Yahoo Finance Slug & Lettuce slumps to a loss as owner scrambles to refinance £2.2bn debt mountain
Slug & Lettuce swung to a loss last year amid growing debt pressures at its parent company, which is racing to refinance £2.2bn worth of borrowings.
The bar chain, which is owned by Stonegate, fell from a £2.2m profit in 2022 to a £3.1m pre-tax loss in the 12 months to September 2023, new accounts show.
Bosses blamed “the impact of the macroeconomic environment” for revenues falling narrowly from £48.6m to £48.5m.
However, it comes amid broader scrutiny of Stonegate’s debt-fuelled business model.
Under the ownership of private equity firm TDR Capital, Stonegate fell to a £257m loss last year after racking up more than £300m of finance costs.
‘Highly respectable’ performance
As for Slug & Lettuce, it described its performance as “highly respectable” in light of the cost of living crisis.
Many hospitality businesses have suffered from lower footfall in the wake of the pandemic, as employees continue to work from home.
This has coincided with customers cutting back on spending to combat high inflation.
In Slug & Lettuce’s latest accounts, which were signed off last month, bosses said its parent was yet to refinance its debt pile.
As a result, it reiterated a previous warning that a “material uncertainty” still hangs over the parent company’s ability to continue as a going concern.
Stonegate owns around 4,000 pubs across the UK, including Be At One, Popworld and Craft Union.
However, Slug & Lettuce is arguably its best-known brand despite its small size within the group.
Founded in 1985 by Hugh Corbett, the chain is widely credited with pioneering a new approach to pubs that appealed to women and young urban professionals.
With their large, street-facing windows to keep the sites light, as well as more of an emphasis on food, wine and cocktails, the sites quickly proved a hit among after-work drinkers and late-night party-goers.
‘Trading has improved’
Stonegate has recently spent £2.5m on new screens and equipment to drive sales during Euro 2024.
A spokesman for Stonegate said: “These numbers relate to the 12 months to September 2023 – a time when inflation and the cost of living pressures were particularly acute, so bear little relevance to the performance of S&L today. Since then, trading has improved considerably.
“We fully expect to complete our re-financing needs on the back of this strong performance in due course.”
The company also pointed to its most recent half-year results, which reflected a 6.2pc rise in like-for-like sales.
