Covid-19 Trading update

RNS Number : 6748G

Loungers PLC

18 March 2020

 

18 March 2020

Loungers plc

("Loungers" or "the Group")

Covid-19 Trading update

Loungers, the operator of 167 café/bar/restaurants across England and Wales under the Lounge and Cosy Club brands, provides the following update in respect of Covid-19.

Since the announcement of the Group's interim results on 4 December 2019, the Group has continued to trade in line with expectations, with like for like sales of +4.4% for the 47 weeks to 15 March 2020.

Over the two weeks to 15 March 2020, trade continued to hold up well with like for like sales of +2.5%, demonstrating the resilience of the business. However, as a result of the Government's advice to avoid hospitality venues, we are beginning to experience a fall-off in sales and anticipate a very challenging trading environment with significantly lower sales in the coming weeks.  The partial or complete temporary closure of all of our sites is a potential scenario.

We are not in a position to quantify the impact of Covid-19 on our financial performance at this stage, however we expect a material reduction in our trading performance for the remainder of FY20 and into FY21.

We are taking all the steps available to us to proactively manage our costs, protect our cash flow and secure shareholder value and the long-term success of the business in these unprecedented times. The roll-out programme has been paused for the time being, as has all capital expenditure. We have adopted a rigorous approach to reduce the cost base and protect cash flow in the business whilst being mindful of the need to regain momentum at some point in the future. Our historically low rent to revenue ratio will prove beneficial in this scenario where sales are severely depressed.

We have the ongoing support of our banks, together with Lion Capital, which remains a major, well capitalised shareholder, and are having constructive dialogue with them all with regard to optimising our funding position, maximising our flexibility to operate the business and emerging from this difficult period strongly. We welcome the measures set out by the Government yesterday which appear to go some way to support the hospitality sector.

Nick Collins, Chief Executive said:

"These are clearly challenging times and over the last few days we have been working hard to protect and support our loyal and hard-working teams and ensure we are reassuring our customers and keeping them safe. The hospitality sector has been hit hard and whilst I welcome the fact that the Government has finally listened, it needs to do more, urgently, particularly in terms of protecting the financial position of the millions of people who work within the country's pubs, restaurants, clubs, cafes and bars. Loungers is a great business - we will come out of this stronger and in these difficult times we will continue to support the communities in which we trade to the best of our ability."

This announcement is released by Loungers and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in accordance with the Company's obligations under Article 17 of MAR. This announcement is being made on behalf of the Company by Nick Collins, Chief Executive Officer of Loungers.

For further information please contact:

Loungers plc Nick Collins, Chief Executive Officer Gregor Grant, Chief Financial Officer	Via Instinctif Partners
GCA Altium Limited (Financial Adviser and NOMAD) Sam Fuller / Katherine Hobbs / Tim Richardson	Tel: [phone]
Liberum Capital Limited (Joint Broker) Andrew Godber / John Fishley	Tel: [phone]
Peel Hunt LLP (Joint Broker) Dan Webster / George Sellar	Tel:  [phone]
Instinctif Partners (Financial Public Relations) Justine Warren Matthew Smallwood	Tel: [phone] or 020 7457 2005

 

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