Exceptional costs of £9.6m dragged premium bar operator Revolution Bars (RBG:AIM) into a £3.7m operating loss in the 26 weeks to 30 December 2017.
This is a significant drop from an operating profit of £5.1m in the year to 30 June 2017, causing the shares to slip 5.2% to 161.1p.
Costs included M&A fees from a rejected takeover offer by Stonegate Pub Company and a proposed merger with Deltic where a cash offer was teased, but never materialised.
In the run-up to the end of 2017, like-for-like sales growth of 0.4% was subdued, but trading was stronger on New Year’s Eve, which lies outside of the trading period.
By extending the period by one week to include New Year’s Eve, like-for-like sales jumped 1.9%.
‘ATROCIOUS’ WEATHER KEEPS CUSTOMERS AWAY
The positive momentum could not be maintained with sales falling 2% in the eight weeks to 24 February 2018 as Revolution Bars entered a quiet trading period also impacted by bad weather.
‘Current weather conditions across the UK are atrocious and trading has been understandably decimated,’ comments Canaccord Genuity analyst Nigel Parson.
He says trading is not expected to improve until the weather picks up, arguing the bar operator needs good weather over the bank holidays to ‘recapture lost ground’.
Parson has reduced his 2018 earnings per share forecasts by 3.6% to 12.9p.
Numis analyst Tim Barrett pencilled in 1% like-for-like sales growth for 2018, down from 1.5% and reduced EBITDA by 2.5% to £16m.
He is upbeat about Revolution Bars’ outlook, arguing the roll-out of new sites will drive value and is confident the company is ‘executing well’.
