Loungers Plc Share Chat (LGRS)

SEVEN in less than 2 days - so far.....

Been on the sidelines for a long while waiting for a good valuation, was a bit worried by the rise in expenses and the debt it had. Finally pulled the trigger on an extremely small number of shares in August 2024 just so I can start to monitor closer for a dip. The dip finally comes and its immediately taken private - long term shareholders will feel very disappointed at the TO price.

I'm not so sure I would personally want to have unlisted shares either, that's going to be incredibly illiquid to sell in the future..T212 would have likely force liquidated my position anyways.

The shares never performed because noone is buying AIM shares, hence all the companies are delisting.

It's a growth company so dividends aren't appropriate.

No take-private is ever going to overvalue a company.

Fortress will do well with it, so you have the option to roll-over your shares too Seatanks, or didn't you read the Offer?

The offer undervalues the company, which the founder and management team understand so they are rolling their shares into the new company. The board never found the right balance between growth, cash flow and dividends, which is why the shares never performed. Now us long suffering shareholders are ejected at a low ball price and suffer the consequences.

Rns out, blmey !

New note with audio summary here: https://www.equitydevelopment.co.uk/research/come-rain-or-shine-loungers-delivers

Loungers has achieved record 1H25 revenues of £178.3m, +19.2% on 1H24. 16 new Lounge bars and one new Cosy Club, together with last year’s new sites, contributed 14.5% whilst 4.7% LFL sales outperformed industry growth by over 3% due to Loungers’ all-day attractions.

This growth is especially strong considering the unseasonal weather, the negative impact of the Euro 2024 football tournament and the fall in UK consumer confidence.

Although our 2H25 estimates look cautiously set, inferring c.3% LFL and c.10% new site revenue growth, we make no changes to our FY25E forecasts at this stage, given the consumer uncertainty ahead of the Autumn Budget on 30 October.

The 273-site group still has huge scope to grow towards its ambition of over 650 sites, driving 14% CAGR in Revenues, and 21% CAGR in Adj. EPS FY24-FY27E. We believe this high growth is not reflected in the group’s valuation and reiterate our Fair Value of 370p / share (8.0x cal. 2025 EV/Adj. EBITDA).

Nick Collins, CEO, and Stephen Marshall, CFO of Loungers plc hosted an Investor Presentation covering its Full Year results for the period ended 21st April 2024.

Management discussed highlights, including a record year for sales, profits and site openings. They provided a detailed Financial Review and a thorough look at Strategy and Operations, including relevant Case Studies. Loungers highlighted the strong pipeline of new sites as well as strong trading performance over the first 11 weeks of the current financial year. Finally, the team answered a range of questions submitted by viewers.

The full video is available to watch, divided into chapters as below:

0:00:03 Introduction and highlights summary

0:01:39 Financial Review

0:18:03 Strategy and Operations Review

0:47:00 Conclusion

0:48:22 Questions & Answers

Link to video here: https://www.equitydevelopment.co.uk/research/loungers-plc-investor-presentation-fy-results-july-2024

Really good webinar with the CEO Nick Collins and CFO Stephen Marshall just now.

A few key points made were:

- Strong, consistent growth in revenues and working to get margins back up to pre-Covid levels

- Currently benefiting from falling food inflation

- Currently benefiting from low high street rents

- Staff retention is improving, staff encouraged to follow a career path, e.g. chefs to become site managers

- Very adaptable restaurants, selling all day and multiple styles of food - so very diversified and adaptable to food trends

- CEO and CFO seem calm, confident, sensible and honest

- Brightside roadside restaurants are an 'experiment' for now

- No plans for dividends in the 'short term' - apparently investors generally are not asking for this, given they are a growth story.

I've topped up

Do we think this will move the share price much, or is the good news already mostly priced in?

Loungers’ FY24 results illustrate the strength of its all-day café-bar model with record FY24 revenues increasing 25% to £353m and Adj. EBITDA (pre-opening costs) rising 26% to £59.6m, 1% ahead of our, and consensus, estimates. The group’s growth strategy is on track with continued food innovation, 36 new sites (and some record-breaking sales) and an expanded regional management structure. Meanwhile, whilst we make no significant changes to our recently upgraded forecasts, current trading of 5% LFL sales growth in the last 11 weeks and seven new Lounge openings, is very encouraging.

