Fri 21st Jun 2024 - Stonegate reports ‘significant’ increase in profitability as first-half turnover rises to £916m Stonegate reports ‘significant’ increase in profitability as first-half turnover rises to £916m with leased and tenanted and operator-led divisions driving growth: Stonegate Group, the UK’s largest pub operator, has reported turnover increased to £916m for the 28 weeks to 7 April 2024 compared with £904m the previous year. Adjusted Ebitda was up 7.7% to £196m (2023: £182m) with a particularly strong performance from its leased and tenanted and operator-led businesses. First-half Ebitda margin was 21.4%, up 1.3% “highlighting the positive impact of our performance improvement and efficiency initiatives”. The leased and tenanted estate demonstrated consistent growth with like-for-like sales up 6.2% on the previous year. Craft Union, the group’s operator-led business, delivered like-for-like sales of 3.1% while in the managed estate, like-for-like sales were flat. During the period, the group spent £74m (2023: £86m) on expansionary, conversion and maintenance capital. The company said its asset optimisation strategy “continues to drive positive returns”: total year to date spend of £12.5m has delivered a blended return on investment of 37.8% for sites trading over 12 months, with conversions at 40.6% and expansionary at 34.7%. Stonegate said conversions out of managed operations are “proving to be very successful” with conversions into operator-led at 110% and conversions into leased and tenanted at 292%. Stonegate said 80-90 sites are scheduled to convert in the second half of the financial year. The group invested more than £2.5m across its estate to get it ready for Euro 2024 including new screens, audio visual equipment, floor set-ups and staff. Chief executive David McDowall said: “I am pleased to report a very strong first half. We have delivered a rise in revenue and a significant increase in profitability. Our all-round performance exemplifies the strength and depth of the Stonegate estate, with our outstanding Craft Union and leased and tenanted divisions continuing to lead the way. This is testament to the hard work of our people and partners, but also to the success of our on-going initiatives to increase profitability across our portfolio of brands and venue formats. This in turn has driven a strong improvement in our overall Ebitda margin. Our performance gives me real confidence in the future and excitement in seeing our strategy come to fruition. Notably our asset optimisation plan which makes sure we have the right pub in the right location, further profit improvement initiatives, and above all our efforts to continue to support the Great British pub. With the Euros on now and a summer of sport on the horizon, we are looking forward to building on this momentum in the months ahead.” Stonegate features in the Propel Turnover & Profits Blue Book, which features 926 companies. Stonegate’s turnover of £1,719,000,000 for the 52 weeks ended 24 September 2023 is the eighth highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.