Loungers PLC to open four new sites next month as it resumes expansion plans
The café and restaurant operator will also start a phased reopening when some COVID-19 restrictions are lifted on 12 April
() announced plans to open four new sites next month as it begins a phased reopening when some COVID-19 lockdown restrictions are lifted on 12 April.
The café and restaurant operator will begin trading at new venues in Wolverhampton, Stourbridge, Welwyn Garden City and St Ives by 26 May, bringing the estate to 172 sites in total, comprising 142 Lounges and 30 Cosy Clubs.
These new sites were partially fitted out going into lockdown at the end of December 2020 and are being completed.
The AIM-listed group anticipates a run rate of 25 new site openings per year during the course of the year ending April 2022, assuming no further COVID-19 interruptions.
Next week it will reopen 47 sites in England and five sites in Wales for takeaway and outdoor seating, with the whole estate expected to resume operations in May, when indoor service will be allowed.
Loungers also announced that its lending banks, Santander and , have approved a 12-month extension to the incremental £15mln revolving credit facility (RCF) that was put in place in April 2020.
This additional facility now runs to October 2022 and provides the company with total RCF facilities of £25mln.
“We expect to trade well once the estate is fully re-opened, particularly with our strong coastal presence as we look forward to a summer of staycationing,” said chief executive Nick Collins in a release.
“The most recent lockdown has given us a real opportunity to build a fantastic pipeline of new sites in what is undoubtedly a tenant-friendly environment.”
Analysts at house broker Liberum said Loungers is expected to be a key beneficiary of changing market supply dynamics, which will secure premium new sites and win over “a new legion of loyal customers”.
“The share price has rallied strongly year-to-date but has more to go as trading rebounds, margins improve and roll-out resumes. We fully expect Loungers to continue its like-for-like outperformance with further margin upside from operational and purchasing efficiencies (as well as short term VAT cuts),” they commented.
Shares rose 1% to 268p early on Friday.
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