Loungers Share Discussion Threads

[edmonda] 26/4/2024 10:45

“All day” success, all year round (FY Trading Update)

Loungers has announced record FY24 Sales of £353.5m, up 24.7% and 22.2% excluding the 53rd week. This exceptional performance was 2.7% ahead of our estimate as FY24 LFL sales growth of 7.5% was maintained into the final 21 weeks, outperforming the industry again. Even more impressively, FY23/FY24 new sites contributed c.15% to revenue growth as Loungers’ unique all-day café-bar model continues to attract new customers nationwide, ranging from coastal towns to mixed use retail / leisure schemes. Sales leverage and easing inflation has led to FY24E Adj. EBITDA ahead of expectations and we raise our FY24 Adj. EBITDA by c.3% to £43.5m (IAS 17 metric).

We recently initiated on Loungers detailing why its profitable model and self-funded growth was undervalued. The 257-site group still has huge scope to grow towards its ambition of over 650 sites, driving 17% CAGR in Revenues, 19% CAGR in Adj. EBITDA and 23% CAGR in Adj. EPS FY23-FY26E.

Whilst Loungers’ share price has rallied 10% in the past month, we maintain our view that this high growth is not reflected in the group’s valuation. We raise our Fair Value to 370p, based on 8.0x our new calendar 2025 EV/Adj. EBITDA.

Link to report:

[edmonda] 27/3/2024 16:47

Delivering self-funded growth “all day” long - Initiation

Loungers is an award winning, uniquely positioned all day café-bar group that has grown revenues an impressive 22.5% CAGR FY16-FY23. Comprising of Lounges, Cosy Club and Brightside, the 257-site group still has huge scope to grow towards its conservative ambition of over 650 sites.

Loungers is profitable with improving margins and we forecast will generate over £100m free cashflow (pre-expansion capex) FY24E-FY26E. This, we estimate, will fully fund c.100 new site openings over the next three years driving 16% CAGR in Revenues, 18% CAGR in Adj. EBITDA and 20% CAGR in Adj. EPS FY23-FY26E.

This high growth is not reflected in the group’s valuation, in our view. We initiate coverage with a Fair Value of 360p, based on 8.0x cal 2025 EV/Adj. EBITDA.

Link to research note:

[alphabeta4] 25/3/2024 14:41

Nice little puff piece in The Sunday Times.

[1c3479z] 07/3/2024 11:44

yngn and lgrs are picks of hospitality according to broker but whole sector is under a cloud of the NLW and no VAT relief in the budget.

[melloteam] 07/12/2023 11:38

Just to let shareholders and prospective investors know that Loungers will be presenting on the MelloMonday webinar on Monday 11th December 2023, starting at 5pm.
The programme is as follows:

5.00 pm Stephen English presents ‘Turnarounds – when and how to play’
5.30 pm Company presentation by SigmaRoc PLC
6.10 pm Company presentation by Loungers plc
6.50 pm Educational session
7.10 pm Company presentation by Eagle Eye
7.50 pm Company presentation by Windward
8.20 pm BASH panel with Damian Cannon and Mark Simpson

There will be over 500 investors attending and these are very popular shows with company presentations, fund manager and investor interviews, and panel sessions.

Tickets are still available and if you would like one at half price then enter the code MMTADVFN50.

[crumppot] 24/11/2023 10:22

Hope there are no surprises!

[1choip] 24/11/2023 10:00

Formal half year results will due on next Monday

[1choip] 21/11/2023 12:39

Where is tr1 buy?

[alphabeta4] 21/11/2023 11:36

What's going on? Price moving out of nowhere.

[1c3479z] 13/10/2023 17:17

market quite unforgiving: came out with a decent report today, restaurant group taken over yesterday yet the price ended marginally lower.

[edmonda] 12/7/2023 08:02

"Record revenue and industry leading LFL growth"


Loungers has reported record revenue of £283.5m, up 85% on pre-Covid FY19. 29 new sites opened during the year, taking the total to 222 at year end. Excluding the continued estate expansion, like-for-like revenue growth was up 7.4% on the last year, and an impressive industry-leading 17.6% over the last three years.

Inflationary pressures have impacted margins, especially wage inflation, while the results also reflect the end of government Covid-support measures. The adjusted EBITDA margin (IFRS16) was 16.7%, down from 22.6% in FY22 and 18.7% in FY19. However, management reports that inflationary pressures are easing and they aim to restore margins to pre-Covid levels over the medium-term.

Loungers’ continued expansion has allowed it to develop a strong understanding of its optimal locations and density of sites. The group sees longer-term scope for at least 600 Lounges and 50-65 Cosy Clubs across the UK, giving significant headroom for growth from the current portfolio of 195 Lounges and 35 Cosy Clubs. The larger prize remains within the Lounges offering, which continues to push further into the North and the South-East. We also expect the first Lounge in Scotland within the next couple of years.

Brightside, the new roadside dining brand, is up and running, with the first two sites open near Exeter and Saltash, and a third expected to open shortly. Brightside is focused on busy A-roads near towns and has met with largely excellent customer reaction.

