Revolution counts cost of ownership tussle and onerous leases

The tussle for ownership of Revolution Bars Group, which runs 72 premium bars across the UK under the Revolution and Revolución de Cuba brands, and onerous property leases have plunged the company into a £3.7m operating loss.

Adjusted like-for-like sales remained stable for the six months to December 30, which exclude the lucrative New Year’s Eve celebrations, at £73.8m with growth of 1.9%.

But almost £9.6m of exceptional costs left the Asthon-under-Lyne, Greater Manchester-based company, with the operating deficit.

Professional fees incurred during the battle between the Stonegate pub company and Deltic amounted to more than £2.1m, while changes to Revolution’s executive team cost the company £705,000.

The company also paid out £169,000 of fees relating to accounting restatements and £860,000 was down to impairment of property, plant and equipment.

Its biggest liability, however, proved to be £5.6m paid out on onerous leases for its traded sites.

Meanwhile, four new sites were opened during the period. A Revolución de Cuba was opened in Belfast in July, achieving the highest level of sales over its first 24 weeks of all venues which have opened in the last two years and the third highest of all the group’s venues in December.

Three new Revolution bars also opened just before Christmas in Solihull, Inverness and Putney with each surpassing their initial sales targets.

Currently, the group trades from 58 Revolution and 14 Revolución de Cuba venues.

With a further Revolución de Cuba opening towards the end of this month in Birmingham and another Revolución de Cuba expected to open in Newcastle-upon-Tyne just before the end of the financial year, the company’sopening programme is on track to meet the planned six new sites in the financial year, taking the estate footprint to 74 venues.

Executive chairman Keith Edelman said: “I am delighted with our sales performance in the second quarter and over the Christmas period which shows the clear underlying strength of our business and continues to demonstrate the appeal and potential of our brands.

“New openings are performing particularly strongly, and site refurbishments are delivering healthy returns, meaning the group can pursue its strategy of profitable growth and drive like-for-like sales in its core estate.”