Shares in bar operator Revolution Bars (RBG:AIM) have taken another hit after extremely hot (and cold) weather and the FIFA World Cup deterred revellers from enjoying a night out on the town.
The shares slip 2.2% to 122.2p and now trade approximately 40% lower than they did a year ago.
The owner of the Revolution and Revolución de Cuba brands says like-for-like sales declined 0.6% in the year to 30 June.
Last year’s drama around the failed Stonegate bid made an impact by delaying development work as several senior managers followed its chief executive officer Mark McQuater out the door.
Nightclub group Deltic was interested in merging with Revolution Bars late in 2017, but a cash offer never materialised.
Despite the impact from potential M&A action, the bar operator is in talks to acquire Deltic.
Exceptional one-off costs of £11.1m were racked up in the year to 30 June, including M&A fees and costs related to management changes, dragging Revolution Bars from an £5.5m operating profit to an operating loss of £3m.
WHAT IS BEING DONE TO DRIVE SALES?
In a bid to boost trading, Revolution Bars is implementing several initiatives by refreshing food and drink menus, as well as revamping the entertainment to encourage ‘instagrammable moments.’
The roll-out of five new opening in the six months to 31 December is also on track. Three additional sites are expected to open by the end of November to take advantage of the vital Christmas trading.
Peel Hunt analyst Douglas Jack is optimistic about the outlook, flagging that December represents a quarter of annual profits with pre-bookings already half sold out.
Jack keeps his year to June 2019 earnings forecast unchanged at £16.7m, arguing a 1% rise in like-for-like sales is required with new openings expected to drive strong sales growth in 2019 and 2020.
