Loungers outperforms since reopening after swinging to adjusted losses

Bar and restaurant operator Loungers reported a 52.9% fall in revenue in its preliminary results on Wednesday, to £78.35m, though it was seeing a “significant outperformance” since reopening its locations on 17 May.

The AIM-traded firm said its adjusted EBITDA was down 51.6% on an IFRS 16 basis for the year ended 18 April, at £13.91m, while its adjusted EBITDA margin improved by 0.5 percentage points to 17.8%.

Its loss before tax was £14.72m, broadly in line with the £14.78m loss it recorded in the 2020 financial year, as it swung to adjusted losses per share of 9.8p, compared to earnings of 2.4p per share a year ago.

Net debt stood at £144.82m at period end, widening from £139.9m.

Looking at its current trading since reopening, Loungers reported net like-for-like sales growth of 23.7% for the nine weeks from 17 May to 18 July, compared to the same period in 2019, pre-pandemic.

It said it was benefiting from post-Covid-19 trends, with flexible working driving traffic to local high streets rather than city centres, as well as ‘staycationing’, or domestic UK tourism.

Non-property net debt at 18 April of £34.2m was reduced to £18.2m by 11 July, as the company’s negative working capital rewound.

Seven new sites had been opened to-date in the current financial year, as it returned to opening sites at the pre-Covid-19 level of 25 sites per year.

“We welcomed the removal of all Covid-19 related restrictions on Monday, and whilst there is naturally short-term uncertainty, we are looking ahead with real confidence,” said chief executive officer Nick Collins.

“We have already opened seven very strong new sites this year, and I am delighted we are now back opening sites at a run-rate of 25 sites per year.

“We want to play our part in driving economic growth as we come out of Covid-19, improving high streets across the UK and providing amazing hospitality in communities.”

Collins said the strategy outlined when Loungers was floated in 2019, and its place on the high street, had “never looked more relevant”.

He said recent weeks had been “very challenging” operationally, and as it headed into the summer holidays, the operating environment would continue to be difficult as it faced interruption due to positive Covid-19 cases and self-isolation, and a “very tight” labour market in a number of locations.

“Once again our team have approached the challenge with enthusiasm and commitment and I am enormously grateful and proud of the contributions made at every level in the business.

“The resilience shown by our team over the last 18 months has been remarkable.

“We are committed to using our growth to provide fantastic careers and progression opportunities in the hospitality sector, and with around 1,250 employee shareholders, rewarding loyalty with ownership in the business.”

At 0957 BST, shares in Loungers were up 0.36% at 275p.