Revolution Bars warns weather, lack of CEO knocked earnings

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British bar chain Revolution Bars has warned its full-year profits will miss analysts’ expectations, blaming its poor trading on weather conditions, its prolonged lack of a chief executive and the “unsettling effect” of dealing with two seperate takeover offers last year. 

Revolution, whose outlets are are mainly in prime city centre locations and serve food alongside premium-priced cocktails, said it had experienced “challenging and volatile” trading conditions in recent weeks. 

This meant its full-year underlying earnings would likely come in at £15.1m, the group said, which is in line with last year but falls short of forecasts. 

Revolution’s board rebuffed a merger proposal from nightclub operator Deltic Group last October. It then recommended a competing, £102m takeover offer from Slug & Lettuce owner Stonegate Pub Company, which its shareholders rejected. Former chief executive Mark McQuatar stepped down immediately afterwards. His replacement, Rob Pitcher, joins the business on June 25. 

The group’s sales fell 1.7 per cent on a like for like basis in the six months to June 9, compared to the same time last year. Revolution blamed this on “adverse, wintery weather conditions in March combined with the unusually hot weather throughout May and early June,” which it said had “curtailed typical late-night week-end trading.” 

It also admitted that “disruption caused by operational management change prompted by the unsettling effect of last year’s takeover activity,” as well as “the prolonged absence of a CEO,” had played a part in “impacting the sales trend”. 

The group’s sales have also softened against a background of casual dining restaurants doing badly in an oversupplied British market. 

Jamie’s Italian, a casual dining business fronted by Jamie Oliver, the chef, has signed a voluntary agreement with creditors that involves closing less profitable sites, while the Prezzo pizza brand and J Byron Hamburgers have made similar moves.

Revolution has hired a new food director, Simon Dobson, to try and reignite its food sales and profits and has promised to roll out more innovative menus. 

It has also promised to make its marketing expenditure more effective and said it was seeing “real operational improvements” from using new labour scheduling software. 

“The Board remains confident in the future prospects of the business,” Revolution said on Thursday

2018-06-14 06:42:41

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