Luminar sells 26 sites to new company

Luminar has agreed the transfer of 26 units to a new operator, Cavendish Bars.

The disposal, which will see Luminar make a net loss on disposal of £9.9m, is further evidence of the tough conditions being faced by late night operators. However, it has allowed Luminar to pass on the leases which reverted to it when Candu Entertainment went into administration last month.

Cavendish Bars is buying five individual companies from Luminar for a nominal £1 each as going concerns. The companies being sold will be responsible for all leases on the units being sold, as well as a number of other non-core units including the former Candu sites.

The deal brings Luminar down to just 90 core units, along with an additional 18 sites awaiting development. Five years ago the business operated more than 300 late night venues.

Its losses on the Cavendish deal include a £4.8m cash hit as well as write down of assets and goodwill.

Steve Thomas, Luminar chief executive said: "The disposal completes the strategy of streamlining the group's activities. It releases the group from liability for those units going forward and from the cost of having them on our books.

"With a clear strategy we have built a strong business that is positioned well in its market place and will continue to generate significant sums of cash. We remain focussed on further developing a business that delivers excellent returns for shareholders."

Analyst Mark Brumby of Blue Oar Leisure commented: " This disposal could be seen as a ruthless trimming of the tail. The landlords may squeal but the legal advice taken by Luminar would suggest that this will stand."

He added: "Rebuilding trust with contract counter-parties going forward may be an issue. The late-night market remains a deathly-difficult place to be but Luminar, in some of its branded outlets, has a number of category killers".