We initiated on Loungers earlier this year, detailing why its profitable model and self-funded growth was undervalued (see “Loungers: Delivering self-funded growth “all day” long”). The 257-site group still has huge scope to grow towards its ambition of over 650 sites, driving 14% CAGR in Revenues, 15% CAGR in Adj. EBITDA and 21% CAGR in Adj. EPS FY24-FY27E. Whilst Loungers’ share price has rallied 35% since March, we believe this high growth is not reflected in the group’s valuation.

We reiterate our Fair Value of 370p (8.0x our calendar 2025 EV/Adj. EBITDA).

Link to research report: https://www.equitydevelopment.co.uk/research/loungers-all-day-strategy-success-with-more-to-come

Https://www.proactiveinvestors.co.uk/companies/news/1051396/loungers-slated-for-big-profits-hike-tomorrow-1051396.html

Someone popped in a cool half a million today. Nice!

Loungers plc (LSE: LGRS), a leading operator of all day café/bar/restaurants across the UK under the Lounge, Cosy Club and Brightside brands, will be hosting a live investor presentation relating to its preliminary results for the 53 weeks ended 21 April 2024 at 1.00pm on Friday 12th July.

The presentation will be hosted by Nick Collins, CEO, and Stephen Marshall, CFO.

The webinar is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.

Link to register: https://www.equitydevelopment.co.uk/news-and-events/loungers-investorpresention-12july2024

Loungers need to declare a maiden dividend and reliable dividend policy, if necessary by moderating site rollout - that is the next step to actualising shareholder value in my view

Loungers has announced record FY24 Sales of £353.5m, up 24.7% and 22.2% excluding the 53rd week. This exceptional performance was 2.7% ahead of our estimate as FY24 LFL sales growth of 7.5% was maintained into the final 21 weeks, outperforming the industry again. Even more impressively, FY23/FY24 new sites contributed c.15% to revenue growth as Loungers’ unique all-day café-bar model continues to attract new customers nationwide, ranging from coastal towns to mixed use retail / leisure schemes. Sales leverage and easing inflation has led to FY24E Adj. EBITDA ahead of expectations and we raise our FY24 Adj. EBITDA by c.3% to £43.5m (IAS 17 metric).

We recently initiated on Loungers detailing why its profitable model and self-funded growth was undervalued. The 257-site group still has huge scope to grow towards its ambition of over 650 sites, driving 17% CAGR in Revenues, 19% CAGR in Adj. EBITDA and 23% CAGR in Adj. EPS FY23-FY26E.

Whilst Loungers’ share price has rallied 10% in the past month, we maintain our view that this high growth is not reflected in the group’s valuation. We raise our Fair Value to 370p, based on 8.0x our new calendar 2025 EV/Adj. EBITDA.

Link to report: https://www.equitydevelopment.co.uk/research/all-day-success-all-year-round

Loungers is an award winning, uniquely positioned all day café-bar group that has grown revenues an impressive 22.5% CAGR FY16-FY23. Comprising of Lounges, Cosy Club and Brightside, the 257-site group still has huge scope to grow towards its conservative ambition of over 650 sites.

Loungers is profitable with improving margins and we forecast will generate over £100m free cashflow (pre-expansion capex) FY24E-FY26E. This, we estimate, will fully fund c.100 new site openings over the next three years driving 16% CAGR in Revenues, 18% CAGR in Adj. EBITDA and 20% CAGR in Adj. EPS FY23-FY26E.

This high growth is not reflected in the group’s valuation, in our view. We initiate coverage with a Fair Value of 360p, based on 8.0x cal 2025 EV/Adj. EBITDA.

Link to research note: https://www.equitydevelopment.co.uk/research/delivering-self-funded-growth-all-day-long

I suggest you or they email Loungers about it, they are extremely responsive. Also, your friend won't get two unless he asks for two.

