Cafe and bar operator Loungers has narrowed its losses to £4.9m as revenues rocketed in its maiden set of results since becoming a public company.
Loungers booked a £4.9m pre-tax loss for the year ending in April, it revealed today. That beats last year’s equivalent £6.6m loss.
Revenue jumped 26.4 per cent to £153m, up from £121m in 2018, as like-for-like sales rose 6.9 per cent year on year.
Its April IPO meant costs racked up, though, with the retailer counting £14.8m in net debt.
Loungers had already told investors it would not pay a dividend, to reinvest cash into growing its network of Lounge and Cosy Club locations.
Why it’s interesting
Loungers ‘ share price rose as high as 224p in June after its April debut on the Aim stock market, but has since slipped to 207.5p despite a marginal rise today.
Peel Hunt hailed “strong momentum” in the group’s latest annual results, however, as sales continued to climb.
The broker has set Loungers’ target price at 285p per share, issuing a ‘buy’ rating on its stock.
“We believe Loungers has carried strong like-for-like sales and pricing momentum in
2020, as well as the benefits of recent contract re-tendering,” Peel Hunt said.
“The company should quantify its H1 2020E LFL sales when it announces its AGM
statement in mid-October; an event that we expect to act as a positive catalyst for the shares.”
What Loungers said
Chief executive Nick Collins said:
These results represent a strong performance for the financial year ending 21 April 2019 and are in line with both our, and the market’s, expectations. Our revenue and profit growth not only reflect the continued success of the roll-out, but also our unwavering focus on our customers, the evolution of our proposition and how we support and invest in our teams.
Our admission to AIM post the FY19 year-end has meant almost 600 employees have had the opportunity to become shareholders in Loungers plc and it is fantastic that their hard work and commitment can be rewarded in this way.
“Our new financial year has started well and our roll-out strategy for both brands is on schedule. I remain confident about the outlook and future growth prospects for the group.
Main image credit: Loungers