Stonegate Group posted another quarter of rising profit in the 40 weeks to 5 July 2026, with operating profit up to £245 million as the tenanted pub operator pushed ahead with converting managed pubs into its leased and tenanted estate. Group turnover fell as the disposal programme continued.
Stonegate is one of six pub-owning businesses regulated under the Pubs Code 2016 because it holds more than 500 tied pubs in England and Wales, alongside Admiral Taverns, Greene King, Marston’s, Punch Pubs and Star Pubs.
Its trading update for the 40 weeks to 5 July 2026 showed turnover down to £1.16 billion from £1.26 billion, while operating profit rose to £245 million from £228 million. The loss before tax narrowed to £53 million from £73 million, and the loss after tax fell to £40 million from £55 million.
Managed pubs move into the tenanted estate
During the period, Stonegate converted 147 managed pubs into its leased and tenanted arm, Pub Partners, and has identified a further 100 pubs for the same move. The shift continues a strategy that has already reshaped a large part of the group’s estate, cutting the number of pubs it runs directly and expanding the tenanted side, where operators pay rent and, depending on the agreement, a share of turnover rather than being managed employees of the company, a move from company operation to independent operators that mirrors the logic of what a franchise is without being one.
Stonegate also generated £56 million in net proceeds from selling 123 trading sites and nine land parcels in the period, funding part of a reduction in capital expenditure to £95 million from £115 million.
Good to know
Stonegate’s Pub Partners pubs are tenancies, not franchises. Stonegate is one of six regulated pub companies under the Pubs Code 2016 and, like Marston’s, Star Pubs, Punch Pubs and Admiral Taverns, does not use the word franchise for these agreements.
Only Greene King’s Hive Pubs brand is marketed as a genuine pub franchise, and what separates that from a tenancy sits in the franchise agreement rather than in the Pubs Code.
Estate performance diverges by format
The leased and tenanted estate grew profit by 5.7% in the period, and Stonegate’s value-led community pub brand, Craft Union, grew profit by 15.2%. The directly managed estate performed less well, with profit down 1.2%, a pattern consistent with the wider shift of sites out of that part of the business.
Regulatory scrutiny continues alongside consolidation
The trading update came as Stonegate remains under investigation by the Pubs Code Adjudicator over alleged breaches of the code’s fair dealing requirements toward tied tenants, and weeks after reports that Heineken’s UK pub arm was in talks over a possible £300 million purchase of around 300 Stonegate sites.
Neither matter featured in the trading update itself, but both sit alongside a wider pattern in the regulated pub sector, where several of the six code-regulated operators have been converting or selling sites as they adjust to rising costs and changing consumer demand.
What a tenancy, a lease and a franchise each commit an operator to is covered in how to open a pub in the UK.
