Loungers, the operator of the Lounge and Cosy Club café-bar chains, today reported a 33% drop in revenues as its chief executive said the company has been saved from the pandemic's worst impacts by its suburban and market town base.
The Bristol-based firm, which has 168 venues across the UK and employs 5,000 people, reported revenues down £26.3 million to £53.5 million in the 24 weeks to October 4.
From today it will have just three sites open in the least restrictive Tier 1 areas, with 60 venues set to remain closed under Tier 3, and 91 sites trading under Tier 2 restrictions.
In Loungers' results statement, chief executive Nick Collins labelled the Tiers restrictions "bewildering" and "unfair" and said the Government's "ill-thought through policies... have brought much of our industry to its knees".
He told the Standard that he sees the £1,000 Government grant to wet-led pubs announced yesterday as "just disgraceful and insulting".
"I don't think there's any justification for the way that hospitality has been singled out," he said. "Government need to work a lot harder.
"We are not as exposed to the worst impacts of Covid just because of the types of locations where we trade - we are in secondary suburban high streets and market towns, so we don't have exposure to central London and big office communities and travel hubs and tourism destinations, and a result the impact on us has been less severe than on other operators.
"But the next few months are going to be difficult, there's no doubt about that."
Collins is confident Loungers can comfortably see out the pandemic, with a vaccine on the horizon, cash reserves following a raise over the summer, and a reduction in non-property net debt by £21.9 million to £13 million over the full 2020 year.
The company said it outperformed the market over the summer, delivering likefor-like sales growth of 25.1 per cent between July 4 and October 4, and management predicts the firm will be back to opening 25 sites a year by the financial year ending April 2022.
Collins said: "We are delighted with what we think is a pretty resilient performance in difficult circumstances.
"We are fortunate in that we have a strong balance sheet, we raised capital in the summer during the first lockdown from our shareholders, and renegotiated our banking facilities, so our balance sheet is strong and from a liquidity perspective we re in a good place."
Shares in Loungers jumped by 6.31% on Wednesday morning.