A friend has been telling anyone that they meet how in their local Velo Lounge in Bath a single slice of toast with marmite costs £2.95 - and apparently they counted it three times and each time there was just the ONE slice of toast on the plate for which they paid £2.95!!! They assured me that they will NEVER frequent a Lounge establishment ever again.

Now while I love to see Loungers posting great turnover figures and a healthy profit I think turning away customers by charging an extortionate amount for one single lonely slice of toast is not good business, heaven knows how many people my friend has told about the £2.95 slice of toast, but to me it’s not good PR.

Solution? Make the single slice a couple of slices and Loungers will still make a load of profit from that £2.95.

Https://www.proactiveinvestors.co.uk/companies/news/1034179/marston-s-loungers-and-gym-group-to-see-shares-rally-says-analyst-1034179.html

Https://www.proactiveinvestors.co.uk/companies/news/1031969/loungers-could-be-latest-hospitality-takeover-target-says-analyst-1031969.html

Https://www.proactiveinvestors.co.uk/companies/news/1031248/following-the-wagamama-takeover-is-loungers-the-next-undersold-proposition-1031248.html

Https://www.proactiveinvestors.co.uk/companies/news/1029661/loungers-undervalued-and-could-attract-a-bidder-say-analysts-1029661.html

I’m not sure what to make of the roadside announcement :/ I’ve never seen the attraction myself, and they are moving a little outside their success lane, but if they've identified a market gap to fill then I trust this management team to make the most of it. Also, starting with just a few venues rather than trying to take over a larger enterprise gives them time to see if their model will work outside of the town venues. If they get some traction from the first few then push on. Agree I would also prefer to see them stay independent.

Regarding the SP, I suspect the market may be waiting to see the results at the end of the month. Their October TU hailed the sales growth and the success of the roll-out programme but also noted the inflationary pressures without giving any guidance on earnings/margin. Rising costs and outlook will be key in the results IMO; it may now even need a successful start to Brightside reflected in the FY results (due in July; poss. TU in April) or even later before any decent re-rate?

Even with great results and the announcement of moving into the roadside sector the share price does not move. This company will get bought out by one of the big roadside operators, probably Eurogarages at some point. I would prefer to see them flourish as an independent company but nothing they do gets reflected in the low share price

Loungers has reported record revenue of £283.5m, up 85% on pre-Covid FY19. 29 new sites opened during the year, taking the total to 222 at year end. Excluding the continued estate expansion, like-for-like revenue growth was up 7.4% on the last year, and an impressive industry-leading 17.6% over the last three years.

Inflationary pressures have impacted margins, especially wage inflation, while the results also reflect the end of government Covid-support measures. The adjusted EBITDA margin (IFRS16) was 16.7%, down from 22.6% in FY22 and 18.7% in FY19. However, management reports that inflationary pressures are easing and they aim to restore margins to pre-Covid levels over the medium-term.

Loungers’ continued expansion has allowed it to develop a strong understanding of its optimal locations and density of sites. The group sees longer-term scope for at least 600 Lounges and 50-65 Cosy Clubs across the UK, giving significant headroom for growth from the current portfolio of 195 Lounges and 35 Cosy Clubs. The larger prize remains within the Lounges offering, which continues to push further into the North and the South-East. We also expect the first Lounge in Scotland within the next couple of years.

Brightside, the new roadside dining brand, is up and running, with the first two sites open near Exeter and Saltash, and a third expected to open shortly. Brightside is focused on busy A-roads near towns and has met with largely excellent customer reaction.

LFL sales growth in the first 12 weeks of FY24 has been 5.7%, despite the Easter timing, and new site openings continue to perform very well, achieving record levels of sales.

Brief note here: https://www.equitydevelopment.co.uk/research/record-revenue-and-industry-leading-lfl-growth

The numbers speak for themselves. If you want a tasty burger, a cold beer, a well made ****tail, or a decent coffee, at a reasonable price point, then Loungers is the place for you and most of Britain is voting with their feet (in through the door). There's a long runway for further openings across Britain and no interest in London, which is smart. This is a great business. I hope they can keep the cosy culture as they expand.

On Brightside, I see the market for this - it's not just about picking up traffic on long journeys, it's about offering a decent local place for all the above to more rural or semi-urban locations where there is nowhere to go within a 15 minute drive. That's how I see it anyway. If they do a good job with Brightside, I reckon they'll be filled with people, mostly local.

