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Thu 18th Jul 2013 - Breaking News - UK's largest nightclub company reports profit
Luminar reports profit in first full year: Luminar, the UK’s largest nightclub company, has reported a profit before tax of £1.3m on turnover of £89.9m in the 12 months to 23 February. The company, which was bought out of administration by a team led by Peter Marks in December 2011, had EBITDA of £7.3 million (pre non re-occurring costs). Luminar operates 53 nightclubs nationwide from its Milton Keynes head office from The Institute in Aberdeen to Cameo in Bournemouth employing some 2,500 people. The last 12 months has seen a period of consolidation and investment to arrest the decline and develop a clear plan to rebuild the business. Luminar’s chief financial officer Russell Margerrison said: “This is an impressive set of results that demonstrates that the business is heading in the right direction. We have delivered strong financial progress, paid down our final deferred consideration payment ahead of schedule and are now in a position to continue to invest in our estate and our people to build a profitable future.” As part of its business transformation plan, the company has a robust investment programme that will see 60% of the estate invested in by the end of the 2014 financial year, with the aim to complete the schedule by 2015. During the course of the period, the Group invested £2.4m in refurbishing units in York, Edinburgh, Crawley, Aberdeen and Eastbourne, and on the acquisition of the lease on Casino nightclub in Guildford. Additionally, a further £1.6m was spent on minor refurbishments, equipment upgrades and other improvements elsewhere in the estate. Margerrison said: “When we acquired the business, one of our key priorities was to refurbish the estate which had been under-invested for many years and the quality of the experience fell way below what our customers expected. We now have a robust plan in place that will touch the majority of the estate by the end of our next financial year, together with a longer term view of re-investing to keep our brands and venues up to date.” Current trading to date in the 2014 financial year remains in line with expectations, with the refurbishment programme delivering returns on investment of over 50% and improving the overall customer experience. The company recently signed a new supply contract with Matthew Clark and is investing heavily in developing its social media activity, key for interacting with its core customer profile. The company said the late night sector continues to face a number of challenges with additional tuition fees for students and high unemployment impacting the 18-24 age group market. However, the actions taken to reposition the business and the plans that the company has put in place to re-invest in its estate, leave it well positioned to make further progress this year. “This is a really solid performance which demonstrates that there is still positive upside in the UK nightclub market for professional and well-funded operators. We have worked hard to transform the business and whilst we’ve made solid progress, there is still a lot more to do,” added Margerrison. A few months ago, Marks told Propel: “The first year has had its trials and tribulations. Buying a business out of administration comes with a lot of headaches – setting up new accounts with suppliers, getting credit terms, and negotiating with landlords. The downward momentum during administration was quite seismic and turning around the business without capital investment was difficult. We applied a volume-income-profit approach to every session at every nightclub. We sought to create volume first, then drew back on the offers to create income from which profit flows. The process was slower than we originally envisaged and it was September and October last year before we felt things were moving positively for us.” A “granular” session-by-session, venue-by-venue approach has had some very positive outcomes at sites.


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