Café-restaurant chain Loungers has revealed lower profits following the impact of soaring cost inflation and the end of government pandemic support but said it is “optimistic” about Christmas trading.
The company, which was founded in Bristol and now operates 175 Lounge and 35 Cosy Club sites, told shareholders on Wednesday (November 30) it had seen “positive momentum” continue over the past eight weeks.
Like-for-like sales over the financial year to November 27, are up 17.4% against pre-pandemic levels from 2019.
“Whilst there is no sign of the cost of living pressures abating, we remain optimistic looking ahead to trading over the Christmas period,” the company said.
Chief executive Nick Collins told the PA news agency that Christmas bookings have been positive in the run up to the key trading period.
“Christmas is one of the few times we get much visibility because we can see through Christmas bookings and it has been really positive,” he said. “There has been no indication that customers will behave any differently and we think many will be really keen for this Christmas due to the past couple of years”.
Loungers said it had been buoyed by new openings, with the firm opening 16 sites so far this year as it remains on track to open 30 locations by April 2023. The expansion plan will see the company grow into roadside dining for the first time with plans for its new restaurant chain Brightside.
The company has also confirmed plans to accelerate the expansion to between 32 and 34 sites in the following year. The news comes as Loungers reported revenues had increased by 19.5% to £122.3m over the 24 weeks to October 2, compared with the same period last year.
The group’s Lounger venues “performed consistently” over the half-year with broad growth across different regions. It added that Cosy Club venues faced “tough” comparisons against post-pandemic openings from 2021 over the summer but have performed “well” and are in a strong position heading towards Christmas.
Bosses revealed the pre-tax profits slipped to £2.8m for the half-year from £12.8m a year earlier despite higher sales. The company said it was impacted by rising food and drink cost inflation, as well as higher labour costs.
Shares in Loungers were 0.5% higher at 193p.
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