BRITAIN`S biggest nightclub group Luminar has this morning announced it’s dropping 26 loss-making properties.
The non-core units are moving to Cavendish Bars Limited, collectively they made pre-tax losses of £1.5 million last year. Cavendish will purchase five different companies in the deal for just £1 each.
The disposal will save Luminar £2.1 million a year in rent, and enhance operating costs by £1.5 million. But the long term savings come with a loss of £9.9 million, of which £6.6 million was cah, to their income statement, according to analysts Panmure Gordon.
Panmure’s Douglas Jack said: “This earnings enhancing deal reduces the likelihood of any leasehold sites reverting to Luminar, confirming it as a clean, freehold-backed, differentiated operator.”
The deal leaves Luminar with 78 nightclubs, and a further 30 in the development pipeline,12 of which are currently trading, according to the M&C Report.
In a statement, Stephen Thomas, Luminar’s chief executive, said: “The disposal completes the strategy of streamlining the group’s activities. It releases the group from liability for those units going forward and from the cost of having them on our books.
“With a clear strategy we have built a strong business that is positioned well in its market place and will continue to generate significant sums of cash. We remain focused on further developing a business that delivers excellent returns for shareholders.”
The liabilities for leasehold sites were sold to CanDu and 3D Entertainment, which will cross over to Cavendish.