Stonegate seeing ‘material improvements in profitability’

09-Apr-2024 - Last updated on 09-Apr-2024 at 08:23 GMT

(image: Getty/ridvan_celik)

Stonegate has reported a “highly respectable performance”, with positive like-for-like growth, most notably in Craft Union, its fast-growing operator managed business.

Total like-for-like turnover growth was up 5.5%, while managed like-for-like turnover growth was up 3%.

Operator-led like-for-like turnover growth, which includes Craft Union, was up 10.3% during the 52 weeks to 24 September 2023.

Total revenues grew by 6.7% to £1.719bn (2022: £1.611bn) adjusted EBITDA was down 6.25% to £375m (2022: £400m) and the group posted a loss before tax of £257m (2022: loss of 130m).

In a business review, a spokesperson wrote: “Sales for the period were favourable compared to the prior year… While the macroeconomic environment continues to have an impact on the group and the cost-of-living crisis has led to lower profit and operating cashflows, overall the group has delivered a highly respectable performance further demonstrating the resilience of our high quality pub portfolio.”

Expansion, conversion and maintenance costs

Stonegate had 4,432 sites at year end.

The managed division grow sales by 3.5% to £1.011bn (2022: 976m), leased & tenanted pubs grew by 2.8% to £427m (2022: £415m), operator-led sales grew by 28% to £281m (2022: £219m) and the group has net assets of £601m.

During the period, £144m was spent on expansion, conversion and maintenance (2022: £140m).

A total of 68 trading sites were disposed of, plus 10 non-licensed, and eight non-trading properties, for proceeds of £49m while sixteen sites moved from trading to non-trading.

Resilient business

In terms of future outlook, chief financial officer David Ross said the great British pub “continues to survive and thrive”, due to the public’s need for social interactions.

In line with this trend, Stonegate’s pub business “remains resilient, with good like for like growth, most notably in Craft Union”.

Ross hailed “excellent profit growth” in the L&T business, and “good progress” in the overall run rate EBITDA.

Overall, Stonegate is in a “strong position to deliver on our plan to create strong profit growth across the group”, with its strategy “now seeing material improvements in profitability”.