The UK economy may be flatlining, but the party remains in full swing at fast-growing bar and restaurant group Loungers (LGRS), which owns the Lounge, Cosy Club and Brightside brands. It said in a trading statement that sales in the 24 weeks to 1 October 2023 had risen 7.7%, an acceleration from the 5.7% reported in the previous 12-week period to 9 July.
The company also upped the pace of its ambitious expansion programme, opening 16 new sites in the first half of the current financial year, against 11 in the same period in FY23, with a further 17 scheduled to open H2 to add to the one new Lounge so far – a record 34 openings.
Total sales in the half hit £149.6m, a 22.3% increase in H1 2023, while the company also pointed to easing inflationary pressures.
Nick Collins, CEO, commented: "Our consistent sales growth reflects the continued evolution of our offer and the resilience of the UK consumer and high street. We have now opened 34 sites in the past 12 months, creating around 1,000 jobs in the process, and 72 sites since the last Covid lockdown. With a great pipeline of further openings in front of us I have never felt more optimistic about our prospects.”
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This is very encouraging trading news from Loungers in the face of the cost-of-living squeeze which has seen other bar and restaurant groups struggle. That’s testament to the attractiveness of its formula, and the sharp operational delivery behind the rapid expansion.
After achieving record revenues of £283.5m in FY23, up 19% from a year earlier, Loungers is on track to hit £331m of sales this year delivering a 78% increase in pre-tax profits to £13.1m, with the rapid growth expected to continue thereafter as it eyes a potential target of 600 outlets, up from the current 238.
Non-property net debt remains at a £14.3m, while interest cover on anticipated overall year-end net borrowing of £159.5m is a comfortable 2.1 times.