The UK’s largest pub company Stonegate has revealed that the enforced closure of its sites has yielded a £746m loss and forced it to go to investors and debt markets for £1.4bn of additional funding. The Financial Times (FT) has also warned a further lockdown would force it to consider more debt or selling assets.
The operator of more than 4,700 pubs under brands such as Slug and Lettuce, Craft Union, Proper Pubs, Yates and Classic Inns expects normal trading to return from July. Pubs suffering losses are understood to include The Lost Dene, Be At One and The Slug & Lettuce, all in Deansgate along with other Manchester city pubs including The Ark in Whitworth St. West and The Town Hall Tavern in Tibb Lane.
The group recorded the multi-million pound loss largely due to estate depreciation and costs stemming from its £1.27bn acquisition of Ei Group in March 2020 – which made Stonegate the largest pub operator in the UK. The pub company, which employs some 17,000 people, comprises an estate of 1,270 managed division sites and 3,200 leased and tenanted venues across the UK.
Stonegate’s published accounts on Companies House reveal the operator’s revenue fell by 17% to £707m in the year to the end of September 2020. The same period in which Britain’s pubs were shuttered between March and July, saw Stonegate slash costs and benefits from £70m in state support – comprising £62m from the furlough scheme, £4m from the government backed Eat Out to Help out initiative in August, and a £3m boost from business rates relief, according to the FT.
A pub company this size is better able to weather the covid financial storm than other smaller competitors. Many smaller pub-co chains and independent pubs may not reopen due to the dramatic financial impact of the Covid crisis.
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