From Yahoo Finance: 2025-06-14 08:00:00

Britain’s largest pub company, Stonegate Group, plans to cut jobs following Rachel Reeves’s tax raid, with up to 150 head office roles at risk. The restructuring aims to reduce debt and focus on more profitable leased and tenanted pubs rather than managed ones.

Stonegate has faced financial struggles, reporting pre-tax losses in recent years due to interest payments on its nearly £3bn debt pile. Higher taxes imposed by the Chancellor added to the pressure, leading to the need for reorganization and job cuts.

Despite revenue increases, Stonegate’s debt burden has led to losses, prompting a shift away from managed pubs. The company’s spokesman cited rising costs, particularly post-Budget, as a reason for the restructuring to align with the business’s current shape and maximize profitability.

Hospitality firms, including Stonegate, have been hit by increased costs from higher National Insurance contributions and lowered thresholds under Reeves’s tax policies. The industry argues that these changes disproportionately affect them due to their reliance on lower-paid and part-time workers.

Stonegate implemented a second round of job cuts, reviewing rents and supplier agreements to ease financial strain. Last summer, TDR injected £250m into the company to prevent debt default, allowing for refinancing and pushing back debt repayment deadlines to 2029.

The refinancing deal provided Stonegate with breathing room to invest in its pubs and secure its financial future. The company’s history dates back to 2010, with significant debt accumulation following the 2019 acquisition of Ei Group, leading to financial pressures exacerbated by the pandemic and rising interest rates.

Stonegate’s challenges mirror those of Asda, also owned by TDR, facing cost-cutting measures post-buyout. The hospitality sector continues to navigate financial difficulties, with firms like Stonegate seeking to stabilize operations and reduce debt burdens for long-term sustainability.

Read more: Britain’s biggest pub company to slash jobs amid debt crunch