Luminar posts £36m first half loss

Nightclub operator Luminar Group said it believes it can reverse its declining fortunes after announcing a £36m loss for the first six months of the year.

With the group's core market - young people - under as much pressure as ever, Simon Douglas, the group's chief executive, said the tough trading environment of the second half of the previous financial year had continued.

"Despite this, we continued to generate cash and reduce net debt. We now have a clear picture of the strategy we believe is appropriate to reverse the downward trend.

"Management actions are showing encouraging signs of driving footfall and volume. The board believes that the group is now on the right path, although at the very beginning, of returning value to Luminar's shareholders."

Part of this redefined strategy saw the group move close towards sealing a new three-year banking facility, which it hoped to agree, it said, in the coming weeks.

There had been speculation that Luminar would breach its banking covenants, but the likelihood of this happening has now receded.

Cash generation and disposals had helped reduce Luminar's net debt from £104.6m at this point in 2009 to £85m.

As regards its offer, Douglas said that after a market research exercise the group would broaden its music range to address what it called a "diversity of tastes" among its customers, and Luminar's clubs would now feature live performances, as well as DJs playing records.

Fuzzy Logic, a new concept aimed at the student population and launched during 'fresher's week' earlier this month, had proved "extremely popular" where it had been rolled out, he added.

However analysts remained cautious about the group's prospects. While some agreed the intentions of management were pointing the right way, the current like-for-like trading trends - down nearly 17 per cent - were "worrying".

Luminar's share were up nine per cent at 18p, but still 78 per cent lower than this time last year.

Luminar's first half results at a glance

Turnover: £68.2m (down 21 per cent)

EBITDA: £13.9m (down 31 per cent)

Pre exceptional pre-tax profit: £1.8m (down 65 per cent)

Pre-tax loss: £35.7m (vs £1.5m profit in H1 09)

Pre exceptional earnings per share: 1.3p (down 77 per cent)

Loss per share: 34.1p (up 123 per cent)