Stonegate boosts profits in H1

Stonegate has reported significant profit growth in the first half of the year, with adjusted EBITDA up 7.7% to £196m (H1 2023: £182m).

The H1 performance, covering the 28-week period to 7 April 2024, was driven by strong trading from leased & tenanted and operator-led businesses (Craft Union).

The L&T estate demonstrated consistent growth with like-for-like sales 6.2% up on the equivalent period in the prior year.

Craft Union delivered like-for-like sales of 3.1%, while the managed estate delivered flat like-for-like sales.

Total revenue in H1 was £916m, compared to £904m in the prior year and £1.72bn in the 52 weeks ended 24 September 2023.

The EBITDA margin in H1 was up +1.3% to 21.3%, highlighting the positive impact of our performance improvement and efficiency initiatives.

During the period the group spent £74m (H1 2023: £86m) on expansionary, conversion and maintenance capital.

Stonegate said its asset optimisation strategy continues to drive positive returns, with total year to date spend of £12.5m has delivered a blended return on capital of 37.8% for sites trading over 12 months, with conversions at 40.6% and expansionary at 34.7%.

Conversions out of managed operations are also proving to be very successful, the company said, with conversions into operator-led at 110% and conversions into L&T at 292%. 80-90 sites are scheduled to convert in H2 FY24.

David McDowall, chief executive of Stonegate Group, 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 L&T 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.”

• David McDowall will appear in conversation with MCA at the Pub Conference next week. For more information and tickets, click here