Perfect storm hits Revolution numbers

Revolution

Profits at bar operator Revolution have been hit by transport strikes, a downturn in consumer confidence as a result of the cost-of- living crisis, record hot weather, as well as cost inflation. 

However, revenues remained steady, especially following the acquisition of Peach Pub and its subsidiaries, in order to diversify the earnings away from a late-night and city centre focus. 

Sales for the 26-week period, July to December 2022 were £76.0 million 2.6% higher than the previous year reflecting a combination of pent-up demand. 

Statutory losses before tax for the year  were £0.1m, compared to profit before tax of £4.3 million in the first part of the year. 

Rob Pitcher, Chief Executive Officer, said: “We have faced well documented macroeconomic challenges which impacted profitability in the half year. The team have done everything they can to mitigate the cost headwinds and other factors outside of our control, and I am immensely proud of our people for delivering an amazing Christmas to our Corporate guests, delivering an all-time record of pre-booked sales for the Group. Walk-in custom was hampered by industrial action, reduced consumer confidence and the hot summer, and we look forward to increased guest confidence in the coming months as energy prices continue to fall from their previous peak and inflation abates.

“We were delighted to announce the acquisition of Peach Pubs in October 2022 which has diversified our offering and guest base. We have continued to see pleasing performance, delivering excellent Christmas trading. We continue to develop synergies between the businesses, and identify new and exciting opportunities.

“Management continues their focus on navigating the current macroeconomic situation, developing our business, and putting in place further building blocks for future growth. The Board remains confident that the business is on track to achieve market expectations for FY23, and we anticipate some sales recovery in 2024.”

Pitcher added: “The war in Ukraine has driven utility costs up and fuelled the cost-of-living crisis, which is very much in the consumer psyche. The rise in food and utilities inflation has seen a huge impact on consumer spending. Our guest base is not immune to this, albeit employment levels have remained high, and recent positive news of energy prices starting to fall is hoped to result in increased guest confidence. January also saw foodservice inflation fall for the first time since September 2021.

“Industrial action has been damaging trade since June 2022, with train strikes particularly impactful due to our locations being predominantly in city centres. The strikes affect the days either side of the planned strike date, with people not wanting to get stranded. Unions planned these strikes to achieve maximum disruption, with our busiest trading week of the year, in mid-December, targeted with multiple strike days. Strikes were also targeted at the end of the month focussing on the weekends when most people are being paid, being the busiest weekends for retail and hospitality sales. This has had a material impact on our ability to trade to our full potential.” 

The Group had net debt of £23.1 million as at 6 March 2023, made up of £27.0 million drawn down revolving credit facility and £3.9 million cash, with £6.9 million headroom available on the facilities.

 

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