Loungers PLC Bank facility extension and re-opening update (9038U)

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RNS Number : 9038U

Loungers PLC

09 April 2021

Loungers Plc

("Loungers" or "the Company")

Bank facility extension and re-opening update

Loungers, the operator of 168 neighbourhood café / bar / restaurants across England and Wales under the Lounge and Cosy Club brands, is pleased to announce it has further strengthened its financial and liquidity position and that its lending banks, Santander and Bank of Ireland, have approved a 12 month extension to the incremental GBP15.0m revolving credit facility ("RCF") that was put in place in April 2020. This additional facility now runs to October 2022 and provides the Company with total RCF facilities of GBP25.0m. Covenant tests at 18 April 2021 have been waived and subsequent quarterly tests until 26 December 2021 have been re-set to provide appropriate headroom to enable a full resumption of the Company's new site roll-out programme.

We intend to take a phased approach to reopening and will initially open 47 sites in England on 12 April for takeaway and external trading, and five sites in Wales on 26 April on the same basis, in line with the respective governments' suggested roadmaps. Assuming no changes to the roadmap, we plan to re-open all of our English sites by 17 May and our sites in Wales later in May subject to confirmation from the Welsh government.

In addition, we also plan to open four new Lounge sites in Wolverhampton, Stourbridge, Welwyn Garden City and St Ives by 26 May bringing the estate to 172 sites in total, comprising 142 Lounges and 30 Cosy Clubs. These new sites were partially fitted out going into lockdown at the end of December 2020 and are currently being completed.

We are approaching re-opening with enthusiasm and optimism, encouraged by how strongly the business traded last Summer and Autumn. Our sites have been completely closed since 30 December and we have used this time well, continuing to focus on evolution within Lounge and Cosy Club, as well as undertaking targeted investment in our sites, particularly in our outside trading areas. We remain confident that Loungers is well-placed to emerge strongly as the country comes out of lockdown.

We anticipate - and are ready to return to - a run-rate of 25 new site openings per year during the course of the year ending April 2022, assuming no further Covid interruptions. The pipeline of new sites is exceptionally strong and we continue to see a large number of attractive opportunities in the locations which we are targeting.

Nick Collins, Chief Executive of Loungers, said:

"Having been closed since 30 December , it is really exciting to be back in some of the sites, preparing to open our terraces to customers on Monday. Whilst it is frustrating that we have to wait until 17 May to re-open more fully given the steps we have taken to ensure our business is Covid-safe, it does allow us to re-open gradually, bring our teams back from furlough and get the supply chain back up and running.

"We expect to trade well once the estate is fully re-opened, particularly with our strong coastal presence as we look forward to a summer of staycationing. Planned new openings in Blackpool, Scarborough and Aberystwyth ahead of the summer holidays will reinforce this position. Our suburban and market town locations, combined with our flexible, all-day model, mean we are well-positioned as we look to the future.

"The most recent lockdown has given us a real opportunity to build a fantastic pipeline of new sites in what is undoubtedly a tenant-friendly environment. We will approach the coming months cautiously but are very keen to get back to opening 25 sites a year at the earliest opportunity with such excellent properties being presented to us, and we are grateful to Santander and Bank of Ireland for their continued support."

9 April 2021

For further information please contact:

 
  Loungers plc                                        Via Instinctif Partners 
   Nick Collins, Chief Executive Officer 
   Gregor Grant, Chief Financial Officer 
 GCA Altium Limited (Financial Adviser and           Tel: +44 (0) 20 
  NOMAD)                                              7484 4040 
  Sam Fuller / Katherine Hobbs / Tim Richardson 
 Liberum Capital Limited (Joint Broker)              Tel: +44 (0) 20 
  Andrew Godber / John Fishley                        3100 2000 
 Peel Hunt LLP (Joint Broker)                        Tel: [phone] 
  Dan Webster / George Sellar                         8900 
  Instinctif Partners (Financial Public Relations)    Tel: [phone] 
   Justine Warren 
   Matthew Smallwood 
 

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April 09, 2021 02:00 ET (06:00 GMT)