Reilley: Sector not ‘all doom and gloom’ as Loungers posts record results
The business also reported a revenue rise to a record £283.5m (up 19% versus FY22 (£237.3m) and 85% versus FY19 (£153m)) while stating it could open “at least” 600 of its Lounge concept across the UK in the future.
Also in its FY23 results ended 16 April 2023, adjusted EBITDA (earnings before taxation, interest, depreciation and amortisation) dropped to £47.3m from £53.6m in FY22; operating profit fell to £14.7m from £28.4m in FY22, which Loungers stated reflected Covid support measures from the Government in 2022; and profit before tax was £7.3m (FY22: £21.6m).
Reilley said: “Since emerging from the Covid period, the industry has been significantly impacted by soaring energy costs, high inflation, the rising cost of labour, the cost-of-living crisis, and rail strikes (most acutely felt by London-centric businesses) and lobbying for more Government support continues.
“While highlighting the issues the sector continues to face and seeking more Government support is understandable, it concerns me that hospitality is now viewed as a sector that is still very much on life-support.”
No apology for success
Reilley continued: “Clearly it is very challenging at the moment, particularly for smaller independent businesses in our sector who have been hit by outrageous and unsustainable energy costs. But, surely, we need to start to provide some balance to the way the sector portrays itself, because it is simply not accurate to characterise it as being all doom and gloom.
“As our results show, Loungers is doing extremely well and I make no apology for the success we continue to enjoy.
“And Loungers is by no means alone. There are countless other hospitality businesses that are growing, investing, creating jobs, building their brands, and being ambitious. A lot of these businesses, almost all of which are privately owned, are not making the same mistakes as others, because they have learnt from them, and instead of pausing their innovation and evolution post-pandemic they have accelerated it.”
He added Loungers is set to open “another record number of new sites in FY24” to add to the 29 it opened in FY23, including its first north-east location for Lounge, which will break through the 200 sites landmark and “with a sizeable runway ahead of us, we believe there is scope for at least 600 Lounges across the UK”.
1,000 jobs created
On current trade, lfl sales have risen 5.7% in the 12 weeks since the end of FY23 and new site openings continue to perform “exceptionally well”.
Loungers chief executive Nick Collins said: “During the year, we opened 29 new sites creating around 1,000 new jobs, launched an exciting new roadside dining brand and achieved industry-leading lfl sales growth.
“Based on our experience, the UK consumer remains positive, inflationary pressures are diminishing and recruitment challenges have eased.”
Loungers operates the Lounge and Cosy Club brands of which there are currently 195 and 35 respectively. It also launched roadside dining concept Brightside late last year and has a third site opening in Honiton next month (August).