Their long term utilities hedge a couple of years ago was really smart, or lucky. By the time they need to renew this, utility prices will have normalised I reckon. I'm not worried about inflation with these guys anyway - their product is strong enough to manage through it alright.

Just brought in the local lounges in amersham is packed every night

Peel Hunt’s target price is 375p compared to Loungers share price currently of 190p.

https://www.proactiveinvestors.co.uk/companies/news/999338/loungers-undervalued-ahead-of-interim-results-says-broker-999338.html?rel=scroll

Went to a Cosy club - suggested by my niece - and it was a terrible experience. The service was terrible, waited ages for drinks and could see them waiting on the bar. Awful and wasn't cheap....my niece felt sorry for the trainee waiter and so I was obliged to leave him a tip he didn't deserve. Terrible. Never ever going back....not even if my niece pleads with me.
Hopefully their new 'Little Chef' (LC) mark 2 - another roadside attraction!! - will find a market. I tried the Heston Blumenthal revamped menu on the A303 LC many years ago, was quite good (shame they didn't pursue it)
Loungers not for me based on the Cosy Club experience. Good luck to investors

Yup, looking good here. Steady expansion of proven model without overstretching, lots of good sites available at suppressed rates just as they are growing further.
Buy/sell split on here today not currently matching actual market - 209.95/2.10 are buys.

At last everyone is waking up to the potential of this company. It appeals to “middle England” customers who are still going out but look for good quality reasonably priced food/drink in nice buildings. Their customers are not under the same financial pressures as customers of Spoonies foe example

As expected, super results and an acceleration in outlet growth. Super cash generation too.

This is a fantastic business: the attractive drinking, dining and coffee environment; the vibe; the value proposition; the fabulous staff. I believe Loungers will offset inflationary forces with delicate re-pricing and redesign of the menu, and economies of scale as the network expands. This is a business with a still long runway. Looking forward to full year results.

https://www.dailymail.co.uk/money/investing/article-10884423/MIDAS-SHARE-TIPS-slice-Loungers-pubs-bars-restaurants.html

Underlying net debt is reduced by £45m to almost nothing and 27 new sites have been opened in last 12 months. Implies a very profitable and fast growing business. Berenberg had a SP target of 390p but that may need updating. The company could be more informative for retail investors. Still believe quarterly updates would demonstrate the outstanding performance and encourage more investors.
Next update in July would be a time to see management expectations for FY2023 and if profits are rising when will a dividend be expected? Significant growth funded out of cash generated is compelling and the only downside is the impact of inflation and cost of living rise.

Another really impressive trading update

Although I am positive on this long term (5 year hold), short term be prepared for further falls as they never update the market. Worth following them on LinkedIn to see the number of openings and the quality of the sites. They are running this as a private company and not updating shareholders. You have to have a lot of faith that their strategy is right. In 5 years we should hopefully double our money

Would be good to get quarterly updates as a matter of course especially with the opening of more sites. Next update on revenue should benefit from new sites. Added 2000 at 250p shown as a sell. Good price.

Not believing all the negative Covid stories and think the present Omicron hoohah will peak and subside quicker than some commentators think. In any case Shares magazine has it as one of its "Picks" for 2022 so they should keep a good commentary going. Always on the lookout for new p/f additions.

The results were fantastic and if it was not for all the negative covid stories, I would have expected the share price to increase. This is a 3-5 year hold with potential to double your money. Great brand with a good business plan and unlike Wetherspoons taps into the middle classes who have disposable income to spend

Just me who liked the results?
Checked out the Lounger in Carmarthen recently. Another well ran establishment.

+27% May to October. Briefly popped in a site at Plymouth yesterday and it was rammed on a Thursday afternoon. Nice to see.

+26% 2019 levels end of May & June as restrictions eased. Hoping the demand continues. Surely Loungers will benefit from staycations

Welcome in Bristol. All very quiet in here. Not much chat. But super sp progress over past year.

Like the company and should do well post lockdown. Possibly already priced in but feels like it’s under the radar. GLA