder value, Young’s regularly reviews its capital allocation priorities. Following the review, the board decided that the best way to increase value for shareholders was to withdraw from the tenanted model and focus solely on operating predominantly freehold managed pubs and hotels.
Net proceeds from the sale will be used to strengthen Young’s balance sheet and provide additional capacity for investment in its managed estate. It will look to acquire predominantly freehold managed pubs. By focusing on its managed house estate, head office costs will reduce.
Encouraging trading
Young’s chief executive, Patrick Dardis, said: “Young’s sole focus will now be on operating well-invested and premium managed pubs and hotels. We have a proven history of making attractive returns from investing in high-quality pubs and this disposal will provide us with additional firepower to upgrade our existing pubs and capitalise on attractive acquisition opportunities that may come to the market.
“During lockdown, we invested a total of £17m in improving the pubs in our managed estate and the purchase of two new pubs: Enderby House, in Greenwich, and Alban’s Well, in St Albans.
“We are delighted to be welcoming back our customers and are already seeing encouraging trading, despite some restrictions remaining. The board is confident Young’s will emerge from the pandemic in a stronger position and is excited about the future of the business.”
