Loungers H1 profits slip despite 'sustained market out-performance'

Loungers said revenues had risen from £102.36m in the first half of 2021 to £122.32m a year later, reflecting the addition of 50 new sites. However, adjusted underlying earnings slipped from £27.08m to £19.3m as adjusted EBITDA margins contracted from 26.5% to 15.8%.

Operating profits fell almost £10.0m to £6.05m and pre-tax profits tumbled from £12.8m to £2.83m during the half. Diluted earnings per share also crashed from 10.4p each to 2.3p.

Loungers highlighted that "positive momentum" had continued over the first eight weeks of the new quarter, with the business "consistently out-performing the sector" and achieving "strong like-for-like sales growth", with three-year like-for-like sales across the 32 weeks to 27 November up 17.4%

"Whilst there is no sign of the cost of living pressures abating, we remain optimistic looking ahead to trading over the Christmas period," noted Loungers. "With 15 sites having opened year-to-date we remain on track to open a total of 30 new sites during the course of the financial year ending 16 April 2023, including our first Brightside site."

As of 0850 GMT, Loungers shares were flat on 192.0p.

Reporting by Iain Gilbert at Sharecast.com