Loungers to continue rocketing sales at half year point

The dining firm has shrugged off malaise in the wider restaurant industry to consistently post higher sales and profits.

Nevertheless, the company, which trades from independently named Lounges and the Cosy Club chain and has sites in Leeds, York, Sheffield and Barnsley, is expected to reveal a slight slowdown in its rapid sales growth when it announces its results for the first six months of the financial year in an update on Wednesday.

Loungers, which only floated on the London stock exchange in April, said last month that it expected to deliver 22 per cent revenue growth to £79.8m in total sales for the 24-week period to October 6.

It said this would be driven by 5.4 per cent like-for-like growth, while it has also pushed forward with an ambitious expansion plan.

Loungers said it is on track to open 25 new sites in the current financial year, stating in October that its pipeline looked “strong”.

Peel Hunt analyst Douglas Jack said he expects the company push forward with organic growth over the rest of the year, but said Loungers could see a slight slowdown.

The analyst said that rivals have “failed to replicate” Loungers’ unique all-day trading model, forecasting that it will post 3.6 per cent like-for-like growth for the current full year.

He added that the business has posted like-for-like sales which are “consistently ahead of our forecasts” as well as “high returns”.

Following its trading update last month, Liberum’s leisure analyst Anna Barnfather said momentum has continued at the business, with 157 sites now trading.

She added that the restaurant group’s recent openings performed “well” and it had a confident outlook for the rest of the year “with a new menu, updated drinks range and better supplier terms setting the stage for further progress”.

Loungers was founded in 2002 and saw operating profits jump by 40 per cent to £9.7m in its last full-year figures.

The rollout of 25 new openings over the year boosted the performance of the company.

The company saw sales jump 26.4 per cent to £153m for the year to April 21, 2019.