Young's shares rise on £10m buy-back

Young's, the family-controlled London brewer, yesterday revealed plans to restructure its share capital by buying back up to £10m of its stock.

But the group, which is headed by the chairman, John Young, was quick to rebuff claims the move was intended to appease calls from its biggest shareholder, Guinness Peat, to change the share structure.

The activist investor, which owns about 23 per cent of Young's shares but controls only 10 per cent of the voting rights, supported the buy-back proposal, calling it "a victory for common sense".

The brewer's two-tier share structure, which was established in the Seventies as a tax-avoidance scheme, keeps voting rights under family control and has prompted criticism from some quarters that it operates as a quasi-private company.

Young's said it would seek shareholder approval to repurchase £1.9m of preference shares and up to 10 per cent of its ordinary shares. The news sent Young's voting A shares 85p higher to 762.5p and its non-voting shares up 70p to 600p.

Peter Whitehead, Young's finance director, said the repurchase scheme would help to narrow the discount between the share price and the group's net asset value. "This is something we considered completely independently of Guinness Peat. It is something we have been looking at for a number of years," he said.

Mr Whitehead said Young's decision reflected low interest rates, favourable stock market conditions and a booming property market, which meant the opportunity to invest in freehold assets was becoming limited. Young's also announced a 10 per cent fall in pre-tax profit to £4.7m for the half-year to 28 September.