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Revolution Bars suspends trading
Revolution Bars Group, which operates 80 hospitality venues across the UK, has suspended trading of its shares on AIM after it failed to publish its results.
The group, which currently operates the Revolution and Revolución de Cuba bars, as well as Peach Pubs (which it acquired in 2022), announced that it would be joining AIM, a sub-market of the London Stock Exchange, in 2020 during the Covid-19 pandemic.
However, despite surviving the lockdowns, another factor has been partly blamed for the group’s declining fortunes – Generation Z doesn’t drink enough.
In its H1 Update, issued on 24 January, group CEO Rob Pitcher said: “Revolution’s younger guests are however still feeling the disproportionate effect of the cost-of-living crisis. Looking forward, both business rates and national living wage will increase materially in April 2024 and therefore we have had to take the view that, with inflation remaining high, the recovery for the Revolution business, our largest brand, will take longer than we had previously forecast.”
“Net debt at 23 January 2024 is £20.3m, well within our facility with NatWest,” Pitcher continued, “however we will significantly reduce our capex expenditure to reflect this lower EBITDA [earnings before interest, taxes, depreciation, and amortisation] with all refurbishments deferred until we see trading improve.”
This predicament comes despite the group’s strongest festive trading period since 2019, with like-for-like sales for 4 to 31 December up 9% on 2022.
According to reports from Sky News last week, the group is considering closing 20 of its worst-performing bars and is attempting to raise £10 million, substantially more than the almost £7m it is valued at.
A statement issued by Revolution Bars Group on 2 April said that the company was “unable to publish its interim results” by 30 March, thus breaking Rule 18 of the AIM Rules for Companies, resulting in the trading suspension taking effect that morning. The statement explained that “suspension from trading will be lifted with the publication of the interim results in due course”.
“The company continues to evaluate all the options available to it, including engaging with key stakeholders and potential investors with respect to a fundraising,” the statement explained.
Revolution isn’t the only hospitality group facing difficulties. It has been rumoured that Whitbread, which oversees the Brewers Fayre and Beefeater brands, was intending to offload a number of its underperforming restaurants. Wine bar chain Vagabond is also at a crossroads, with it speculated that retailer Majestic is preparing to buy it.
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