10 April 2024
Revolution Bars Group
plc (LSE: RBG)
Unaudited
Interim results for the 26 weeks ended 30
December 2023
Making the right decisions
on our portfolio to secure the future profitability of our
businesses
Revolution Bars Group plc ("the
Group"), a leading UK operator of 58 premium bars and 22 gastro
pubs, trading predominantly under the Revolution, Revolución de
Cuba and Peach Pubs brands, today announces its unaudited interim
results for the 26 weeks ended 30 December 2023. These results
should be read in conjunction with a separate announcement
regarding a Proposed Restructuring plan, Placing, Open Offer and
simultaneously the launch of a Formal Sale Process.
With the announcement of its
unaudited interim results for the 26 weeks ended 30 December 2023,
which are now available on the Company's website, the Company has
requested that trading in its ordinary shares on AIM be restored
with effect from 7.30 a.m. on 11 April 2024.
Results to 30 December 2023
|
H1 FY24
(IFRS 16)
£m
|
H1 FY23
(IFRS 16)
£m
|
H1 FY24
(IAS 17)
£m
|
H1 FY23
(IAS 17)
£m
|
Total Sales
|
82.3
|
76.0
|
82.3
|
76.0
|
Operating Profit
|
7.2
|
3.1
|
(0.7)
|
0.9
|
Adjusted1 EBITDA
|
8.9
|
9.8
|
3.2
|
5.1
|
Profit/(Loss) Before Tax
|
3.1
|
(0.1)
|
(2.1)
|
0.0
|
|
|
|
|
|
Net Bank Debt
|
(20.0)
|
(18.5)
|
(20.0)
|
(18.5)
|
Key points
With ongoing challenges to the
Hospitality sector, the Group was pleased to have traded positively
over the important festive season. The Group achieved sales growth
year-on-year of 8.3%, and a profit before tax of £3.1 million,
after an exceptional gain on disposal of £3.9 million relating to
the exit from certain leasehold properties.
|
|
Group like-for-like2
("LFL") sales for the four weeks from 4 to 31 December 2023 were
+9.0%, the best festive period since 2019. LFL2 sales
for FY24 H1, including New Year's Eve, continued to demonstrate an
improving trend at -2.8%.
|
§ Peach Pubs,
following the opening of our 22nd
Peach pub in November 2023, the brand delivered its best ever
Christmas trading period, and continues to trade well.
|
|
§ Revolución de
Cuba has also seen a pleasing
performance across FY24 H1. Corporate guests return to Christmas
parties in full this year, and our refreshed brand proposition
delighted party-goers who recorded excellent guest feedback
scores.
|
|
§ Revolution
continues to experience challenged trading as a
result of its younger guests who are disproportionately impacted by
the cost-of-living crisis pressurising their discretionary
income.
|
|
§ Founders &
Co. continues to go from strength
to strength, delivering double-digit LFL2 growth every
month in FY24 H1 as it continues to build on its status as a
community hub for likeminded guests. This concept is now well
positioned for growth and is an exciting prospect for the
Group.
|
|
Despite a strong festive trading
period, the macroeconomic trading environment continued to provide
a challenging trading environment. The prospect of the statutory
blended 11% increase in the national living wage in April 2024 will
add further cost pressure. Accordingly, eight site closures were
announced in January 2024 to reduce expected future
losses.
|
|
The Board remains confident of
achieving Alternative Performance Measures ("APM")
adjusted1 EBITDA in line with its previous expectations.
Net Bank Debt is £21.8 million at 10 April 2024.
|
Following an ongoing period of
softer trade post-Christmas, coupled with significant cost
pressures on the Group and industry, today we have announced that
the Board has concluded that it is in the best interests of the
Group for Revolution Bars Limited to propose a Restructuring Plan,
alongside a number of additional measures to be implemented across
the Group to re-shape the business, as well as exploring, in
parallel, a Formal Sale Process in order to deliver the best
outcome for stakeholders.
In order to fund a potential
Restructuring Plan and provide working capital for the Group, the
Board has concluded that the Group needs to raise additional equity
capital from new and existing investors through a Fundraising.
