Young’s boss: Budget will cost us an additional £11m each year

The chief executive of Young’s has warned the pub group is preparing to pay an additional £11m each year from next April as a result of the Budget.

 

Simon Dodd said the rises to National Minimum Wage and Employer’s NI payments announced by the chancellor last month will result in “significant increased costs” for the industry.

 

JD Wetherspoon boss Tim Martin also warned hospitality businesses will have to increase prices following last week’s budget.

 

Dodd said: “We expect the cost impact to be approximately £11m on an annualised basis from next April. We will work to see how we can mitigate these headwinds without passing on all the cost to our loyal customers. We would like to see certainty and delivery of real business rate reform which will benefit all hospitality businesses."

 

It comes after Young’s reported a strong set of results, driven by increases in food and room sales and the £162m integration of the City Pubs group, which it acquired in March.

 

In its half-year results for the 26 weeks ended September 2024, the pub group saw a 2.9% increase in like-for-like food sales, including a 570% increase in its Sunday roast sales at Alma in London’s Wandsworth.

 

Its rooms revenue achieved like-for-like growth of 2.7%, while average room rates increased by £4.81, raising revenue per available room to £88.89.

 

Revenue as a whole grew by 27.2%, while profit before tax was up 3.3%, rising from £24.5m to £25.3m.

 

During the period, Young’s also disposed of six non-core pubs during for total proceeds of £5.8m.

 

Dodd added: “The City Pub Group integration has gone well, with the pub teams welcomed into the Young’s family and all operational control brought together under one leadership team. Our teams have done a fantastic job and I’m looking forward to seeing our pubs thrive together.”

 

Young’s now has a total managed estate of 278 pubs, including 55 pubs with rooms and a total room count of 1,051.

 

It broke down its combined revenue mix to 63% for drink, food at 29% and accommodation growing to 7%.