Revolution Bars Group, grew like-for-like sales by 1.5% in the year to 1 July.
Revenue grew from £119.5m in 2016 to £130.5m, while adjusted EBITDA grew from £13m to £15.1m. Adjusted profit before tax was £9.3m, up from £7.4m last year.
Like-for-like sales in the first quarter of the current period were up 0.3%. The group said July and August returned to a more normal trading pattern following the terrorist incident in Manchester in May, while September trading had been disappointing, in line with the rest of the sector.
The update confirmed that Revolution shareholders will vote on Stonegate’s cash offer for the company on 17 October and also reiterated that an approach by Deltic was dismissed by the board “due to significant concerns regarding both value and deliverability”.
Six new sites opened during the period - four Revolución de Cubas during the first half in Harrogate, Aberdeen, Reading and Glasgow, and two Revolutions towards the end of the second half in Southend and Torquay. In addition, major refurbishment projects were undertaken during the last quarter at the Revolutions in Blackpool and Cardiff. The group said that based on trading levels achieved to date, the new bars are on track to deliver excellent returns on capital, consistent with the five new openings in the prior period, which achieved returns on capital of 32% in their first full financial year.
Six openings are planned for the new financial period; three Revolutions and three Revolución de Cubas. Belfast Revolución de Cuba opened in July and new Revolutions are planned to open before Christmas in Inverness, Solihull and Putney. Two further Revolución de Cubas are expected to open in the second half.
The company said its future pipeline was “considerable” and expected to be able to open at six sites per annum for several years to come.
Revolution said its current finance team had strengthened and upgraded the systems and processes of the finance function. Additionally, a detailed review has been undertaken of the application of the group’s accounting policies and practices. This review has resulted in a restatement of the prior period’s results.
On the outlook chairman Keith Edelman said: “Given the recommended cash offer for the business from Stonegate, it is likely that the ownership of the Company will change in the next few weeks. However, such an event is not certain and, whatever the outcome of the potential transactions, the business is well placed to succeed.
“We have two strong brands that are trading well in a challenging market. In the first quarter of the new period, like-for-like sales are +0.3% and our first new opening this year in Belfast has achieved the best initial sales levels of all twelve openings in the last two years averaging £80k per full week since opening.
“The sector is facing some well-publicised and significant cost headwinds: minimum wage and living wage rate increases, the introduction of the apprenticeship levy and substantial increases in general rates following the 2017 revaluation. Staffing and recruitment may now also come under pressure due to Brexit-related issues. However, now that we have dealt with the historical financial reporting issues, and have improved reporting and controls in place, we are better placed to be able to rise to these challenges.
“The scale and strength of our new venue pipeline and the excellent returns achieved by new venues opened in the last two years means that the business can be confident about achieving its growth targets going forward. The clear and focused strategy, the quality of our sites and proposition, and the talent within the Group, leaves the business well placed for further growth in 2018.”