Further details of the proposed Fundraising, Restructuring Plan and
Formal Sale Process are contained in a separate announcement,
released this morning.
1 Adjusted performance
measures exclude exceptional items, share-based payment charges and
bar opening costs
2 Like-for-like ("LFL") sales
are same site sales defined as sales at only those venues that
traded in the same week in both the current and prior
year
3 APM refers to Alternative
Performance Measure being measures reported on an IAS 17
basis
Rob Pitcher, Chief Executive Officer, said:
"The first half of FY24 has seen continued challenges with
the cost-of-living crisis disproportionately impacting particularly
the discretionary expenditure of our young Revolution brand guests.
Revolución de Cuba and Peach have been less impacted as the guest
profile is more affluent, and both brands enjoyed very strong
festive trading, and Revolución de Cuba, in particular, has shown
excellent trading when compared against the wider Bars
market.
I would like to take this opportunity to thank our brilliant
teams for always bringing a smile to our guests, and their
continued resilience and hard work in the face of these challenging
times. They have delivered another brilliant Christmas, continue to
delight and thrill our guests, and I appreciate their continued
professionalism."
Enquiries:
Revolution Bars Group plc
|
Tel: 0161 330 3876
|
Rob Pitcher, CEO
Danielle Davies, CFO
|
|
Cavendish (Nominated Adviser and Broker)
|
Tel: 020 7220 0500
|
Matt Goode / Simon Hicks / Teddy
Whiley / Hamish Waller (Corporate Finance)
Tim Redfern / Harriet Ward
(ECM)
|
|
Instinctif (Financial PR)
|
|
Matt Smallwood
Justine Warren
|
Tel: 020 7457 2005
Tel: 020 7457 2010
|
|
|
Chairman's Statement
After three frustrating festive
trading periods, hampered by the pandemic, strikes, and other
external factors, it was good to see the Group's best festive
trading period since 2019. Corporate guests returned in force, and
with fewer train strikes impacting consumer confidence, we were
pleased to see improved walk-in custom also. The Group delivered
like-for-like2 ("LFL") sales of +9.0% during the key
December weeks, as well as an improving trend in LFL2
sales overall in the first half of the year.
Peach experienced its best ever
Christmas trading period, hitting new records in three consecutive
weeks. Revolución de Cuba also saw
double-digit LFL2 growth and continued to outperform the
bars market for the past 13 of the last 13 months to December 2023.
Founders & Co. continues to go from strength to strength, also
delivering double-digit LFL2 growth.
These three brands provide a
strong backbone to the business, with plenty of opportunity for
growth and expansion.
Revolution had a strong Christmas
but was again disproportionately impacted by the limited
discretionary spending of its younger guest base. We are pleased to
see excellent guest feedback when our young guest base do join us,
but the challenging cost-of-living crisis continues to impact their
ability to go out on a frequent basis. Accordingly, we have had to
take action by closing certain sites to secure the future of the
wider Group, and by exploring a more formal turnaround strategy for
this part of the Group. We look forward to the day that our young
guest base can return with more frequency to our Revolution branded
sites.
Our business
At the end of the reporting period
the Group operated 88 venues consisting of the following brands:
Revolution (46 bars), focused on young adults; Revolución de Cuba
(17 bars), which attracts a broader age range; Playhouse (two
bars), a competitive socialising offering; Founders & Co. (one
bar), an artisanal market-place experience; and the Peach Pubs (22
pubs) offering high quality food and drink in the heart of
England.
One new Peach Pub, being The Three
Horseshoes, was opened late FY24 H1 and is performing in line with
expectations.
In January 2024 we took the
difficult decision to close eight unprofitable bars in total,
across the Revolution, Revolución de Cuba, and Playhouse brands,
which takes the Group portfolio to 58 bars and 22 pubs. Since June
2023, we have closed 10 bars and currently retain the leases on
seven of these with negotiations continuing to exit the
leases.
We continue to monitor our
portfolio of sites to ensure that management focus is appropriately
focused on the brands and sites where genuine strong performance
and growth can be achieved. It has been necessary to complete the
above closures to mitigate future site losses and allow our key
sites to thrive.
