Luminar given another lifeline

Lloyds, Barclays and Royal Bank of Scotland have all agreed to waive a loan covenant test due at the end of the month and to provide cash until the end of August while a long-term recovery plan is put in place.

The group, which has 77 outlets branded Oceana, Liquid, and Lava & Ignite, cut its debt last year by over £10m to £82m following the disposal of 16 outlets, but remains reliant on its banks to keep going. In December, the lenders agreed a £99m refinancing package.

Luminar’s losses rose from £109m to £198m in the year to end of February as sales dropped by 19 per cent to £137m and the group took huge write-downs on its club estate. Losses without these charges were £1.1m.

Snow over Christmas, the squeeze on disposable incomes and high levels of youth unemployment all put pressure on its core market of 18-24 year-olds, Luminar said.

The group said the second half was better than the first, although in the first nine weeks of the current year sales fell by a further 13.9 per cent, with trading poor over the Easter and Royal Wedding weekends.

Chief executive Simon Douglas, who joined last year, said the figures were disappointing but added there is evidence that “initiatives introduced midway through the year are gaining traction and are diversifying our offerings and revenue streams.”

He is attempting to switch the focus away from dancing toward late-night entertainment.