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Thu 18th Mar 2021 - Stonegate hit by £746m loss on back of pandemic-led pub closures
Stonegate hit by £746m loss on back of pandemic-led pub closures: Stonegate Pub Company has reported a £746m pre-tax loss after the coronavirus regulations forced it to close the majority of its pubs and turn to investors and debt markets for an extra £1.4bn funding. The group said it expected normal trading to return from July this year but warned if there was another lockdown this winter it would have to consider raising more debt or selling assets. Accounts published at Companies House showed Stonegate’s revenues fell 17% to £707m in the year to 30 September 2020. During that period pubs were closed between March and July but Stonegate said it had slashed costs and benefited from £70m in state support – with £62m income from the furlough scheme, £4m from the government’s Eat Out To Help Out initiative last summer and £3m from business rates relief. The group was pushed to a £746m pre-tax loss as a result of depreciation on its estate and financing costs resulting from its £3bn acquisition of Ei Group in 2019. The combined company now operates 4,708 pubs, making it the UK’s largest pub business. It has 15,900 employees. In July last year, Stonegate’s backer, private equity group TDR Capital, sold £1.2bn worth of bonds to finance its purchase of Ei Group. The main tranche of debt, a £950m sterling bond which matures in 2025, has a high coupon rate of 8.25%. The group also received £50m direct funding from TDR Capital and in November issued a further £120m in bonds at the same rate and maturity. As of the end of September, Stonegate said it had a cash balance of £294m.

Casa Brasil founder to launch new venture after acquiring former Chiquito site in Southampton: David Hall, founder of the Casa Brasil restaurant group, is to launch a new venture. Hall has acquired the former Chiquito site at Ocean Village in Southampton for his new restaurant operation Ocean Grill. He will be joined by his long-time friend and business partner Giuseppe Farinella. The new restaurant “will bring back old school restaurant service and specialise in charcoal grilling of the finest wagyu beef steaks and fish with an old fashioned twist of flambé at the table”. The mid-19th century former dock building, known historically as Ironside House, extends to about 3,553 square foot. Casa Brasil operates three restaurants in the UK – West Quay in Southampton, Port Solent near Portsmouth and Cabot Circus in Bristol. Savills acted on the Southampton deal. Chris Bickle, director in the licensed leisure team at Savills Southampton, said: “With lockdown restrictions easing we expect hospitality businesses to benefit from the pent up demand as consumers begin to enjoy eating, drinking and socialising in venues once again. We have seen a resurgence of interest in the Ocean Village Oxford Street areas of Southampton from operators attracted by the lower entry costs by comparison to the main city centre as well the ‘neighbourhood’ independent atmosphere. Much of the activity is being driven by acquisitive local operators and entrepreneurs.”

Fever-Tree – we expect momentum to build in on-trade sales as year progresses: Fever-Tree has said it expects momentum to build in on-trade sales as the year progresses. The company said the on-trade has historically accounted for 45% of its sales and given its strong off-trade performance during the pandemic, it expects to deliver revenue growth of between 12% to 16% in 2021, with gross and Ebitda margins consistent with FY20 as the recovery occurs. The company stated: “The first months of the year have seen a continuation of very positive trading in the off-trade across all our regions. While we would expect some of the off-trade demand to switch to the on-trade as it begins to re-open, we estimate that the off-trade will remain strong. As previously stated, the on-trade continues to be impacted by widespread lockdowns but with the gradual easing of restrictions over the coming months, we expect momentum to build as the year progresses.” It comes as the company reported revenue for the year ending 31 December 2020 fell 3% to £252.1m, compared with £260.5m the previous year. UK revenue was down 22% to £103.3m, compared with £132.6m the year before. Group adjusted Ebitda fell 26% to £57m, compared with £77m the year before. As previously reported, on-trade sales across the group were down circa 60% year-on-year due to the various restrictions. Chief executive Tim Warrillow said: “Although 2020 presented many unforeseen challenges, our resilient performance highlights the strength of the business. Our performance in the off-trade was especially strong, exceeding our expectations across all our regions. Despite the restrictions and closures that impacted the on-trade for a large proportion of the year we didn’t furlough any of our team enabling us to support our customers across the on-trade and off-trade, strengthening our relationships and securing new contracts. While our on-trade business remains impacted by the continued shutdowns and restrictions across many of our regions, we have had a very positive start to 2021 across the off-trade. The momentum seen in 2020 has continued in the first part of the new year with strong sales in our major markets, most notably the UK and US. We are working closely with our on-trade customers as they prepare for reopening across our regions and while we are mindful of the gradual nature of easing of restrictions, we share their optimism and excitement for this important channel in the months and years ahead. Our confidence in the future is underpinned by the long-term trend towards premium spirits and long mixed drinks, which accelerated during 2020 and a trend that Fever-Tree, with our category leadership position, range and relationships, remains uniquely placed to continue to benefit from.”

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