Our results
Sales for the 26-week period of
£82.3 million (FY23 H1: £76.0 million) were 8.3% higher, reflecting
a strong festive trading period in FY24, where we welcomed the full
return of corporate guests. The heightened sales also include Peach
for the full half year in FY24, whereas the prior year only
included Peach post-acquisition from October 2022. Despite a good
Christmas, there is still room for growth in our business and we
hope to continue outperforming the key Christmas trading period in
years to come, when the Group is not disrupted by continued
external factors.
Our statutory profit before tax
for the period of £3.1 million (FY23 H1: loss before tax of (£0.1)
million) reflects the increase in sales and non-cash gains from
disposing of two leases. Adjusted1 EBITDA, our preferred
KPI, is significantly influenced by IFRS 16 and thus the Directors
believe that business performance is best measured by the directly
comparable IAS 17 Alternative Performance Measures3
("APM") of adjusted1 EBITDA profit of £3.2 million (FY23
H1: profit of £5.1 million). The reduction in APM3
adjusted1 EBITDA is a direct result of reduced
LFL2 sales as well as heightened costs.
The Group continues to operate a
£30.0 million Revolving Credit Facility ("RCF" and had net bank
debt of £20.0 million at FY24 H1 end. As at 10 April 2024, the
Group had net bank debt of £21.8 million.
Our People
I would like to take this
opportunity to thank all our colleagues in the Group; whether you
are based in one of our bars or pubs, or in the Support Centre, our
people have shown real resilience and enthusiasm in overcoming and
navigating our way through the challenges facing Hospitality. Our
enthusiastic and ambitious workforce create amazing experiences in
all our pubs and bars by delivering excellent service to our
guests.
Current trading
After a strong Christmas, trading
has been challenging in January and February with the ongoing
strain on consumer finances. Revolución de
Cuba and Peach Pubs continue to see much better performance than
the Revolution brand, whose guests remain more heavily impacted by
the cost-of-living crisis. With improvements to the guest
proposition in both main bar brands and an array of exciting events
and guest experiences launching in the coming months, we anticipate
seeing growth in performance.
We are pleased to see an
improvement in economic data, with inflation and interest rates
stabilising. Despite the cost impact of National Minimum Wage
increases on the business, this does also constitute a significant
pay increase for many of our teams and guests.
We continue to see pleasing
advancements in our brand offerings and guest journey, and the
Board remains confident of achieving APM3
adjusted1 EBITDA in line with market expectations set in
January 2024 for FY24.
Fundraising, Restructuring Plan, Formal Sale Process and
M&A Process and Fundraising
Following an ongoing period of
softer trade, coupled with significant cost pressures on the Group,
today we have announced a Fundraising to fund a potential
Restructuring Plan, and provide working capital support for the
Group. At the same time as the Fundraising, we have also
announced our intention to propose a Restructuring Plan for
Revolution Bars Limited together with a number of additional
measures to be implemented across the Group to re-shape its
business, as well as exploring, in parallel, a Formal Sale Process
in accordance with the City Code on Takeovers and Mergers and an
M&A Process, in order to deliver the best, outcome for the
stakeholders.
The Group has already implemented many actions to mitigate the
impact on the Group, including driving operational efficiencies,
reducing costs and cash outflows throughout the business, which has
included redundancies and reductions in overhead costs, in addition
to also reducing capital expenditure.
The impact of such strategies has
demonstrated improved performance in the Group, particularly in
Revolución de Cuba and Peach. However, the Board has decided it is
necessary to propose a Restructuring Plan to enable improved
performance from the Group, at the same time as commencing a Formal
Sale Process.
Further details of the proposed
Fundraising, Restructuring Plan, Formal Sale Process and the
M&A Process are contained in a separate announcement, released
this morning.
