Shares in cafe-bar operator Loungers PLC (AIM:LGRS) reached a one-month high after it said profits would be “slightly ahead” of market expectations, after a strong performance so far this year.
In a trading update for the year to 17 April, the 195-location group said it “recovered strongly” from subdued trading in December.
The operator of the Lounge cafe-bars and Cosy Club restaurant-bars said revenues reached a record £237.3mln for the year, with 27 new openings and like-for-like sales up 22.1% on a three-year comparison basis.
Chief executive Nick Collins said: "We continued to deliver underlying, volume driven like-for-like sales growth despite the uncertain consumer backdrop and we are well-positioned to increase share in the coming months through our new site opening programme and value for money offer.
“It has been a phenomenal effort from our team to open 27 fantastic new sites in what has at times been a difficult year. The new site pipeline is in excellent shape and we are optimistic as we look ahead to FY23.”
The shares were up 5% to 257.8p mid-morning on Tuesday.
Broker Liberum said debt reduction was also significantly ahead of expectations with the strong working capital rewind reducing net debt to £1.2mln from £47.5mln a year ago.
"This puts the business on a strong footing to continue to add at least 25 new sites pa with the potential to accelerate."
Analysts have hiked 2022 underlying earnings (EBITDA) forecasts 5% to £40mln but left future forecasts largely unchanged and kept the target price at 400p.