Revolution Bars Group has boosted revenues by £11.8m to £152.6m, as the Peach Pubs acquisition pays off in a challenging trading environment.
However, “continuous and varied” external headwinds, particularly impacting bars, combined to deliver -8.7% like-for-like sales in the full year FY23.
Reporting preliminary results for the 52 weeks ended 1 July 2023, Revolution said gastropub business Peach had performed well since it was acquired in October 2022, with “significant opportunity for expansion in the future”.
On a macroeconomic basis, late-night hospitality in particular is facing very challenging times, impacted by the cost-of-living crisis and working from home trend - especially on Fridays, historically Revolution’s second largest night.
The group said initiatives to drive sales and manage costs are making progress.
The group made a statutory loss before tax of £22.2m (2022: PBT £2.1m), which was driven ny non-cash exceptional impairment charges.
Adjusted EBITDA (IAS 17 Alternative Performance Measures) was £6.6m.
Peach Pubs performed better than the bars, delivering +14.1% LFL sales in FY23 since acquisition, compared to 2019.
The business delivers “much needed diversification” of sales and guests, and gives customers high-quality outdoor spaces to enjoy when the sun is shining.
The first new Peach pub opened in October 2023, with the aquisition of The Three Horshores in Letchmore Heath, Radlett, with further significant opportunities to expand as capital becomes available.
Revolución de Cuba brand has performed well versus other bar brands under current conditions, with strong corporate bookings and hopes for a return to a normal Christmas trading period.
Revolution has been most impacted by the cost-of-living crisis, with guests seeing a direct impact on their disposable income.
New market hall and competitive socialising concepts Founders & Co. and Playhouse are maturing, with former in particular experiencing a very strong performance, offering an opportunity to expand when funding allows.
LFL pre-booked party revenue for Christmas FY24 of +17.7% versus FY23 gives evidence of a potentially normal festive season, with a new CRM system, recently used in its first major campaign as students returned, proving to be a “significant asset” driving sales.
FY24 has started with a continuation of the challenges, with year-to-date LFLs at -5.5% compared to FY23.
In the last three weeks this has improved to -3.5%, as a result of the return of students and corporates in bars and continued strong performance in pubs.
Rob Pitcher, chief executive, said: “Peach Pubs has seen continued strong trading since acquisition, especially during periods of good weather. We are very excited to open our first new Peach Pub since the acquisition and see this brand as having significant expansion opportunities across the United Kingdom when we have the necessary available funds.
“The group now offers a well-rounded, diversified offering through our bars and pubs to navigate the ongoing challenges our guests face with the cost-of-living crisis. The macroeconomic challenges facing the industry impact on both our guests’ available spending as well as profitability of the business. This is a key area of focus for our management teams, and we are pleased to see the impact of our sales-driving initiatives coming to fruition, alongside active cost management.
“With pre-booked revenues at record-highs for the upcoming festive period, we look forward to our bars and pubs hosting our fabulous corporate guests, as well as anticipating improved walk-in custom following the challenges of industrial action on the railways in recent years.”
Picher joined UK Hospitality in calling for the crucial festive season to be protected and for an urgent resolution to the ongoing rail dispute.
“Not only do the strikes have a significant impact on sales and profitability, but most importantly they affect our colleagues’ earning potential through lost shifts and tips which the teams rely on to see them through the quieter trading months of January and February.
“I am immensely proud of the resilience and positive attitude our colleagues continue to show and look forward to entering our busiest trading period of the year, which we hope to be the first normal Christmas since 2019.”
