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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Loungers - Roll-out target upped from 400 to 600

September 2023

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • LGRS
  • Price:
  • 187.5p
Over the month I met with Nick Collins, CEO of casual dining group, Loungers for the third time post results. The present becalmed state of the shares is at odds with the fact that the company has almost doubled the number of outlets since listing in April 2019 (from 146 to to 234), all self-financed from cash flow. It trades on an EV (market cap plus debt) to EBITDA of just 5.8x versus 13.3x shortly after its float. The free cash flow yield of 14% signals a virtual give-away for a company with net debt (ex leases) of just £6.1m and it retains £42.5m of facilities, which provides the firepower to match Collins’ upgraded expansion targets. The rout in retail has led to a swathe of empty sites with Loungers taking over pitches from ...

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