3D write down hits Luminar Leisure
Late night operator Luminar Leisure has reported a post-tax loss of £21.5m for the year to 26 February after writing down the value of its investment in 3D Entertainment.
The operator wrote down the value of its 49% investment in 3D Entertainment — which runs 57 bars, mainly under the Chicago Rock Cafe brand — by £24.1m to £3.6m and it continues to carry an interest bearing loan of £19.3m plus acrued interest of £3.4m. It will now sell its investment in 3D.
Luminar also incurred impairment charges of £8.1m within its own estate, £1.5m on assets for sale and incurred further charges of £2.8m from the sale of bars to Cavendish Bars. Profit at Luminar last year was £3.8m.
The operator now has 89 nightclubs under the brands of Oceana, Liquid and Lava & Ignite. Profit before tax and exceptionals was in line with market expectations at £20.3m — compared to a £31.5m profit last year. Earnings before interest, tax, depreciation and amoritisation (ebitda) was £51.3m — down from £57.7m last year.
Falling drinks prices
Same outlet sales were down 3.6% due to "due to lower market retail prices for alcoholic drinks and lower admissions in early part of the year" while ebitda for its well maintained venues stood at £0.7m. During the year it invested £31.4m in rebranding and modernising seven units.
It attracted 15.7m people into its clubs during the year — a fall of 3.5% on a smae outlet basis for last year. Fridays and Saturdays account for 59% of admissions but Tuesday to Thursday admissions saw an uplift of 4.5%.
On average, sales per head were 0.4% up on last year at £12.29 with admission income rising 6.4% to £3.32 per head. However, drink sales fell 2.5% to £8.30 as the average price of a drink fell 10.6% on last year.
Chief executive Steve Thomas said he would welcome initiatives to end the sale of cut-price alcohol. "It is clear that market pressures which have been building for some time and initially led by supermarkets are having a significant impact on the price of alcohol, with irresponsibly low pricing in some areas leading to a public expectation of unsustainably cheap alcohol," he said.
"The social and commercial consequences of this trend are unwelcome, and we support initiatives to eliminate instances of irresponsible selling and pricing of alcohol."
Thomas said that Luminar's financial position was "secure" with headroom in its bank facilities and covenants, and no need to refinance until 2012.
In the nine weeks to 30 April, Luminar said same outlet sales were down 3.8% on last year although footfall was up 3.2%.
"Luminar has the pre-eminent portfolio of late night venues in the market place," he said. "We are managing them efficiently in extremely difficult economic conditions and we believe we are outperforming our competitors.
"We are strong financially and with the steps we have taken our balance sheet will strengthen further enabling us both to maintain our leading market position and to emerge even stronger."
