Loungers to seek AIM float
Loungers has announced its intention to seek admission to trade on the Alternative Investment Market (AIM).
The restaurant-café-bar operator expects admission by the end of the month and said it will continue to target 25 new sites this year. It is not expected that majority stakeholders Lion Capital will have any representatives on the board post-admission.
The directors intend to continue to pursue an organic growth strategy, driven by the rollout of new Lounge and Cosy Club sites. Of the 25 new sites targeted, approximately 20 are expected to be Lounges and approximately five are expected to be Cosy Clubs.
The directors believe that admission will "position the group strongly for the next stage of its development" and further raising its profile, which will assist in attracting and retaining employees.
In the group's last financial statement for the year to 22 April 2018, it reported an increase in pre-tax profits from £3.2m to £5.6m and revenue growth of 31.9% to £121.1m, with like-for-like sales increasing by 6%.
Independent analysis by location planning consultancy CACI has identified the potential for more than 400 Lounges and more than 100 Cosy Clubs in England and Wales. The group opened 21, 20 and 22 sites in the 2016, 2017 and 2018 financial years respectively, and will have opened 25 sites and relocated one site by the end of the 2019 financial year. The group has a further 13 sites where contracts have been exchanged and 35 sites in legal documentation or at heads of terms stage.
Nick Collins, chief executive of Loungers, said: "I am delighted to announce our intention to list on AIM. It has long been the ambition of the founders and myself that Loungers becomes a listed entity. The listing will allow us to broaden the employee shareholder base and provide us with an appropriate capital structure to pursue our future growth ambitions.
"We have a growing business and clear expansion strategy to continue to rollout 25 new sites per year supported by a strong pipeline of sites and led by an experienced and committed management team. We believe our track record speaks for itself and look forward to the opportunity which lies ahead to deliver significant value for all shareholders."
Loungers operates 146 cafés, bars and restaurants across England and Wales under the Lounge and Cosy Club brands, with Lounges in suburban high streets and market towns and Cosy Clubs in larger market towns and city centres. The first Lounge was founded in Bristol in 2002 by friends Alex Reilley, Jake Bishop and Dave Reid. Reilley and Bishop remain active in the group.
GCA Altium is advising on the float with Liberum Capital and Peel Hunt acting as joint bookrunners.
Loungers sees record like-for-like growth of 11% over Christmas >>
Loungers eyes 500 sites as pre-tax profits grow to £5.6m >>
Loungers continue 25-a-year expansion plan with four openings this month >>
