Entrepreneur Luke Johnson to the rescue at Revolution Bars
Bars and gastro pub business Revolution Bars is pursuing a twin track rescue and restructuring deal with £3m backing from entrepreneur Luke Johnson and up to £10.5m from other existing shareholders and investors.
The proposed fundraising will seek to raise up to £10.5 million via a Firm Placing and Subscription and up to approximately £2.0 million via the Placing and Open Offer.
Cornerstone investments of £9.5 million have been secured and include £3m from Luke Johnson, £3m from the Robus Recovery Fund II and £3.5 million from three key existing shareholders.
The stock market listed group which owns the Revolution, Revolución de Cuba and Peach Pubs brands is proposing that it raises £10.5m – of which £2m will come from the issuing of new shares.
The group has also triggered a formal sale process which it says is necessary due to “liquidity pressures from Q1 FY25 onwards” in a statement released last night (10 April 2024), meaning one or more of its brands could be sold off to raise cash to keep the rest of the business going.
The company has also released its unaudited interim results for the 26 weeks to the end of 30 December 2023, and requested that trading in its shares on AIM be restored.
Revolution made a profit before tax of £3.1m, after an exceptional gain on disposal of £3.9m relating to the exit from certain leasehold properties, and enjoyed what it described as “the best festive period since 2019”. Sales for the 26-week period were £82.3 million.
But the Ashton-under-Lyne headquartered group also noted that it had faced “an ongoing period of softer trade post-Christmas, coupled with significant cost pressures” which meant the restructuring plan would provide working capital by raising additional equity capital from new and existing investors.
Rob Pitcher, Chief Executive Officer, said: “The first half of FY24 has seen continued challenges with the cost-of-living crisis disproportionately impacting particularly the discretionary expenditure of our young Revolution brand guests. Revolución de Cuba and Peach have been less impacted as the guest profile is more affluent, and both brands enjoyed very strong festive trading, and Revolución de Cuba, in particular, has shown excellent trading when compared against the wider Bars market.”
In January Revolution closed bars in Beaconsfield, Derby, Reading, St Peters Liverpool and Wilmslow, Revolución de Cuba bars in Sheffield and Southampton and the Playhouse in Newcastle-Under-Lyme.
Entrepreneur and investor Luke Johnson is the former owner of Pizza Express, and currently the owner of Gail’s Bakery. He is also an investor in Kelso, the activist investor in THG.
A former chairman of Channel 4 TV, he has been involved as a director/owner of various quoted companies in retailing, pubs and bars, parcel delivery and maritime commerce, including Whittard of Chelsea, My Kinda Town, Nightfreight, Topps Tiles and American Port Services.
He was chairman/part-owner of Draft House, the craft pub chain from 2011. It was successfully sold to Brewdog in 2018.
He was also chairman and largest shareholder in Patisserie Holdings PLC, which went into administration following a major fraud in 2018.
FTI are leading the restructuring process and the placing will be conducted by Cavendish through an “accelerated book building process”.
