Loungers H1 lfl sales up 7.7%, on track to open 34 sites this year, Brightside progressing to plan: Café bar operator Loungers has reported revenue growth of 22.3% to £149.6m for the 24 weeks ended 1 October 2023, reflecting like-for-like sales growth of 7.7% and the addition of a net 32 new sites. Adjusted Ebitda for the period stood at £23.9m (H1 2023: £19.3m), up 23.6%, while pre-tax profit stood at £3.936m against £2.831m the previous year. The business opened 16 new sites in the period and said it was on-track to open 34 new sites this year and to end the year with 256 sites. It said it had seen “consistently strong trading” driven by both its mature estate (with like-for-like sales 25% ahead of pre-covid levels) and new sites. It highlighted a “continued evolution of our offer”, including further food menu innovation and the introduction of a new blended drinks and iced coffees range. It said that headline four-year like-for-like sales growth of 25% is “testament to the strength of our brands, the flexibility of our offering, and the quality of our teams”. The company said that margins were benefitting from an easing of inflationary pressures and on track to return to pre-covid levels. It said that its new site roll out accelerated with 16 sites opened in the period (H1 2023 11 sites) – 14 Lounges and two Brightsides, and that these new sites were performing “very well and the pipeline remains strong”. The business said it has continued to “trade well” over the first eight weeks of Q3, with like-for-like sales growth across the 32 weeks to 26 November of 7.6%, A further six sites have opened post the 1 October half year end – five Lounges and one Cosy Club. The company said: “With the consumer remaining robust and continuing evidence of moderating inflationary pressure we are optimistic as we look ahead to the Christmas trading period.” Nick Collins, chief executive of Loungers said: “This has been another period of strong financial and operational growth for Loungers. The fact that we have delivered increases of 22.3% and 23.6% in our revenue and Ebitda respectively should be taken as yet another reminder that it is not all doom and gloom in the UK hospitality sector. We are living proof that businesses which can provide outstanding hospitality, great food and drink and excellent value are still capable of thriving, and we see more growth potential for Loungers than ever before. Our accelerated site roll-out programme continues at pace, and we are on track to open 34 in FY24, which means that we will end the year with more than 250 sites. The opening of every new Lounge means an investment of nearly £1m into the local high street, and the increased footfall creates a positive knock-on effect on all of the businesses around us. By the end of 2023, we will have added another 1,000 people to our team during the year, and we are particularly pleased that one in eight of those new jobs is in areas that the government wants to ‘level up’ by creating better opportunities and standards of living.” The company said that its new openings continue to perform very well and above average, and the pipeline remains in good shape to deliver at the current roll-out rate of around 34 sites per year. Collins said: “Geographically we are seeing more opportunities in the north east as we gradually move towards Scotland, but there still remains a great deal for us to go for across England and Wales. We are enjoying strong trading in mixed use retail/leisure parks and coastal locations, alongside our ‘bread and butter’ of suburban and small-town, high street locations. Our strength of performance across this variety of site types gives us real confidence in our conservative targets of 600 Lounges and 65 Cosy Clubs.” During the summer the business opened its second and third sites under its roadside diner concept, Brightside. Collins said: “The team have done a fantastic job at delivering well for their customers in what has been an intense period due to the openings coinciding with school summer holidays. This year we have achieved a gross average weekly level of sales of £22,500 across the sites and we expect this to grow as we continue to build our brand awareness. In the main we are pleased with Brightside’s performance to date, and most importantly are proud of the hospitality we are providing, and the choice we have introduced to passing motorists as well as to local residents. As we continue to trade, and with the benefit of the two further planned openings in FY25, we will build a view on Brightside’s returns on capital and whether there is an opportunity to roll it out as a national brand. Whilst it’s an exciting time for this new brand, I believe the strength of these interim results firmly demonstrates that Brightside has in no way distracted from our focus on or the performance of the Lounge and Cosy Club brands.” Loungers said it is aiming to be the number one choice for careers in hospitality in the UK, and has built a “strong reputation for being a great starting point for young people entering the industry”– with around a third of its 8,400-strong team aged 21 or younger. The company is particularly targeting expansion in both the north-east and north-west, where it is currently under-represented, and is assessing a wide range of sites, from brand new developments to former retail properties, banks, restaurants and pubs. Collins said: “Our Lounges are extremely versatile and work as well in purpose-built, mixed-use retail and leisure parks as they do in historic buildings on high streets. This gives us a huge amount of choice when assessing new sites, as we’re not tied to any one kind of environment or type of location.” At the same time, the business has announced that Gregor Grant, its chief financial officer, is to step down following the publication of the group’s results for the year ending 21 April 2024, with effect from 31 July 2024. Loungers said it had commenced a search to identify his successor and expects to make an appointment well in advance of Grant leaving the group in order to allow for “a seamless handover of responsibilities”. Alex Reilley, executive chairman and co-founder of Loungers, said: “Gregor has been an integral member of the Loungers leadership team since joining the business in 2018. During his time here Gregor has provided consistently strong financial leadership as the business has more than doubled in size, alongside delivering the IPO in 2019 and of course helping to guide the business through the challenges of the covid period and the inflation that has followed. I would like to take this opportunity to thank him, on behalf of the board and colleagues across Loungers, for his commitment and enormous contribution over the last five years. He will leave with our best wishes for his future.”