Keith Edelman
Non-Executive Chairman
10 April 2024
1 Adjusted performance
measures exclude exceptional items, share-based payment charges and
bar opening costs
2 Like-for-like ("LFL") sales
are same site sales defined as sales at only those venues that
traded in the same week in both the current and prior
year
3 APM refers to Alternative
Performance Measure being measures reported on an IAS 17
basis
Chief Executive Officer's statement
Business review
Festive trading across all brands
was very strong, seeing +9.0% like-for-like sales across the four
key trading weeks, being the best festive period since 2019. When
there is a reason to come out and celebrate, we are pleased to see
that our guests choose our venues. Bars saw the return of corporate
Christmas parties, with Revolución de Cuba
in particular experiencing pre-booked party revenue over the
festive period grow significantly by 26% versus the prior year.
Likewise, pubs traded very strongly benefiting from family festive
celebrations, some of whom have only felt comfortable in large
groups this year following the pandemic.
We are also seeing a benefit where
companies are increasing their team welfare budgets as a
counterbalance to working remotely. We are encouraged to receive
very positive guest feedback on such events.
Trading in the first half of the
year has reflected the patterns seen in the wider industry. The
cost-of-living crisis continues to have a higher impact on our
younger guests in particular and hampers our progress. Performance
across our brands is very much based on age and socio-economic
groupings. Bars sit within a challenged market, with Revolution
particularly impacted by the cost-of-living issues of younger
guests. Revolución de Cuba performs better due to a slightly older
guest base, further progressed in their careers with more stable
income and therefore less impacted by rises in the
cost-of-living.
Pubs are performing well in part
as a result of the more affluent socio-economic status of these
guests, and we are pleased with performance over the first half. We
are confident that once the cost-of-living crisis has run its
course that younger guests will return to our venues as they did
immediately post-pandemic.
The sector in general is
experiencing a divergence in performance, which is in line with the
trends we experience, with pubs and restaurants performing more
strongly than bars and late-night venues. The bar market has been
down 8-10% throughout 2023.
The bar market has also been
impacted by a reduction in commuters and the ongoing regular rail
strikes which have targeted weekend trade. We continue to see the
impact of working from home, particularly on Fridays, which is our
second busiest trading day of the week. Train journeys have
remained approximately 20% lower than pre-pandemic levels
throughout the reporting period, with seven of the weekends in the
reporting period affected by strikes. Working from home on a Friday
also continues to negatively impact trading in our bars.
In addition, the industry and
ourselves have seen an ever-increasing cost base fueled by
inflation, increases in minimum wage, and business rates continue
to rise well above inflationary levels. Other cost pressures
started to ease during the reporting period, and it was pleasing to
see utilities prices in particular reduce. The general cost of
goods has also started to stabilise, but the prospect of a blended
11% increase in national living wage impacts the business by
approximately £3 million for a full year, so remains an additional
burden.
We were very pleased to open our
first new Peach Pub, The Three Horseshoes, since acquiring the
business in October 2022. The pub is now well established in the
community, and we are excited to further expand this brand when the
opportunity arises.
In order to fund such future
growth, coupled with the ongoing and increasing cost challenges,
the business made the difficult decision to close eight of its
least profitable bars as part of Management's constant review of
the Group estate.
Our Brand family
Revolution's 41 bars (after
eight closures in January 2024) are aimed at 18 to 30-year-old
guests, who have been disproportionately impacted by the ongoing
cost-of-living crisis. A night out is now seen as a treat occasion,
and accordingly we have continued to support those guests with
excellent value for money through offers such as £2.99 food and
drink deals and extended 2-4-1 cocktail happy hours. We continue to
focus on creating occasions for guests to enjoy through themed
brunches, engaging entertainment, and events such as Bangers Bingo.
We are pleased to see the Revolution brand still perform well on
big occasions such as pay-day weekends, bank holiday weekends and
Christmas.
Revolución de Cuba's 15 bars
are aimed at a slightly older target market who are further into
their careers and have more disposable income and are therefore
more protected from the cost-of-living crisis. Guests continue to
demonstrate resilience, with the return of corporate guests during
the festive period resulting in very strong trade. Our live music
and entertainment offering engages our guests, and we are pleased
to have outperformed the bars market for 13 out of the last 13
months to December 2023.
