- Profit warning as travel disruptions hit confidence
- Expectations rebased to bottom end of range
- Closing some sites on Mon and Tues to manage energy
Shares in premium bars and pubs group Revolution Bars (RBG:AIM) fell 33% to 4.9p on Tuesday after warning full year profit would miss market expectations.
Despite record Christmas corporate pre-booked party revenue up 10.3% on the same period in 2019, the firm said the reliability of trains amid industrial action had impacted guests’ confidence to travel as well as reducing ‘walk-in’ revenues.
Consequently, for the five weeks to 31 December like-for-like sales fell 9% compared with the last comparable uninterrupted period in 2019. Against the easier comparable period of 2021, like-for-like sales increased by 17.3%.
Overall group sales for the first half to 31 December were 9.4% lower on a like-for-like basis, reflecting the hot summer, winter travel disruptions and the cost-of-living crisis.
Chief executive Rob Pitcher commented: ‘The continued train strikes had a material impact on whether guests attended their office Christmas parties, how long they stayed and whether they met up with friends on a separate occasion.
‘Given the current economic environment, the coming months are going to be challenging and uncertain, not only for us, but for many businesses. We are not immune to this.’
WHAT IS THE FINANCIAL IMPACT?
The weaker-than-expected performance means the board now expects full year EBITDA (earnings before interest, tax, depreciation, and amortisation) including rental costs to 2 July 2023 to be at the bottom end of market expectations of £6.7 million to £10.5 million.
The group is taking mitigating actions which include closing a number of Revolution and Revolucion de Cuba sites on Mondays and Tuesdays during January and February to reduce energy consumption.
Net debt at the end of the period was £18.5 million. The group intends to publish its half year results on 7 March 2023.
