Manchester bar group warns of tough 12 months ahead

Revolution Bars Group

Manchester based Revolution Bars is warning of a tough 12 months ahead due to the uncertain economic and political situation.

As a result, the firm is predicting its EBITDA for the full year to be approximately £12m – a fall of £3m.

Revolution Bars operates 79 venues across the UK under the Revolution and Revolucion de Cuba brands.

In October Revolution Bars  announced it was ditching plans to buy nightclub chain Deltic.

The firm said in a statement to the Stock Exchange it would not be in the shareholders’ best interests to press ahead with the deal.

The firm has issued a trading update for the 26 weeks to 29 December 2018 which covers the important Christmas and New Year trading period.

Total revenue for the 26 weeks ended 29 December 2018 was £78.5m, an increase of 6.4%.

Five new venues opened during this period: Revolution Mitchell Street in Glasgow and Revolucion de Cuba Southampton in August, Revolucion de Cuba Bristol in October, and Revolucion de Cuba Huddersfield and Revolution Durham in November.

Overall, the new venues have traded ahead of expectations.

Like-for-like sales in the important four week trading period leading up to and including New Year’s Eve were 2.6% higher than last year and 8.7% higher over two years.

This was the sixth consecutive year of growth over the festive period.

During this four-week period, pre-booked party revenue was up 11.7% on a like-for-like basis and average weekly sales per venue were above £60,000 with 22 venues setting new total sales records.

As expected, and as reported by many high street retailers, Christmas trading came late with like-for-like sales in the last two weeks of the financial period up 8.1%.

Like-for-like sales performance for the 26 weeks ended 29 December 2018 was 4.0% below last year with the first quarter at -5.0%.

Revolucion de Cuba has continued to grow like-for-like sales during the 26 week period with a particularly strong performance over the Christmas period.

The Revolution brand has also achieved growth over the four week trading period to New Year’s Eve, it has consistently traded below last year over the 26 week period.

The board says it is progressing with its work on revitalising the Revolution brand proposition and continues to implement the required changes to the customer offer with further initiatives being launched in the coming weeks.

The board expects adjusted EBITDA for 2019 to be approximately £2m lower than last year due to the like-for-like sales decline and increased operating costs.

Chief executive Rob Pitcher said: “The uplift in like-for-like sales performance over the festive period gives us momentum going into the second half and

“I’m pleased with the progress being made in refreshing the Revolution brand proposition.

“However, given the uncertain economic and political outlook we are adopting a more cautious outlook on trading in the coming months.”

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