Stonegate continues to narrow losses post-pandemic

Pub group Stonegate has continued to narrow its losses post-pandemic, reporting a pre-tax loss of £130m for the year to 25 September 2022 compared to £233m the prior financial year.

In documents filed with Companies House, the business, which owns the Be At One and Slug & Lettuce brands, also posted revenue of £1.61b, up from £707m in 2021, and earnings before interest, tax, depreciation and amortisation (EBITDA) of £465m, an increase on the previous year’s £151m.

During the year, Stonegate sold 63 pubs, the majority from its leased and tenanted division, raising £46m and taking its estate to 4,516 sites. The period saw an overall reduction in its leased and tenanted estate from 3,080 pubs in 2021 to 2,864. Meanwhile, its managed estate grew from 799 to 844 sites, its Craft Union group grew from 428 to 473, its commercial estate grew from 194 to 260 pubs, and its Vixen estate increased slightly from 13 to 19 pubs and inns.

Stonegate was reportedly looking to sell around 1,000 of its sites earlier this year, around one fifth of its pubs, for an estimated £800m. At the time it was believed to have been looking to convert many of its leased and tenanted pubs to managed operations.

Stonegate became the largest pub company in the UK when it acquired rival chain Ei Group in 2020, taking it to around 4,500 sites. At the time, around one quarter of these were in its managed division, while the majority were leased and tenanted businesses.

For the 2022 financial year, the TDR Capital-owned business said sales were continuing to recover well and increasing energy and food prices were being offset “as much as possible” by price rises, menu engineering and operational productivity.

The group had agreed beer, food and distribution contracts with suppliers until 2024 and energy prices were capped until March this year, however directors said energy and utility costs were expected to increase “significantly” in the coming year.

And in January 2022, the group acquired the remaining 25% of shares in Hippo Inns for £1.8m, so that the 12 London pubs now form part of the Stonegate managed estate.

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