Loungers plans to open ‘at least’ 500 sites
The company’s results for the 52 weeks ended 17 April 2022 showed it had recently opened its 200th site and announced plans to expand its openings pipeline to reach 30 sites per year.
Loungers reported record revenue of £237.3m (up 203% from FY21) and adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) of £53.6m (up 286% from FY21); openings of 27 sites within the year – its highest number so far; non-property net debt reduced by £33.2m to £1m; and increased its build teams number to five, giving it the capacity to open around 32 new sites per year.
It also stated a strong operational performance during the challenges of the ‘pingdemic’, recruitment and Omicron variant, and added app ordering now accounts for more than 40% of sales at its Lounge brand, which is leading to higher average spend and faster service.
Business has ‘thrived’
Since the year end, Loungers’ like-for-like sales have been up by 17.9% on a three-year basis, representing a 15% outperformance of the Peach Tracker.
Loungers chief executive Nick Collins said: “These results demonstrate the extent to which Loungers has thrived over the past year, achieving a record number of openings, record underlying like for like sales growth and a record level of profits.
“We are benefiting from changes in consumer behaviour, with more people staying local, working from home, and supporting their local community and high street.
“While the short-term economic outlook is challenging, we are in an excellent position to weather the storm and to take advantage of growth opportunities coming out of it. We have a strong balance sheet, a very capable and highly motivated team and an affordable, value for money all-day offer with enormous scope for further expansion across the UK.”
Headwinds faced
Loungers chairman Alex Reilley added the business had only a third of its sites open as the exit of the pandemic began and it was geared up to “hit the ground running” on full reopening but the ‘pingdemic’, rising Covid cases, and significant recruitment challenges caused severe disruption to trade normally.
He said: “We found ourselves having to take extremely difficult decisions and to make compromises about how we operated. Throughout this time, the commitment, professionalism and dedication of our teams never wavered, and it was humbling to witness the way in which they helped to navigate the business through the unprecedented challenges of that summer.”
Although some normality resumed, the Omicron Covid variant “wreaked havoc throughout the Christmas season”, and although sales at Lounge fared well during December, party cancellations hit its 31 Cosy Clubs.
On the future, Reilley added: “The next few months will undoubtedly be challenging, albeit at the time of writing we are not seeing much in our trading performance to suggest that there has been any change to consumer sentiment.
“However, we have been planning for these headwinds for months now and I believe we are not only positioned to weather a significant decline in consumer spending – or even a recession – but that we can actually take advantage of the circumstances.”
