Bosses at Revolution take 50 per cent pay cut as part of series of cost cutting measures

The bosses at Revolution group have taken a 50 per cent pay cut as part of a series of measures to ensure the firm’ survival.

The firm, which has its headquarters in Manchester has also put 2,775 staff – 98% of the workforce – on the government’s furlough scheme.

Revolution Bars Group operates 74 bars, trading under the Revolution and Revolución de Cuba brands.

The company was already looking at its portfolio in a bid to cut costs.

The firm has also applied for the Government-backed twelve-month business rates relief and has deferred all PAYE and VAT payments from 18 March 2020 for three months.

It has also had assistance from suppliers regarding contract suspensions and extended its credit and payment terms.

It is also in negotiation with landlords regarding rent relief and all capital expenditure has been cut.

The measures have significantly reduced the group’s weekly running costs to approximately £400,000 per week and management continues to seek further cost reduction opportunities.

Costs will be kept to a minimum until the group’s bars can reopen given the ongoing uncertainty as to the length of the enforced closure period.

Revolution has also renegotiated the completion terms of the transaction to surrender five leases to its landlord Aprirose that was originally announced on 15 January 2020.

The completion payments have been reduced from £3.64m to £2.25m and deferred payment terms agreed for more than half of the reduced amount, which saved a cash outflow in March of £2.8m.

The firm’s bank Natwest has agreed to increase its overdraft facility to £30m until 31 August.

Natwest has also agreed to waive all financial covenant tests at March and June.

Chief executive Rob Pitcher said: “Prior to this crisis, we were delivering positive like-for-like sales, had significantly reduced our debt position, were generating strong capex returns, and were on track to meet our full year profit expectations.

“We welcome and are delighted with the additional support from Natwest at this difficult time. They have acted as a true partner to our business and this decisive action has enabled us to be another step closer to being well-positioned to emerge from this crisis.

“We are also very grateful to those other stakeholders, including our employees, suppliers and certain landlords who have approached this crisis in a similar manner, helping to secure the future of this great business.

“However, there is still more which needs to be done to ensure the protection of the 3.2 million jobs in our sector along with the £39 billion of direct tax receipts paid annually to the UK Government.

“Specifically, this includes more support in connection with property related costs during this enforced closure period and beyond, including support for landlords themselves and we encourage the government to take swift action in this respect.”