Young & Co Non Voting     Price: 712p   Mkt Cap: £438m

I quite like shares where they haven't done much for a while. It typically means you are hunting where others aren't. Young & Co's Brewery (LON:YNGN) fits firmly into this bracket, with the shares off 16% from the 52 week high and haven't gone anywhere in performance terms over the last year. It is an owner / operator of predominantly premium managed pubs in London & the South East. It is looking to grow via organic means (opening new pubs) or via acquisitions (eg acquired Geronimo Inns in 2010)


Operations
Established in 1831, Young & Co is an owner / operator of 245 pubs, of which more than 200 are freehold or long leasehold with peppercorn rents. The managed operations comprises 127 Young's pubs (including 21 hotels with 463 rooms) and 35 Geronimo pubs with an overall average weekly taking per pub of £24k.
The tenanted operation handles 79 pubs and has been de-emphasised over the last 5 years as a number of pubs have been transferred to the managed operations or sold. The Ram Brewery was sold in 2007 and a JV was set up with Charles Wells to produce the Young's beer (a nice pint but I actually prefer Fuller's London Pride…). The stake in the JV was subsequently sold in 2011, so the Group no longer brews beer.
The pubs are still mainly wet led, with drinks accounting for 65% sales in 2014, although food accounts for around 30% of Group revenues and the growing accommodation business accounts for the final 5% of Group revenues.


Strong trading track record

Like housebuilder Berkeley Group, Young's has benefited from the relative strength of the London economy compared to the rest of the UK during the Financial Crisis. Having said that I think this is not the only reason that LFL sales have not seen a down year in the managed operations over the last 8 years. The pubs are well invested and the estate is run by astute management. The weakness in the Tenanted LFL sales where Young's sells the tenant beer and collects rent for the pub, so is not actually in control, shows a useful comparison to the managed performance. The tenanted LFL sales have been going backwards for the c80 pubs, between 2007-14, so…

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