Pub group struggles to refinance £2.2bn debt

Popworld, Birmingham. Credit: Google Maps

The UK’s largest pubs and bars group is struggling to refinance £2.2bn of debt, saying there’s no guarantee it can continue as going concern.

Solihull-headquartered Stonegate hasn’t secured new loans to replace the debt that’s due for repayment in June 2025.

Talks are underway with lenders but as “refinancing plans haven’t been executed, there is an indication that a material uncertainty exists that may cast significant doubt on the company and group’s ability to continue as a going concern,” Stonegate said in a statement.

Stonegate was formed in 2010, following the acquisition of 333 pubs from Mitchell & Butlers and has since grown to operate 4,400 pubs nationwide, including huge brands such as Popworld, Slug and Lettuce and Be At One. After purchasing Ei Group for £1.27bn in 2020, it became the largest pub company in the UK. It belongs to the same parent company as Asda, private equity firm TDR Capital.

Despite a £100m rise in revenue to £1.7bn last year, its losses nearly doubled from £130m to £257m. Operating profits were wiped out by costs after a £178m negative revaluation of its brands and £300m in finance costs.

Stonegate’s CEO David McDowall, who joined from BrewDog last year, said: “We have been very clear that we continue to work towards achieving our long-term balance sheet goals, with the successful refinancing of a portion of our estate in December marking a significant strategic step towards this.

“Our performance gives me real confidence in the future and excitement in seeing our strategy come to fruition.”

McDowall is now leading an “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 a summer of sport on the horizon, and the Euros and T20 World Cup fast approaching, we are looking forward to building on this momentum in the months ahead,” he said.