Young’s has provided a further update in light of the ongoing COVID-19 situation. It follows the government’s order that all pubs in the UK had to close.
Since then, the operator has elected to access the government’s Coronavirus Job Retention Scheme, which sees HMRC reimburse 80% of wages, up to £2,500 per month, of those individuals who would otherwise be laid off during this crisis. As such, those individuals, known as ‘furloughed workers’, will be kept on the Young’s payroll, but will stop working.
As a result, the vast majority of the group’s employees (including over 4,500 weekly and monthly paid pub staff) have been designated as furloughed workers. A selected 29 ‘key workers’ have not been furloughed, deemed to have essential roles to play and will carry on working from home while this crisis continues and the pubs are closed.
The Young’s board has agreed that the group will, on top of the monies received from government, fund the wages of all its furloughed workers whose annual salary was more than £30,000, so that they will continue to receive 80% of their normal pay.
“In a business like Young’s, people are vital,” says Patrick Dardis, chief executive of Young’s. “We undoubtedly have some of the most fantastic, creative, entrepreneurial, hard-working and caring people in the industry and I’m therefore pleased that, with support from the government, we are able to retain all of them and keep their pay at not less than 80% of what they would normally be getting. The board has also agreed to take a 20% reduction in basic pay.”
Dividend for the year ended 30 March 2020
As part of its focus on prioritising cash conservation, the board has also concluded that it is not appropriate to recommend payment of a final dividend for the company’s financial year ended on 30 March 2020.
Committed facilities and cash management
Young’s has in place £235m of committed facilities from its banks and private placement lenders. Its net debt to EBITDA covenant is set at 5x.
The brewer is continuing to take other measures to help reduce costs and protect its financial position. All capex has been put on hold, resulting in a significant reduction in capex for 2020/21. That, alongside not paying a final dividend for the year ended 30 March 2020, plus a £7m VAT deferral until March 2021 and a £14.5m business rates holiday, provides Young’s with further headroom to put it in a strong position to weather this crisis.