Shares in late night bars operator Nightcap (NGHT:AIM) leapt 11.5% higher to 21p after the company said full-year results for 2022 will be significantly ahead of expectations.
The company said for the first 13 weeks of the 2022 financial year to 26 September it generated revenues of £7.6 million which was 68% ahead of the same period in 2019.
Consensus expectations for full year revenues sit at £19 million which will be comfortably beaten if the company can replicate last quarter’s performance for the rest of the year, implying full-year revenues around £30 million.
PENT-UP DEMAND
The firm said pent-up demand and disposable income amassed during lockdown had resulted in ‘significant demand for experiential socialising across all the group’s cocktail bars, inside and outside of London.’
The London Cocktail Club generated 55% higher net sales compared with pre-pandemic levels while the Adventure Bar Group generated 75% higher revenues.
Chief executive Sarah Willingham commented: ‘Nightcap was built during the Covid-19 global pandemic to acquire and expand leading brands in the drinks-led bar sector and whilst the macro-economic climate remains uncertain, we believe that this uncertainty is core to our opportunity.’
RAPID ROLL-OUT
The company will open three new sites in November with a further 23 in legal negotiations or under offer and the board said it is ‘confident’ in the strength of the bar concepts and management’s ability to execute its ‘rapid expansion’ across the UK.
Nightcap has an experienced management team and clearly the bounce-back in activity has vindicated the company’s strategy, but as always in hospitality success rests on differentiation of the offering and solid execution.
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