Loungers has internal capacity to accelerate new openings to around 34 a year, as it announced record revenues.
The all-day café-bar operator has identified potential for at least 600 Lounges across the UK, having been encouraged by “consistently strong” new openings, which continue to increase average levels of sales.
The group achieved record revenues of £283.5m in 2023 - up 19% vs FY22 and 85% vs FY19 - and a record 29 new sites opened.
In its full year results, the Lounge and Cosy Club operator reported industry leading like for like (LFL) sales growth of 7.4% (one year) and 17.6% (three year).
Covering the 52 weeks ended 16 April 2023, adjusted EBITDA of £47.3m represents growth of 66% since IPO in April 2019 – but a decline of 13.2% vs FY22.
Operating profit of £14.8m declined by nearly half from £28.4m in FY22, which Loungers said reflected the impact of Covid related government support measures in FY22.
The company said inflationary pressures had been mitigated and are “now diminishing”, with a medium-term goal to restore adjusted EBITDA margins to pre-Covid levels
During the period, the company launched new roadside brand Brightside, with two sites now open and a third to follow in August 2023.
During the 12 weeks since the year end, LFL sales have been +5.7% despite the impact of Easter timing.
New site openings continue to perform “exceptionally well”, with record levels of sales, and our pipeline of new sites is as “strong as ever”.
The group opened six sites in six weeks across March and April, launched new menus in Lounge and Cosy Club and restructured benefits for salaried staff.
Nick Collins, chief executive of Loungers, said this is the seventh year in succession Loungers has delivered industry leading LFL sales growth, growing from 44 sites to 232 today.
“We are proud to be making a positive contribution to high streets and communities across the UK and there are hundreds more locations around the country for us to target.
“Based on our experience the UK consumer remains positive, inflationary pressures are diminishing and recruitment challenges have eased.
“As an example, a few weeks ago, we opened Ormo Lounge in the seaside town of Llandudno which achieved a record level of sales for any new Lounge opening in our 22-year history, reflecting the relevance of our offer and how well we trade by the coast.
“More broadly, we are excited about our ongoing roll-out programme and the opportunity to bring our culture and hospitality to around 34 new locations in the coming year, with many more to come beyond that.”
