H1 Update

Revolution Bars Group

24 January 2024

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

Revolution Bars Group Plc

("Revolution" or the "Group") 

H1 update

Revolution Bars Group plc, a leading operator of 58 premium bars and 22 beautiful gastro pubs, trading mainly under the Revolution, Revolución de Cuba and Peach Pubs brands, today provides further detail on Christmas and H1 trading and outturn for FY24.

H1 and festive trading

As previously reported, Group like-for-like sales for the four weeks from 4 to 31 December were +9.0%, the best festive period since 2019. Group like-for-like sales for H1, including New Year's Eve, continued to demonstrate an improving trend at -2.8% for the half.

Peach

Following opening our 22^nd Peach pub in November 2023, the brand delivered  its  best ever Christmas period Christmas trading period with three consecutive record weeks during December, achieving  weekly sales of over £1m for the first time.  LFLs vs FY23 continued to be strong over the Festive period driven by good Christmas party bookings.  Integration of the Peach acquisition continues to go well with synergies of £1.5m on track to be fully delivered by FY25.

Revolución de Cuba

As Corporate guests returned to Christmas parties in full this year, for the first time in four years, pre-booked party revenue grew significantly by 26% versus 2022 and our refreshed brand proposition delighted party goers who recorded excellent guest feedback scores.

As a result, significant double digit LFL growth was achieved during the 4 weeks to 31 December,  with the brand outperforming the Bars Market again which it has done for the each of the past 13 months.

Founders and Co.

Founders and Co., our artisanal market hall and bar in Swansea continues to go from strength to strength delivering double digit LFL growth every month in FY24 to date as it continues to build on its status as a community hub for likeminded guests. 

This concept is now well positioned for growth and is an exciting prospect for the Group.

Revolution

Christmas delivered a welcome boost for the Revolution brand and we saw our corporate guests returning to enjoy themselves and help to deliver positive LFL growth with solid pre-booked sales growth for the festive season of 11%.  Nonetheless, it remains clear that the younger guest to which this brand appeals continues to experience, disproportionately, the cost of living crisis pressurising their discretionary income, causing the Revolution brand to underperform.

FY 24 Outturn

Despite strong Christmas trading as reported above, and the improving LFL trend throughout H1, January trade has started softly as guests recover from the expense of Christmas. With inflation still high, we cannot assume that the 14.8% increase in the NMW for 18 to 20 year olds plus the 9.8% increase for those over 21 from April (total blended 10.8%) flows through to increased discretionary spend for our Revolution guests in particular. It is however a material increase in cost in each of our businesses. 

This, together with the recently announced continuation of Aslef train strikes, means that the Board has had to reconsider previous assumptions of LFL growth in the second half of the financial year.  Whilst the business continues to manage costs tightly, the significantly above inflation increases in both business rates and payroll costs set by the Government are a significant additional burden and barrier to growth.  As a result, the Board now expects IAS 17 EBITDA to be c£3-3.5m.

Net debt at 23 January 2024 is £20.3m, well within our facility with NatWest, however we will significantly reduce our capex expenditure to reflect this lower EBITDA with all refurbishments deferred until we see trading improve.

The Board expects to announce interim results for the 26 weeks ending 30 December at the end of March 2024.                                                                                                                                             

Rob Pitcher, CEO of Revolution Bars Group, said:

"The 2023 festive trading period is our best for four years. I have been delighted with the strong growth in Peach,  Revolución de Cuba and Founders over the festive period.  It was pleasing to see our Revolution guests experience their first uninterrupted Christmas since 2019, driving growth for the brand.

Revolution's younger guests are however still feeling the disproportionate effect of the cost-of-living crisis. Looking forward, both business rates and national living wage will increase materially in April 2024 and therefore we have had to take the view that, with inflation remaining high, the recovery for the Revolution business, our largest brand, will take longer than we had previously forecast.

I'd like to thank our teams for all their hard work in making the Christmas period such a success and look forward to the point when the cost of living abates sufficiently for our Revolution guests' disposable income in particular to improve. "

24 January 2024

Enquiries:

Revolution Bars Group plc Rob Pitcher, CEO Danielle Davies, CFO                                   Tel: [phone] Cavendish Capital Markets Limited (NOMAD & Broker) Matt Goode / Simon Hicks / Teddy Whiley (Corporate Finance) Tim Redfern (Corporate Broking)              Tel: [phone] Instinctif (Financial PR) Matt Smallwood / Justine Warren            Tel: [phone] / ​020 7457 2010

 

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