Pre-close Trading Update

RNS Number : 9432L

Revolution Bars Group

25 July 2017

 

Revolution Bars Group plc

Pre-close trading update

Revolution Bars Group plc ("the Group"), a leading UK operator of 68 premium bars trading under the Revolution and Revolución de Cuba brands, today provides a pre-close trading update in respect of the 52 weeks to 1 July 2017 ("the Period").

Total sales for the Period increased by +9.2% to £130.4m (2016: £119.5m*). Like-for-like sales rose by 1.5%, down from the 1.7% reported after 44 weeks.  The terrorist attacks in Manchester on 22 May and in London on 3 June impacted business during the days that followed, particularly in the north west where the Group has a significant number of venues - five in central Manchester and five in Liverpool.   Like-for-like sales growth has since strengthened, up by 2.7% over the last six weeks.

As planned, the Group opened six new bars in the Period. Revolución de Cuba bars at Harrogate, Reading, Aberdeen and Glasgow, all of which were opened in the first half, were followed by new Revolution bars in Southend (late April) and Torquay (late May).  Average weekly sales for the bars opened during the Period are ahead of the Board's expectations. The Revolution bar in Macclesfield closed in early May for a relaunch in the coming months, while a further Revolución de Cuba bar opened in Belfast at the end of last week.  The Group currently trades from 68 sites, 54 under the Revolution format and 14 under the Revolución de Cuba format.  The business continues to deliver high returns on invested capital and the Group plans to open six new bars in the new financial year, including Belfast that has just opened, split equally between the two brands.

The Directors remain confident of the current strategy, the underlying strength of the business, its brands and the strong customer proposition, which has resulted in over three years of consistent like-for-like growth.

As part of the year-end audit, the Group has reviewed its historic accounting practices relating to short life assets and supplier rebates and expects to reflect the following two changes in its financial statements. Certain short life assets will be reclassified, reducing depreciation charges by approximately £1.0m in the 2016 financial year with an offsetting impact in operating costs. Profit before tax for the 2016 financial year will be unaffected by this adjustment.  Also the treatment of supplier rebates in earlier years has been reassessed. A resulting adjustment is expected to lead either to an exceptional charge in the Period (relating to prior years) or to a reduction to profits in prior periods.  It is currently estimated that the adjustment will be no more than £1.0m at the pre-tax profit level.

The Group's full year results, which are expected to be in line with the Board's expectations, will be announced on 3 October 2017.

* References to 2016 relate to the 53 week period ended 2 July 2016.

25 July 2017

For further information:

Revolution Bars Group plc                                                       T:  0161 331 3720

Mark McQuater, CEO

Mike Foster, CFO

Instinctif Partners                                                                     T:  020 7457 2020         

Matthew Smallwood      

 

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