Wed 1st Nov 2017 - Loungers – like-for-like growth driven by volume, not price Loungers – like-for-like growth driven by volume, not price: Loungers chief executive Nick Collins has told Propel the company’s continued like-for-like growth is being volume-driven rather than price-led. The Lion Capital-backed group, which operates the Lounges and Cosy Club brands, has seen like-for-like sales increase 7.4% for the 24 weeks to 8 October. The company stated: “We have opened a further 11 sites (comprising ten Lounges and one Cosy Club) with its most recent Lounge openings in Lewes, Bedford and Wokingham performing well. The pipeline of new openings remains very strong, with Lounge openings in Beeston, Bury and Sudbury in the run-up to Christmas, alongside Cosy Club Leeds. The start of 2018 will see us opening Lounges in Melton Mowbray and Stockport and a Cosy Club in Lincoln. We remain on track to open around 24 sites this financial year.” Collins said: “Our like-for-like growth is volume-driven and not price-led. What’s also pleasing is the growth is similar across both Loungers and Cosy Clubs. We are up against tough comparables but we are confident as we go into the busy Christmas period. While the growth will be hard to sustain, if we can keep it above 5% we'll be happy.” The company has also updated on its full-year results for the 52 weeks ending 23 April. Like-for-like sales increased 5.3% compared with 2.2% the previous year. Revenue was up 34% to £91.8m from £68.5m, while underlying Ebitda rose 46% to £12.3m from £8.4m. A total of 20 sites – comprising 16 Lounges and four Cosy Clubs – opened in the year. Two sites were closed in the period. Collins told Propel he believed further opportunities might arise as other operators closed sites. The company said it continued to invest cash generated from operating activities into the development of new sites. During the period, £12.9m of capital expenditure was invested, less than the previous year but “primarily reflecting improved control of its capex spend as average cost per unit decreased by 8%”. Rent-to-revenue ratio improved to 5.8% from 6.0% in the prior year and “maintaining this level remains a core objective of the business”. The company continued to benefit from the regional operations structure that has been put in place. Post the year-end it has added a fourth region in the Lounge business to “ensure we maintain our focus on delivering exceptional customer service”. Collins said keeping the building in-house helped keep costs down but said it would not be at the expense of delivering “top-quality” venues. As previously reported, the company restructured its management team and Collins said the business was operationally and managerially in a good shape and positioned well to continue its rapid growth trajectory. He added the company was still looking at the possibility of an initial public offering in the future but it was “one of a number of options being considered as Loungers continues to deliver great hospitality”.