Turnover reached £88.3m, and the group increased profitability by 50 per cent, a very positive turnaround three years after the business was bought out of administration by a team of investors led by Peter Marks.
“We’re now seeing the benefits of two strategies: decentralising our business so that managers make the decisions that are right for their towns, and a capital investment programme following seven years of underinvestment,” Marks told BigHospitality.
The company owns 53 nightclubs around the UK and is currently focusing on refurbishing its existing estates. In FY 2014 it invested £5.3m in projects including the launch of PRYZM Bristol and PRYZM Kingston. Luminar has already renovated over a quarter of its properties and expects to invest in 15 more venues, including Guildford and Bournemouth, in 2014.
As part of its turnaround strategy, Luminar launched the UKCN app at the end of 2012, allowing customers to stay informed on events and pre-order drinks that are then delivered to their tables, removing the need to queue at the bar – a move that has helped boost advance bookings.
“Pre-bookings of booths is an improving part of our business, our new-design clubs are having more booths put in them and our sales of booths are up 61% year on year. Premiumisation is the way it’s going,” added Marks.
The late night sector has been going through tough times, with youth unemployment and rising university tuitions hitting sales, but the market is showing signs of recovery.
“It’s fair to say that in the last five years the whole town centre late night market has been, with a couple of exceptions, underinvested as well. So people are finding money tighter, they’ve got student loans, they don’t have jobs or not the jobs that they expected to get after university, and the town centres have also become a little bit boring. It’s been a challenge, but where we’re investing we are seeing good results.
“The student market is going to continue to be quite challenging but we’re definitely seeing an improvement in our Friday and Saturday trade, which is where the bulk of our profit comes from,” Marks said.
Current trading to date in FY15 is in line with expectations, with the refurbishment programme delivering returns on investment of over 40%.