UPDATE 2-Luminar shares rise on trading, finances relief

(Recasts, analyst reaction, shares)

By Matthew Scuffham

LONDON, Sept 25 (Reuters) - Britain's biggest nightclub operator, Luminar Group Holdings (LMR.L), saw its shares rise sharply on Thursday as clarification of the group's financial position and better-than-feared trading pleased investors.

Shares in the group, which have lost more than two-thirds of their value over the last year, were up 5.5 percent at 203-1/2 pence, having earlier been as high as 216 pence, up 12 percent.

Luminar, which runs the Oceana, Liquid, and Lava club chains, said that trading over the summer had continued to be difficult but its performance was in line with management expectations. Like-for-like sales across its 74 clubs were down 2.4 percent in the half year to August 28.

The group, which has been the subject of market speculation in relation to its banking covenants, said it continues to be "financially strong and asset-backed".

"The group's operations are highly cash generative and Luminar will continue to finance its development through its existing strong cash flow and banking facilities," it said.

Net debt stood at 159 million pounds ($295.7 million) at the end of the period. Luminar said it has debt facilities of 180 million pounds which do not need to be renegotiated until 2012.

With a programme of refurbishing its clubs now complete, Luminar expects its net debt to fall in the second half.