Good morning, it's Paul here with the SCVR for Weds. Please see the header for trading updates & results that I'll be looking at today.

Today's report is now finished. There's very little small caps news today.

As usual, this is initially a blank post (which we call a placeholder), for you to add your comments from the 7am RNS releases.

Top Tip - if you set a friend/family/your landline as emergency contacts on your mobile, then if an honest person finds your phone when you lose it, they can contact your emergency contacts when not possible to unlock the phone. Struck me as a good idea, so I'm passing it on.


Loungers (LON:LGRS)

Share price: 107.5p (pre market open)
No. shares: 102.4m
Market cap: £110.1m

Trading Update

Loungers, the operator of 165 neighbourhood café / bar / restaurants across England and Wales under the Lounge and Cosy Club brands, announces the following update.
  • All 165 sites now open
  • LFL sales from re-opening (4 July) to now (2 August) slightly negative, at -1.7% - this is really impressive in my view
  • Nothing said re costs, profitability, or liquidity
  • Fuller guidance to follow in late Sept, with full year results (19 April 2020 year end)

My opinion - this update is light on information, but the LFL sales number is the key one, and that's remarkably good. Given all the distancing restrictions, and lower footfall, to be delivering sales only a whisker below last year, is really outstanding. I see this as strongly bullish for the share price. It's a pity then that it's so illiquid.

There's a very helpful update note on Research Tree, which puts today's news into perspective - namely that LGRS is trading way ahead of industry average data of c.30% minus LFL sales. It benefits from having off-pitch sites, in suburban locations, rather than town centre sites. Also it points out that LGRS sites are outside London, and transport hubs. Therefore its community sites might be a beneficiary from work from home, and benefit from lack of competition.

Overall, very positive. However, the downside risk is that bars/cafes could be forced to close again, as we're seeing in some countries abroad. Therefore I can understand why many investors just want to avoid this sector altogether. My sector expert tells me that Loungers management are the best in the business.


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