Stonegate - comment

Press reports this morning state that Stonegate has hired Alix Partners to trim its management ranks. Numbers circulate of 150 looming redundancies of its executive staff, which probably would amount to freeing up some £20m of EBITDA. On our math, this is badly needed, although we are surprised the company carries excess management capacity (fat) after having to refinance so expensively last year. Reportedly, the turnaround plan neither touches any of the company’s venues, nor any front line staff, keeping its revenue base intact.