LFL sales growth in the first 12 weeks of FY24 has been 5.7%, despite the Easter timing, and new site openings continue to perform very well, achieving record levels of sales.

Brief note here:

[darrin1471] 25/4/2023 13:21

FY trading update:
"like for like sales growth, up 7.4% on a one-year basis and 17.6% ahead of pre-pandemic levels on a three year basis. The Group is pleased to have delivered record total revenue for the financial year of GBP283.5m, up 19.5% on the previous year (FY22: GBP237.3m)."
"Our balance sheet remains strong, with non-property net debt at 16 April 2023 of GBP6.2m (17 April 2022: underlying net debt of GBP2.6m). Year-end net debt reflects the acquisition during the year of three freehold sites for a total consideration of GBP3.9m and the acceleration of our site roll-out programme.
During FY23 the Group opened 29 new sites, comprising 24 Lounges, four Cosy Clubs and our first roadside site under our new Brightside brand, taking the portfolio to a total of 222 sites at year end."
"The property market continues to work in our favour and our pipeline of around 35 sites for FY24 is incredibly exciting"

LfL sales growth of 7.4% has to be seen against a background of higher prices. Are sales volumes flat? Some of Loungers customer base has to be squeezed by higher fixed mortgage rates in the years ahead. If food inflation rolls over then sales growth may be difficult to maintain and may be taken badly by the market. Equally a return of market interest in growth shares could result in a big upside plus lower food input prices and fixed prices could lead to higher margins.

Currently I do not hold LGRS but a lower entry point or a change in growth share sentiment could change my mind.

[darrin1471] 05/1/2023 12:02

Don't think there is any rush.
Search "loungers PLC" on youtube for investor meets. A good and easy place to start the research

[crumppot] 05/1/2023 11:55

Darrin 1471 thanks. This stock is new to me but keeping an eye on it!

[darrin1471] 05/1/2023 11:08

I have been watching.
Shares were unmoved by 30th November update and not expecting another update until end of April.
JDW and MARS both appear to have more upside on return of normal trading and valuations.
Loungers have several outlets local to me. Customers appear more vulnerable to higher fixed mortgage rates over the next few years than other pubs.
Growth plans make it worth watching though for an entry point.

[crumppot] 05/1/2023 10:50

Does anyone have any further news re LGRS? They seem to be opening units all over the country and doing well.

[kalai1] 14/10/2022 11:43

Loungers, a leading operator of all-day café/bar/restaurants under the Lounge and Cosy Club brands, issued a trading update for the 24 weeks ended 2 October 2022 this morning. The Group delivered like-for-like sales growth of 17.0%, versus the period 22 April to 6 October 2019, i.e pre-COVID. Expansion remains the name of the game. Since the start of the financial year the Group has opened 11 new sites, comprising eight Lounges and three Cosy Clubs, taking the portfolio to 206 sites, and it plans to open a further 19 sites in the current financial year. More solid top-line growth should be expected. The Group posted its maiden net profit in FY22, a base from which positive EPS should now grow over the medium term. Valuation looks pretty decent with PS ratio at 0.89x in the top third for the Hotels & Entertainment Services sector. The balance sheet remains strong with non-property net debt at 2 October 2022 of £9.5m. Share price has corrected around 1/3 over the past year and lacks momentum, the macro environment is the cloud for discretionary spending in the year ahead. There is no obvious rush to buy, LGRS looks to be a share to monitor for now...

...from WealthOracle

hxxps://wealthoracle.co.uk/detailed-result-full/LGRS/582

[janekane] 07/6/2022 06:33

So much for the Midas tip in the Sunday mail 4/6/22
The author of this item forgot that all hospitality venues relying on feet through the door if the energy crisis is not sorted the first things to suffer are normal peoples spending power and inflation will make leisure outlets suffer dramatically as money gets scarce
Look at mars and weatherspoons it’s problems are being reflected in their Sp

[mashman] 08/12/2021 19:46

Despite the sector carnage, this was well up today. I haven't bought yet because I thought it was looking a bit expensive but FOMO is getting me. Any drop on these new restrictions and I'm in. What's not to like with these guys.
HOST was another resilient one today.

[seatank8300] 03/11/2021 10:36

hxxps://www.investormeetcompany.com/investor/meeting/introduction-to-loungers

Very positive investor update video, accessible via the above link

[seatank8300] 03/11/2021 10:36

hxxps://www.investormeetcompany.com/investor/meeting/introduction-to-loungers

Very positive investor update video, accessible via the above link

[alphabeta4] 15/10/2021 08:02

Nice update - has driven a new Liberum note with sales now at £222m from £216m for the current year and a big eps upgrade 11.3p to 13p from gearing effects. Have upped their target £3.50 to £3.75.

[igbertsponk] 17/6/2021 10:08

Clever bunch running this. Amazing growth.

[alphabeta4] 17/6/2021 09:51

Nice little update today, Liberum added £4m to FY22 sales (now £211m) and upped target price £3.30 to £3.50 as a result.

[tomps2] 28/5/2021 13:58

piworld interview: Ken Wotton’s Investing Principles talks about Loungers (LGRS) at 20m43s

Watch the video here:

Or listen to the podcast here: