Loungers narrows loss after revenue and margin improvement
Loungers reported a narrowed interim loss on Wednesday, after it opened new locations and improved its operational efficiency at its current portfolio of cafes and bars.
The 'comfort dining' specialist booked a loss before tax of £2.5m for the six months ended 6 October, which was an improvement from the £4.3m loss it reported at the same time last year, while revenue climbed by 22% to £79.8m.
It said the growth in turnover followed the opening of 10 new sites, which brought the AIM-traded company's estate to 130 'Lounges' and 26 'Cosy Clubs' by the end of the period.
Loungers said it also achieved strong underlying sales growth, as existing sites continued to materially outperform the broader hospitality sector.
Its gross profit margin increased to 41.5% from 40.6%, which the firm attributed to the positive impacts of selling price changes, purchasing improvements and operational efficiencies at its sites, as well as lower labour costs.
Five further new sites had been opened since the start of the second half period, leading the business to state it was confident in achieving its targeted growth rate of 25 new openings per year.
Loungers added that it saw potential for more than 400 Lounges and 100 Cosy Clubs across the UK.
Chief executive Nick Collins said: "I am delighted to announce another strong set of results which continue to highlight our consistent outperformance against the market.
"This will be the fifth consecutive year we have opened at least 20 new sites and we remain excited by the prospects and potential for both our Lounge and Cosy Club formats and the significant opportunity we have ahead of us."
Loungers shares were up by 4.12% at 205.64p at 0830 GMT.