April 29, 2020
Consumer / Retail / E-commerce / Leisure
GCA Advises Loungers on a Capital Raise
GCA is pleased to announce we assisted Loungers PLC (LON: LGRS), a leading operator of cafés, bars and restaurants across the United Kingdom, on raising capital through an extension of its banking facilities and a new ordinary share placement. The proceeds will enable the company to emerge strongly from the COVID-19 lockdown and resume its growth strategy when the situation allows.
Until the COVID-19 restrictions required their closure, Loungers operated 167 café-bar-restaurants across England and Wales under the Lounge and Cosy Club brands. The company, advised by GCA, successfully completed its IPO in April 2019 with a clear organic growth strategy driven by the targeted roll-out of 25 new Lounge and Cosy Club sites annually and an ongoing focus on operational efficiency to drive further sales and margin improvements across the business. Loungers has consistently outperformed the wider UK hospitality sector over the past three years.
The lockdown in the UK has forced Loungers to temporarily close its sites, suspend its roll-out and materially reduce its cost base and cash outflow. The company has had to raise the additional capital, totaling GBP 23.3M (~$28.7M), to cover its costs during lockdown and to position it to resume its roll-out and growth strategy once the lockdown eases and its sites can reopen.
GCA has been retained as Loungers’ exclusive financial and nominated adviser since its IPO on AIM, the London Stock Exchange’s international market for growing companies.