Stonegate Group chief executive David McDowall has said the UK’s largest pub operator is set to take a “material step” towards profitability this year, although he cautioned that its wider turnaround remains “less than halfway” complete.

Speaking to the Sunday Times, McDowall highlighted the lasting pressures on the hospitality sector while praising the resilience of the community pub.

“The [profit and loss accounts] of bar, restaurant, pub, hospitality businesses over the last few years have been changed forever. And that is going to continue to make it difficult,” he explained. “On a positive note, it feels like the strongest part of the hospitality sector is wet-led [pubs that mainly sell drinks, rather than food] community pubs. And that happens to be the lion’s share of our estate.” 

McDowall added that interest in leased and tenanted pubs is at “its highest it’s been”, while the number of “agreements ending” are “at their lowest for quite some time”.

Stonegate continues to explore options for parts of its estate, including a potential £1bn disposal of around 1,000 pubs.

“We will either refinance or continue to look at the options for a sale – there’s no huge rush to do that,” McDowall concluded.