Ambitious Loungers chain looking to double restaurant empire
Profits at the restaurant chain Loungers have plunged by £14m over the last 12 months despite a record increase in revenues.
The Bristol based restaurant chain which is aiming to build an empire of 600 restaurants saw profits fall from £21.6m to £7.3m over the last three months.
Revenues were up to £283.5m from £237m but the company has been hit by a mixture of increasing costs and a reduction in government support over the last year.
Despite the fall in profits the company said it achieved record revenues and opened 29 new branches over the last 12 months.
It has identified potential for 600 Loungers and is continuing to roll out its new roadside restaurants under the Brightside brand,
Loungers said inflationary pressures are now showing signs of falling and consistently strong new openings in a variety of locations continue to increase average levels of sales.
There is a strong pipeline of new sites, with internal capability developed to accelerate to around 34 openings next year.
Chief executive Nick Collins said: “I am delighted to be announcing another excellent set of results for Loungers.
“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.
“This is the seventh year in succession we have delivered industry leading sales growth and over that period the estate has grown from 44 sites to 232 today.
“We are proud to be making a positive contribution to high streets and communities across the UK and there are hundreds more locations around the country for us to target.”
He added: “The UK consumer remains positive, inflationary pressures are diminishing and recruitment challenges have eased.
“As an example, a few weeks ago, we opened Ormo Lounge in the seaside town of Llandudno which achieved a record level of sales for any new Lounge opening in our 22-year history, reflecting the relevance of our offer and how well we trade by the coast.
“More broadly, we are excited about our ongoing roll-out programme and the opportunity to bring our culture and hospitality to around 34 new locations in the coming year, with many more to come beyond that.”
Founder and chairman Alex Reilley added: “Loungers has been a listed company for over four years now and in that time it’s fair to say we have had to deal with some unprecedented challenges, most notably the Covid pandemic.
“Despite having to be constantly reactive, and at times having to roll with multiple punches, the executive team, masterfully led as ever by Nick Collins, has risen to every challenge.
Our brands have proved to be exceptionally resilient and, through constant innovation and evolution, our offer is more relevant and compelling than it has ever been before.”
He added: “Whilst the majority of businesses in our sector have struggled, Loungers has thrived, and whilst many of our peers still talk about ‘recovery’ we have been back to full speed for over 18 months now – with the business enjoying significant growth despite the challenging backdrop.
“There is a great deal for the business to be extremely proud about, not the least the fact we have created 3,675 new jobs in the last four years – creating fantastic career opportunities for people from all backgrounds, all over the UK.
“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.
“Whilst 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.
“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.”