Luminar warns on profits as young stay at home

Luminar, the UK's largest nightclub owner, has warned there is a "significant risk" it will not meet its full-year profit expectations next February, blaming rising unemployment among the young.

The company, which owns 87 venues, said overall sales fell 5.9 per cent in the 26 weeks to August 27, but figures from the late August bank holiday weekend were not included in this.

However it added that September trading has so far "weakened" with admissions at key weekend trading times below expectations.

The group pointed to the high and rising level of unemployment among its core audience of young people for the current poor performance.

In the six months up until August 27, the slump was driven by a 6.6 per cent fall in drinks revenue, while admission revenue fell by 0.2 per cent on footfall down by 2.9 per cent.

The company said in a statement: "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."

But it added: "As a result of the factors outlined above there is a significant risk that the company will not meet market expectations for the full year ending 25 February 2010 although the outcome for the full year will depend to a large extent on trading over the next quarter including the important Christmas period."

It said though competitors were "increasingly driving business through discounted alcohol prices and "all you can drink" offers", its strategy was clearly differentiated by "providing a higher quality proposition with strong content at reasonable prices".

The statement added: "We remain confident that this strategy will enable us to outperform competitors and maintain our market leading position."

Luminar also said it expects to open a new site in Manchester early next year after raising £37.5m by issuing new shares.