Tomorrow this £277m capitalised group, which is the leading operator of all-day café/bar/restaurants across the UK under the Lounge, Cosy Club and Brightside brands, will be holding its AGM in one of its Lounge venues in Bristol.
In early July the group reported its results for the 53 weeks to 21st April, they showed a record year for sales, profits and site openings.
Revenues were up 24.7% at £353.5m (£283.5m) with a 56% advance in pre-tax profits to £11.44m (£7.33m), lifting its earnings 30.8% to 8.5p (6.5p) per share.
There are some 232 Lounges across the country, 36 Cosy Clubs and 3 Brightsides.
The group has a policy of opening 30 new locations a year.
Analyst Jack Cummings at Berenberg recently increased his Buy note Price Objective to 380p.
He noted that:
“Loungers is one of our top picks in the leisure space and was placed in our growth bucket at the start of this year.
Year-to-date, the shares have risen by 20%.
We remain of the view that Loungers’ industry-leading like-for-like growth should continue, its rapid rollout of new Lounges should be sustained, and margin expansion should come through over the coming years as cost pressures subside.”
It has been reported that the shares are trading on 18 times and 15 times price to earnings for Berenberg’s full-year 2025 and full-year 2026, which is broadly in line with its two-year historic averages.
Analyst Anna Barnfather at Panmure Liberum rates the shares as a Buy, looking for 400p.
Her estimates are for the current year to April 2025, to see sales of £394m, profits of £17.2m and earnings of 11.3p per share.
For the 2026 year she goes for £452m takings, £21.9m profits and 14.7p earnings.
Tomorrow morning, I am expecting the group to issue a Trading Update up to the start of this month, which hopefully will give the group’s shares, now 267p, another kick upwards in price – while noting that they hit 296p in July after the results.
(Profile 03.09.19 @ 205p set a Target Price of 275p*)
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