Stonegate Pub Company plans to convert 80% of the TCG estate it acquired for c£100m last year to its own formats over the next three years.
Chief executive Simon Longbottom told M&C that the company was on track to achieve synergies from the deal for the 53-strong group of £2.3m.
He said that the total deal for TCG, including the sale and leaseback of five sites, which raised £34m at low yields, worked out at a 6x multiple.
He said: “We are very pleased to have acquired a very well run business that has been cruelly underinvested in.
Stonegate invested £105m acquiring the 53-strong TCG; £80m of which was raised through bondholders.
On completion of the deal, the group immediately invested £500k in maintenance capital.
Longbottom said that the company was “taking its time to see which of our formats would work across the 53 sites and was very proud that following the acquisition the group had “not lost a single general manager from TCG”.
Across the Stonegate’s wider estate, the company invested in 103 sites over the last year. Its total investment stood at £45m, comprising £25m on development and £20m on maintenance. It’s Three year ROI stands at 46%.
For the 52 weeks to 27 September 2015, the company saw like-for-like sales increase by 1.2%, with like-for-like gross margin up by 3% and like-for-like profit up 10.8%. Adjusted EBITDA increased 16.6% in the year.
It disposed of or closed 18 sites and since the year end has added 53 sites with the TCG acquisition, bringing the trading estate to 664.
