Luminar, the embattled nightclub group, has this morning reported same outlet sales down 18.6% for the year to 26 February 2011, driven by a reduction in admissions.
In a trading update, the company said that total spend per head for same outlet clubs was broadly in line with last year at £12.20, but gross margin was slightly behind.
Luminar said that it anticipated that its results for the continuing business, before exceptional items, would be in line with the board’s expectations.
The group said that although trading during the last seven weeks of the year remained challenging, the rate of decline had improved, with same outlet sales down 12.3% on the previous year, against declines of 13.8% for the Christmas period in 2010.
Britain’s biggest nightclub group, which operates just under 80 large-scale late-night venues, said that since the year end trading had continued to improve on a like-for-like basis.
Luminar, which is led by Simon Douglas, said that it continued to have “open and constructive dialogue” with its banking group, who remain “supportive of the management team and of the strategy and initiatives that have been and are being put in place”.
The group said that to allow these initiatives time to gain sufficient traction, “the banking group has agreed, in principle, to amend certain terms of the bank facility going forward to provide the Company with adequate flexibility”.
As part of these initiatives, the company said it had successfully launched Jongleurs comedy nights in four clubs (Leeds, Newcastle, Norwich and Cardiff) with a further eight clubs planned over the coming months.
In addition, it intends to open a number of bars at its clubs during the day and early evening where location and existing may provide “profitable revenue generating opportunities”.
Reacting to this morning’s updates, Douglas Jack, analyst at Numis, said: “If like-for-like sales stabilise in H1 2012E, net debt:ebitda should fall rapidly and the shares should recover (2012E 4.5x EV/EBITDA = 30p/share). The recent trend in like-for-like sales does indicate that new initiatives are starting to gain traction, but the process is likely to take time.
“Here, downside risk is reduced by the timing on achieving full stability being flexed by the banking group agreeing, in principle, to amend the facility terms if necessary.”
