Loungers looks to restart roll-out, saying Covid-19 has ‘strengthened our belief' in scalability
Like-for-like sales increases of 30% in the last 10 weeks have seen Loungers look to reignite its roll-out plans, saying the results have "strengthened our belief in the scalability" of both the Lounges and Cosy Club brands.
The operator of 138 Lounges and 29 Cosy Clubs said it was particularly pleased that the restaurants had shown growth, even if the impact of government schemes such as Eat Out to Help Out were dismissed. It hopes to open four new sites by the end of the current financial year.
Announcing the group's financial results to 19 April 2020, and updating figures since its 4 July reopening, chief executive Nick Collins said: "I am delighted with the strength of our performance since re-opening, which highlights how strategically well-positioned we are in both Lounge and Cosy Club.
"Our like-for-like sales of +30% over the last 10 weeks includes the remarkable four weeks of the ‘Eat Out to Help Out' scheme and the government's support for our sector continues to be much appreciated. More importantly, however, having fully re-opened, our underlying sales are in growth even without this support.
"We have focused on providing amazing hospitality, while reassuring our teams and customers the Lounges and Cosy Clubs are a safe environment, and our customers have been quick to return. During lockdown we were confident the flexibility of our all-day offer, our suburban and market-town locations and our focus on hospitality and community would ensure we emerged strongly. I believe these results have confirmed that to be the case.
"Clearly we don't know what is around the corner. We anticipate further interruption to trade on either a local or regional basis in the short-term and have the balance sheet and liquidity to withstand significant further Covid impacts. Covid has, however, strengthened our belief in the potential scale of both brands in the longer-term and the behavioural shifts being witnessed further underline this. In the second half of the year we will cautiously restart the roll-out and we are excited about the property opportunities available to us and getting back to opening 25 sites a year in due course."
The 12 months to 19 April 2020 had seen revenue increase by 8.8% year-on-year to £166.5m, while adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 0.8% to £28.7m.
The company opened 21 new sites in the period and recorded a pre-tax loss of £14.8m off like-for-like sales growth of 4.5%.
