Stonegate Pub Company saw turnover grow 83% to £484.3m in the 53 weeks to 30 September 2012 as it benefitted from the first full-year of trading following the merger with Town & City Pub Company and its acquisition of 333 pubs from Mitchells & Butlers.
The TDR Capital-backed company returned to profit in the year, with the pre-tax loss of £24.4m in 2011 turned into a pre-tax profit of £14.6m. A capex spend of £11.5m delivered return on major investments of 35.1% (2011: 44.9%).
Underlying like-for-like sales grew 1.8%. Like-for-like drinks sales grew 2.9% (2011: +3.9%), with food sales up 2.6% (2011: +3.7%) on a like-for-like basis.
The period also saw Stonegate, which operates c550 sites, pay its first dividend, with £10m paid to directors. The company reported an operating profit of £22.2m, against an operating loss of £1.1m in 2011.
Stonegate described trading in the period as “very strong”.
The company said: “The industry is under constant cost pressures from legislation, utility costs, business rates and leasehold rents and this leads to an on-going risk to our business. However, supplier contracts to mitigate against significant increases in food and drink and cost control processes are in place to minimise the impact in other areas. These inflation driven factors reinforce our already strong emphasis on margins and cost control.
“Risks to the group’s day to day trading include deterioration in consumer spending prompted by the downturn in the economy together with shifts in consumer spending patterns. The industry is witnessing a general trend of growth in the dining market at the same time as an underlying decline for drink sales.
“Market trends are currently focused on opportunities within the expanding dining out market as well as offering a broad range of products which appeals to all demographics. The group has ensured that segment strategy teams involving marketers, operators and finance meet regularly to ensure the segments respond to any changes in customer behaviours.”
Stonegate revealed that internal health and safety visits were made twice to all its pubs in the period, against just 150 visits in the previous year.
In the 53 weeks to 30 September 2012, more than half - 54% - of the 1,066 site visits resulted in a score of over 90% and were rated Green. In total 37% received an Amber rating by achieving a score between 80% and 90%, and 7% were rated Red with a score between 50% and 80%.
Thirty five inspections resulted in a Black score, under 50%.
The company stated that it was its policy not to offer drinks-only multi-buy deals and not sell any drinks below £1. It said all pub managers would be encouraged to attend pubwatch meetings in their area.
The company said it reviewed its menus in the year and increased the number of vegetarian dishes, “which not only offers customers a great choice but also contributes to reducing the CO2 emissions”. The company began rolling out smart metres in the year and said it expected this process to be completed by Spring 2013.
Last month Stonegate completed the acquisition of the 14-strong Living Room chain. It has recently been focusing on investments, which include its Slug & Lettuce brand and Popworld, its late-night concept that has so far been rolled out to six sites.
