Luminar anticipates dark times ahead

NIGHTCLUB operator Luminar, which owns the Lava and Ignite and Jamhouse venues in Edinburgh, has admitted that the current financial year is likely to be one of the most difficult in recent times.

In a management statement issued ahead of the company's AGM today, Luminar revealed they had seen a drop in footfall at venues across the UK over the last nine weeks.

This had a slight effect in sales, which the company said had been off-set by an increase in spending per-head by customers.

Between February and July, the company saw the effects of the deteriorating economic climate, a marked change in weather and the Euro 2008 football tournament, all of which were said to have contributed to the decline in footfall.

The company said like-for-like sales over the first 19 weeks of the current financial year were down 2.4 per cent across its venues, although its 48 'branded dancing' nightclubs saw like-for-like sales rise 1.9 per cent.

This was far less than the 14.4 per cent increase in sales seen over the same period last year.

The company said that while the start of the financial year had been solid, the second quarter was trading against 'tough comparatives' and the disruptive effect of carrying out over 12 rolling refits, which reduced the capacity of several clubs.

The group's 2008/09 development programme was progressing well, with three new branded openings and ten refurbishments already completed, and work was on track to complete a further four rebrands and three refurbishments before the end of September.

The statement insisted that Luminar remained financially strong, with 'highly cash generative' operations, and the company plans to continue financing its development through its existing cash flow and banking facilities.

Cash net debt currently stands at £150.7m and Luminar has total debt facilities of £180.0m, which will not need renegotiating until 2012.

And the group insisted Luminar was better positioned for this economic climate than it would have been in previous years. This strength would be used to mitigate some of the impacts of factors outside their control to drive footfall.

Plans were also underway to make savings across the group.

Luminar chief executive Stephen Thomas said the company would focus on trying to help its customers in what he expected to be very difficult times.

"There's no getting away from it, but at this point in time we have some of the best venues in the UK, and we will be putting all our efforts into making sure people can still go out and enjoy themselves in the times ahead.

"We will try to offer good value for money, and to make things a little bit cheaper wherever we can."