Loungers outperforms market with 6.9% LFL growth

Loungers, the listed café-bar group, has reported like for like sales growth of 6.9%, as it continues to outperform the wider hospitality market.

The group reported revenue up 26.4% to £153.0m for the full year to 21 April 2019, while adjusted EBITDA was up 23.7% to £20.6m.

Loungers opened 25 new sites during the period, compared to 22 in 2018, taking its total to 146 sites.

In its first full year trading update since its floatation on the AIM in April 2019, CEO Nick Collins hailed continued investment in and evolution of both Loungers brands, and a “re-set investment programme” to improve kitchen and back of house working.

There was “continued development” of the group’s head office to support future growth, while admission to trading on AIM of Loungers’ ordinary shares raised £83.3m.

So far eight new sites have opened in the current financial year, with the group on track to deliver its target of 25 new openings in the full year.

Nick Collins, CEO of Loungers said the strong performance, revenue and profit growth reflected “the continued success of the roll-out, but also our unwavering focus on our customers, the evolution of our proposition and how we support and invest in our teams”.

He added: “Our new financial year has started well and our roll-out strategy for both brands is on schedule. I remain confident about the outlook and future growth prospects for the Group.”

With its neither of its two core brand wedded to a particular cuisine, the group said it had continued to evolve and innovate its broad all-day menus.

There is a “significant opportunity” to refresh and enhance its drinks offer, with coffee training, equipment and consistency another area of focus to stay ahead of other national brands.

Loungers said a pillar of its success was a refusal to overpay for new sites, with a rent to revenue ratio of 5.2%, and “rental discipline” remaining a core focus.

The group expects to open 10 new sites in the 24 weeks ending 6 October 2019, with a pipeline remaining strong.

Loungers said the new financial year had started well, with trading “in line with our expectations as we continue to outperform the wider hospitality market”.

Exceptional items of £0.5m relate to costs incurred in the planning and preparation for the IPO.