Loungers Share Discussion Threads

[mcrudden] 31/5/2019 10:53

Good business and brand...the one near me always seems busy. Opened a small position here let's see......

[alphabeta4] 10/5/2019 13:33

I thought it worth starting a thread on this. It's a recent new issue (29/4/19) that seems a bit under the radar. Analysts originally expected it to be valued at £250m-£300m but it was got away at £185m or £212m including debt. Only institutions could apply.

The business has two key brands - Loungers and Cosy Club. Loungers is an all day cafe-bar chain, cosy club more formal bar / restaurants. As at 1/4/19 split is 122 Loungers and 24 Cosy clubs.

I've recently had one open near me and I've visited it a few times and found it pretty busy with a diverse range of customers. It isn't a business looking to compete on price but was also not that expensive either. Looking around it felt decent value enough for the drinks and food on offer along with the pleasant interior. I have sampled the food and would do so again.

The business is very much at the growth end side of things, (LFL was 6.4% in the 24 weeks to October vs 0.9% for the sector and Christmas came in at 11%). The plan is to open c25 per year. CACI (the planning consultancy) thinks there is the opportunity to grow to 400 Lounges and 100 Cosy Clubs.

Proactive investors have the business set to deliver £20m adjusted earnings making for a forward of c10.1 at £2.20 off a business achieving 39% CAGR. That looks very cheap to me, at the time of my research RBG was on 11.2 with a much more uncertain earnings performance and JDW on 17.1 off a far weaker growth profile.

Two of the original founders remain (Alex and Jake) and Nick Collins (CEO) and Gregor Grant (CFO) both have 15 years experience in hospitality.

Lion Capital has been the largest shareholder since Dec 2016, they did use the issue to sell £11.6m of their holding but remain 38.7% holders. Alex and Jake also reduced around a quarter of theirs but retain c7% of the company each. Lion are now on 6 month lock in, directors 12 months.

Overall if they continue to perform IMHO there could be a decent amount to go for here as they build a track record and as awareness of the company grows. As I understand it FUL trades at 21.8 forward and feels a similar successful smaller outfit achieving a decent growth profile.

The usual disclaimers apply, the accuracy of the above is on a best endeavours basis and as always DYOR.

Admission doc etc:


Investor presentation 2/5/19:


Various articles: