Losses grow at Nightcap as bar owner says difficult trading conditions have continued

Hospitality firm Nightcap admitted trading has remained challenging as it reported first-half losses doubled.

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

It said it was anticipating a ‘gradual recovery’ to begin later in 2024 as inflation, interest rates and energy costs are set to decline.

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

Despite achieving record sales over the critical festive season, the company’s total like-for-like sales fell by 10 per cent amid the aforementioned economic pressures.

However, total revenue skyrocketed by about two-thirds to £7.4million thanks to the takeover of cocktail bar chain Dirty Martini and acquisition of bar operator The Piano Works.

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

Nightcap told investors on 20 February that sales had been ‘far softer’ than predicted since the year started.

It partly blamed the performance on railway strikes, huge increases in business rates and consumer cost-of-living pressures, which are affecting the UK hospitality sector.

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

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

Willingham remarked: ‘With a rapidly changing landscape away from nightclubs and sticky dancefloors to late night party bars which are safer, more flexible and more inclusive environments, I believe that no other bar group is as well positioned to take advantage than Nightcap.’

Since its founding at the height of the Covid-19 pandemic, Nightcap has grown through acquisitions and by capitalising on the depressed commercial property market to open bars on more commercially favourable terms.

Its takeovers have also included Latin American-inspired Barrio Familia and the Adventure Bar Group.

Over the medium term, Willingham wants to double the size of Nightcap’s estate from its current 47 venues to more than 100.

She added: ‘I believe hospitality has gone through the worst of this downturn with many economic indicators showing a likely recovery later on this year.’ 

Nightcap shares were flat at 4.2p on early Monday afternoon, 58 per cent below their 10p per share IPO price in January 2021.