Yates Wine Lodges to join market: Company confirms growth plans
As revealed in the Independent on Sunday, the 110-year-old company yesterday confirmed plans for a full listing in the summer. Yates has 46 wine lodges, a drinks wholesaling operation, and has recently moved into the pub market through a joint venture called Watling Street Inns.
Gerry McLeod, chairman, said the listing would accelerate development, particularly Yates' Wine Lodges, where 'we aim to double the estate over the next six years.'
Freehold sites for the lodges can cost up to pounds 750,000, and another pounds 500,000 to fit out in Victorian style. Group capital expenditure has been around pounds 6m in each of the past two years.
Yates has focused on opening larger, drinks-driven premises. Around 10 smaller outlets have been closed over the past five years.
Yates' policy of converting previously unlicensed properties is similar in style to Regent Inns and JD Wetherspoon.
Peter Dickson, managing director and great-grandson of Peter Yates, the company's founder, said: 'We are growing steadily. In the past 10 years the present management has been taking the company into the contemporary era. Rationalisation is complete.'
Sales in the year to March 1993 were pounds 35m, generating taxable profits of pounds 2.8m. The following six months yielded a 13 per cent profit improvement to pounds 1.4m.
While rationalisation and profit re-investment have helped to fund development, Yates has also had to top up with bank loans. Gearing, which was around 23 per cent at the end of 1992/3, is now approaching 30 per cent.
Investors have been able to deal in Yates' shares on a matched bargain basis since 1986. The latest price of 225p values the company at pounds 47m.
Some 40 members of the family own 75 per cent of the equity. Within that, 10 per cent is owned by the directors. 'The family holding will be reduced by some extent,' Mr Dickson said.
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