Luminar, the embattled nightclub operator, confirmed this morning that it was continuing to see a “difficult trading environment” as it reported a like-for-like sales decline of 20.2%.
Unveiling its interim results for the 26 weeks to 26 August 2010 it said it had started to 2011 in the same vein as it ended 2010 and this was “primarily derived from fewer customer admissions”. However, it did report an improvement in like-for-like sales decline of -16.9% for the seven weeks to 14 October – a change that was probably driven by new university students.
It also revealed that it had obtained a credit approved term sheet for a new three year facility, after passing a banking covenant test in August.
It said admission revenue had fell by 26.5% on footfall down by 19.1%, while drinks revenue was down by 18.1%. Overall sales in the continuing business for the period totalled £68.2m, a reduction of 20.8% on the previous year.
Earnings before interest, tax, depreciation and amortisation fell to £68.2m, a decline of more than 20% on the year before.
Simon Douglas, chief executive, said: "The difficult trading environment experienced during the second half of the last financial year continued into the first half of this year.
“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."
During the period Luminar said that it had reduced its debts to £85m, down from £104.6m.
Average sales per head in the half were £12.33, a decrease of 1.1% over the previous year. Within this total, average admission income per head fell by 10.0% to £3.15, whilst drink sales per head increased by 1.7% to £8.37.
Overall gross margin of 82.7%, which included 75.8% gross margin on drinks, was slightly below the 83.0% achieved in the first half of last year but exceeded the margins achieved as a whole for last year of 82.6%. However with lower sales, actual gross profit in the first half of £56.4m was £15.1m lower than the same period in the previous year.
Profit before tax in the continuing business before exceptional items was £1.8m, down from £5.2m in 2010.
The net loss from continuing and discontinued operations for the 26 weeks to 26 August 2010 was £34.2m, up from £9.6m.
Luminar said its existing borrowings comprised a syndicated loan facility which runs to August 2012 with a maximum drawdown of £175.0m and interest costs of up to LIBOR plus 0.75%. It also confirmed that it continues to trade within covenant tests, with an adjusted EBITDA to net debt ratio of 2.9 for the period ended 26 August 2010.
In a statement it added: “The group now has attained a credit approved term sheet for a new three year facility, subject to documentation.
“The group anticipates successfully completing the documentation process and entering into this new facility over the next few weeks. Further information will be provided once the refinancing exercise is completed.”
The company said that an on-going review of its estate was continuing and it had developed a new “Fuzzy Logic” night that had proved popular with students. It was also rolling out its Ministry of Sound nights – which allowed it to use the popular Hed Kandi and Dancenation branding.
It has also changed its drink offering – introducing a premium line to cater for all tastes.
