Pub chain warns Brexit uncertainty is hitting recruitment
16 November 2017
Pub chain Young's has hailed a 6% jump in revenues, but said it remains "concerned" that Brexit uncertainty is making it more difficult to attract and retain staff.
The group, which is mainly based across London and the South East, said that, "despite the strong start" to the second half of its financial year, it is monitoring trading conditions "closely".
Chief executive Patrick Dardis said: "The political environment remains unpredictable and this ongoing uncertainty is unhelpful when it comes to the strength of the broader economy."
"In particular, we remain concerned around the impact that the Brexit negotiations are having on the pub industry, especially in relation to attracting and retaining the best people in our pubs."
The hospitality industry is expected to suffer if access to foreign workers is restricted as a result of Brexit, with the British Hospitality Association saying earlier this autumn that around 700,000 of the sector's 3.2 million workforce are from the EU.
The warning from Young's came as the company reported a 6% rise in half-year revenues to £144.1 million for the 26 weeks to October 2, but pre-tax profit came in at £22.1 million, in line with a year earlier.
The group said it has invested £14.3 million over the period, which went towards redeveloping a number of its sites, acquiring the Chequers in Hanham Mills and opening the Bull in Bracknell.
Its acquisition of the Smiths of Smithfield site, and a sister location in Cannon Street, has also been completed this week, it said.
The 186-year-old pub chain - which was established in 1831 - manages around 177 pubs and has 77 tenanted sites.
It said its line of "well-invested and and premium positioned" managed sites delivered a 6.8% jump in total revenues, while like-for-like sales leapt 4.6%.
The company reported "strong trading" over the first six weeks of the second half of the financial year, driven by a 7% rise in total managed house revenues.
Regardless of Brexit uncertainty, Mr Dardis said the company is on track to meet annual targets.
“Our expectations for the full year remain unchanged and we remain confident about our long-term prospects thanks to our premium offer, well-invested and prime located pubs, and the talented teams we have in place across our business,” he said.
Paul Hickman, an analyst at Edison Investment Research, said Young’s has delivered “high-quality” results for the period and is expected to bring in £40 million in full-year pre-tax profits, despite wider pressures.
“Although a Young’s pub, the Wheatsheaf, was caught up in the London Bridge terror attack of June, London continues to attract tourists and its reputation for law and order remains strong,” he said.
“Management voices concerns over staff recruitment post-Brexit, an issue for the pub industry generally given its dependence on foreign staff.
“However, Young’s has this week invested in the future of the City of London with the acquisition of Smiths of Smithfield, a well-known City lunch haunt.”