Losses mount at Nightcap as bar owner says tough trading conditions continue

Hotel company Nightcap admitted trading remained difficult as it reported losses doubled in the first half.

The cocktail bar operator, founded by ex-Dragons’ Den star Sarah Willingham, said it expected trading conditions to remain subdued for the remainder of the financial year.

He said he anticipated a “gradual recovery” expected to begin later in 2024, as inflation, interest rates and energy costs are expected to fall.

The London-based group’s forecasts come alongside results showing pre-tax losses doubled year-on-year to £1.8 million in the six months to December.

Despite record sales during the crucial holiday season, the company’s total like-for-like sales fell 10 percent due to the aforementioned economic pressures.

However, total turnover rose by around two thirds to £7.4m thanks to the takeover of cocktail bar chain Dirty Martini and the acquisition of bar operator The Piano Works .

Nightcap operates bar chains including The Cocktail Club, Dirty Martini and Tonight Josephine.

Nightcap told investors on Feb. 20 that sales had been “much weaker” than expected year-to-date.

He partly blamed the results on railway strikes, huge business rate increases and cost of living pressures on consumers, which are affecting the UK’s hospitality sector.

The latter group runs a Victorian-listed warehouse in Farringdon and a residence at Nightcap’s Barrio Covent Garden site in London’s West End.

He hopes to spread the concept of The Piano Works, a combination of live music with food and drink, to other venues across the country.

Willingham remarked: “With a rapidly changing landscape, moving from nightclubs and sticky dance floors to party bars that are safer, more flexible and more inclusive environments, I believe no other group of bars is as well placed to take advantage of this as Nightcap.

Since its inception at the height of the Covid-19 pandemic, Nightcap has grown through acquisitions and capitalizing on the depressed commercial real estate market to open bars on more commercially favorable terms.

Its takeovers also include the Latin American-inspired Barrio Familia and the Adventure Bar group.

In the medium term, Willingham wants to double the size of the Nightcap park, from the current 47 sites to more than 100.

She added: “I think the hotel industry has weathered the worst of this recession, with many economic indicators showing a likely recovery later this year.”

Nightcap shares were flat at 4.2 pence on Monday afternoon, 58 percent below their IPO price of 10 pence per share in January 2021.