Luminar warns on profits after September
Nightclub company Luminar has reported a "significant risk" it will not meet profit forecasts for its current year, which ends on 25 February 2010.
The warning comes after trade worsened in September with weekend admissions, in particular, below expectations.
Overall sales in the continuing business fell by 5.9% in the 26 weeks to 27 August 2009 compared to the same period last year, in part due to the impact of a late August bank holiday, which deferred some sales this year to the second half.
Adjusting for the bank holiday, same outlet sales (across 87 units) for the 26 weeks fell by 4.5%. Within this total, admission revenue fell by 0.2% on footfall down by 2.9%, while drinks revenue was down by 6.6%.
Gross margins continue to improve as average drink prices increase, but are lower than in the first half of last year when the retail prices of drinks were initially significantly higher.
A statement by Luminar said: "Nevertheless our strategy to deliver higher quality content in our venues has been successful at driving higher spend per customer, but this has been offset by admission numbers which have reduced in the later part of the period.
"Trading so far in September has worsened, with weekend admissions in particular being below the board's expectations.
Adverse conditions
Luminar reported that "adverse market conditions" have affected trading in 3D Entertainment Group (3DE), in which the company holds a 49% shareholding and an outstanding loan note.
The company said: "3DE is classified as an investment held for sale, and we are reviewing the carrying value of our investment in the light of current markets.
"Should the value reduce significantly, it may no longer be appropriate to accrue interest receivable on the loan note, which totalled £1.7m for the financial year ended 26 February 2009.
"We have also become aware that Eminence Leisure Limited, in which we hold a 20% equity share, is considering a creditors voluntary liquidation.
"Eminence Leisure Limited is a supplier of DJs and performing artists to the Luminar group and alternative arrangements are now being implemented.
"It is customary to pay for certain costs of this nature in advance, however it is too early to estimate the extent to which the group may be exposed by this liquidation, if at all."
Important festive season
Luminar added: "The outcome for the full year will depend to a large extent on trading over the next quarter including the important Christmas period.
"Whilst our competitors are increasingly driving business through discounted alcohol prices and 'all you can drink' offers, our strategy is clearly differentiated by providing a higher quality proposition with strong content at reasonable prices. We remain confident that this strategy will enable us to outperform competitors and maintain our market leading position."
• Get all the latest pub trade news every day direct to your inbox. Sign-up for our news alerts. Click here.
