Stonegate says transformation strategy ‘is working’ as profit grows
The pub group reported revenue of £1.16bn for the period, compared with £1.26bn in the same period last year.
“Q3 is another period of strong profit growth for Stonegate Group, demonstrating that our transformation strategy is working, and we remain on track to deliver a significant year of profit growth for the group.”
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Operating profit increased to £245m, up from £228m last year, while its loss before tax narrowed to £53m, compared with £73m. Loss after tax also reduced to £40m, down from £55m.
‘Strong profit growth’
Stonegate CEO David McDowall said: “Q3 is another period of strong profit growth for Stonegate Group, demonstrating that our transformation strategy is working, and we remain on track to deliver a significant year of profit growth for the group.”
He said performance was being driven by Stonegate’s partnership businesses, including Stonegate Pub Partners and Craft Union.
McDowall added: “Their success reinforces our belief that when we empower the right operator to meet the needs of their local community, the pub thrives.”
Stonegate said its leased and tenanted estate delivered profit growth of 5.7% compared with the same period last year. Craft Union, the group’s operator-led business, reported profit growth of 15.2%, while the managed estate declined by 1.2%.
Pub conversions
The group has converted 147 managed pubs into partnership formats so far this year.
McDowall said the strategy had “accelerated the pace” of Stonegate’s transformation and helped create a “leaner and more resilient” estate.
The update comes after Stonegate confirmed earlier this month it had identified around 100 further pubs to move into its Pub Partners business.
The company spent £95m during the period on expansion, conversions and maintenance, down from £115m in the previous year.
It also disposed of 123 trading sites and nine pieces of land, and completed five trading site sale and leaseback deals, generating net proceeds of £56m.
The results come after reports yesterday (21 Septmeber) that Heineken’s pub arm was in talks to buy around 300 pubs from Stonegate in a deal that could be worth £300m.
The group is also the subject of an investigation by the Pubs Code Adjudicator into concerns around parts of its leased and tenanted estate. The regulator has not reached any conclusions.
