Revolution Bars Group has reported like-for-like sales down 1.7% in the second half of its financial year to 9 June, amid “challenging and volatile trading conditions”.
The group said sales in recent weeks had fallen short of expectations, and as such adjusted EBITDA for the year is expected see no growth on last year’s £15.1m.
Total sales during H2 grew 7.3% but while Revolucion de Cuba remains in like-for-like sales growth, the company’s eponymous brand has suffered.
The group said wet sales had performed better than food, particularly in the Revolution estate where little food development and innovation was undertaken in 2017. This development is now underway for delivery in Q1 next year.
The board said that while it believed that the weather had been the most significant factor impacting the sales trend, disruption caused by operational management change prompted by last year’s takeover bids and the prolonged absence of a chief executive had also played their part.
For the 49 weeks to 9 June 2018, total sales are up by 9.1% and like-for-like sales are down by 0.5%
The group stressed that the new bars opening programme had been delivered to schedule and was performing in line with expectations. The board said it remained “confident in the future prospects of the Group as a result of the progress of management initiatives currently underway”. New chief executive, Rob Pitcher, joins the business on 25 June, from Mitchells & Butlers.
On the details of trading, the group said the adverse, wintery weather conditions in March combined with the unusually hot weather throughout May and early June, had curtailed typical late-night week-end trading. The sales performance in the last six weeks at sites with significant outside trading areas has performed well relative to last year, it said.
On initiatives that the board believe give confidence in the group, it said:
”1. The new bars opening programme for the current financial year has been delivered to schedule. Those 5 bars are performing to expectations;
2. As planned, we have six new sites for our next financial year including four large bars scheduled to open in the next four months;
3. Following a full review, we anticipate significantly improving the effectiveness of our marketing expenditure;
4. The roll-out of labour scheduling software across all venues has been completed in recent weeks and is starting to deliver real operational improvements;
5. Simon Dobson, the Group’s new Food director, joined the business towards the end of January to drive a step change in Food sales and profitability;
6. Pre-booked revenue continues to grow and it is anticipated that that further strong growth in this important income stream will be achieved.”
The most recent trading updates from Revolution had been showing positive signs, with H1 like-for-like sales growing 1.9%, once New Year’s Eve was taken into consideration. At that point adjusted EBITDA was up from £8.7m last year to £8.9m.
At close of trading yesterday the group’s share price sat at 157p. In October, shareholders rejected a 203p-per-share bid from Stonegate.