Nightclub company Luminar is looking to increase the number of Oceana mega-clubs it runs from 10 to 16 by early 2009, according to KBC Peel Hunt analyst Paul Hickman.
Luminar has just opened its latest Oceana in Brighton at a cost of £5.1m. It has a capacity of 2,600 and seven differently themed rooms.
Hickman said: "It is opening directly opposite an existing, unbranded, Luminar outlet, but last night there appeared to be substantial demand for both."
The target ebitda for the Brighton Oceana is £2.3m per annum.
The ban has not resulted in a major decrease in trade
KBC Peel Hunt
Hickman also noted that Luminar is adopting different strategies for managing smokers at its clubs.
At Redhill, a Liquid & Envy site, there is a smoking area which is basically a back yard without any furniture and with limited capacity.
In contrast, at Crawley, also a Liquid & Envy site, there are two separate smoking areas that are purpose-built covered balconies with tables and chairs, encouraging longer dwell times.
Hickman added: "Use of scent passed through the air-conditioning - topical in the press - is being universally adopted. The ban has not resulted in a major decrease in trade."
The analyst also noted that Luminar had rationalised its product range, reducing lines stocked from 400 to 200 at Oceana, and from 200 to 150 at Liquid.
"These reductions achieved the three-year product cost-saving target in the first year, and made a big contribution to gross margin improvement of 70 basis points announced at interim.
"Rationalisation is being taken further with the definition of 65 core brands and 38 others which may be stocked with permission.
"Further margin benefits should therefore flow."