Revolution reveals interim results and restructuring plan

A UK operator of 58 premium bars and 22 gastro pubs has published its interim results for the 26 weeks ending 30 December 2023, also announcing a proposed restructuring plan and the launch of a formal sale process.

Revolution Bars Group, operator of the Revolution, Revolución de Cuba and Peach Pubs brands, traded positively throughout the festive season. The business achieved sales growth year-on-year of 8.3% and a pre-tax profit of £3.1m, following an exceptional gain on disposal of £3.9m relating to the exit from certain leasehold properties. 

Like-for-like sales from 4 to 31 December were up 9%, marking the group's most successful festive period since 2019. 

'A challenging trading environment'

Despite strong sales over Christmas, the macroeconomic trading environment remains difficult to navigate, with the recent statutory blended 11% increase in the national living wage adding further cost pressure. Consequently, the business announced the closure of eight sites in January to reduce the impact of expected future losses. The group's net bank debt stands at £21.8m as of 10 April 2024. 

Given the significant cost pressures, the board has concluded that a restructuring would be in the company's best interest. To fund the potential plans and provide additional working capital, Revolution must raise additional equity capital from new and existing investors via an equity raise. 

As such, the company has implemented a firm placing, subscription and placing to raise gross proceeds of approximately £10.5m. The fundraising is conditional on the restructuring plan being sanctioned by the court.

Without the additional finances, the board anticipates that the group will face liquidity pressures from Q1 FY25 onwards. 

As an alternative to the potential restructuring, the business has also launched the formal sale process, exploring whether an acquisition will provide a more beneficial outcome for stakeholders. Additionally, the company is exploring whether the sale of one or more subsidiaries will offer brighter prospects. 

Rob Pitcher, chief executive officer of the group, comments: "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.

"I would like to take this opportunity to thank our brilliant teams for always bringing a smile to our guests, and their continued resilience and hard work in the face of these challenging times. They have delivered another brilliant Christmas, continue to delight and thrill our guests, and I appreciate their continued professionalism."

You may also be interested in…