Loungers raises over £8m to secure position during pandemic

Operator of 146 cafee/bar/restaurants across England and Wales, Loungers has raised over £8m in a premium share placing to protect its business during the coronavirus crisis.

The company, which operates under the Lounge and Cosy Club brands, said it has raised the funds through the placing of 9.25 million new shares at a price of 90p each, a 16% premium to its closing price on Wednesday.

Loungers said the funds raised will be used to “provide sufficient liquidity in the event that [coronavirus] materially impacts the company's sales into 2021”, as well as to allow it to continue opening new sites once the pandemic came to an end.

Combined with its existing cash and loan facilities, the group said it will have funds of around £31m, which it estimated was enough to maintain the business for around 46 weeks of closure.

Analysts at the company’s house broker, Peel Hunt said they believed Loungers “should emerge from the [coronavirus] crisis in a position to resume its leadership…of the licensed retail sector”.

The first Lounge was founded in Bristol in 2002 by three friends who wanted to create a neighbourhood cafe-bar that they would want to go to. That focus on hospitality, comfort and familiarity remains at the core of the group.