Peach Pubs's 22 beautiful
gastropubs have continued to perform well since acquisition, with
full integration into the business almost complete. Festive trading
was especially strong, with record-breaking weeks. Whilst the
unseasonably wet July and August challenged trade, the brand
continues to perform well with its more-affluent guests remaining
resilient to external challenges. We were excited to open our first
new Peach Pub, since acquisition, in FY24 H1.
Founders & Co., our
market hall concept in Swansea, has performed well over the last 12
months, building an exceptional reputation in its local market, and
continues to develop towards maturity, having now been open for two
years. We are very excited by the brand and see this concept primed
for expansion.
Playhouse, our competitive
socialising concept, saw the closure of its second site in
Newcastle-under-Lyme in the year due to lack of footfall. The
original venue, in Northampton, continues to trade well and shows
good signs of progress in a difficult location. We were very proud
to see the brand's Slice Shop Pizza offering, once again, make the
final of the National Pizza Awards in 2023.
Group strategic priorities
We continue to focus on our five
key strategic priorities, which we believe are key to driving
performance and navigating the ongoing challenging environment.
Below is some of our progress made across FY24 H1:
· Maximising Revenue &
Profit:
o We opened our first new Peach Pub in FY24 H1, welcoming The
Three Horseshoes to the brand portfolio;
o Peach synergies are progressing well, with the Spirits tender
and range rollout completed. The Draught beer tender was also
completed with the new range implemented in early 2024;
o A
"value for money" focus saw the £2.99 summer meal deal extended
until the festive menu period, and then relaunched in January 2024.
We continue to explore value for money offerings to help our guests
enjoy themselves at a price they can afford;
o Following a review of the profitability of the Group's
portfolio, the least profitable bars have seen 10 closures in FY24
to date, and various partial closures were seen across bars in
January and February; and
o A
huge focus on pre-booked revenue has seen significant growth in
weekly brunch events in both of our main bar brands. Key dates and
Christmas performed extremely well, with growth in pre-booked
revenue over the festive period of 15.8% across bars, and across
the first half of the year of 14.8%. Third party gifting agencies
also performed very well based on strengthening relationships with
brands such as Virgin Experience, doubling in growth in the trading
period.
· Guest
Experience:
o Revolución de Cuba brand proposition has been trained into
all team members, with initial great feedback from guests. Key
guest experience improvements have been trialled and successfully
rolled out across the brand, with the focus on delivering a fiesta
every day;
o A
current focus in Revolution on consistently delivering brand basics
every day, whilst delivering outstanding value for money for our
guests whilst they are struggling financially;
o Revolution brand proposition research phase was completed
during FY24 H1; creation and refinement phase is ongoing with
trials due to be implemented in the Spring;
o Brand collaboration with Red Bull for the student return,
which delivered some outstanding results through our joint House
Parties campaign, which will be built upon for 2024;
o Brand collaboration with Barratt Sweets has led to the
creation of three new Revolution Flavour vodka which will launch
into the brand over the Easter weekend, and will be a feature of
the Spring 2024 campaign; and
o A
Music and Events manager was recruited, and a full overhaul of the
Revolution background music system has been completed. A full
programme of events will be launched into the Revolution brand in
the Spring, with a focus on Weekend Day parties to capture a
slightly older target market who have higher disposable
income.
· Cost
Control:
o A
reduction in energy consumption across our bars of 35% on the 2017
baseline has helped mitigate periods of heightened utilities costs.
Pleasingly, wholesale prices continue to fall. Our dynamic
purchasing agreement for forward buying is working well;
o New technology continues to be trialled or rolled out across
our sites including intelligent extract and heat recovery
technology;
o At the half year we have delivered annualised £1.1 million in
synergies from the acquisition of Peach through a reduction in
people costs, food costs, other goods not for resale, and drink
purchasing synergies now flowing through the completion of the
Spirits and Beer tenders; and
o An updated labour management system has been rolled out to
all bars brands, with projected annual efficiency savings of £1.1
million.
· Diversification of
Sales:
o Finalisation of a brand partnership with "The Jockey Club"
will see the launch of a Revolution branded bar at the Grand
National horseracing meet at Aintree in April 2024. We are hopeful
that this will develop into a wider partnership; and
o Brand collaboration with Barratt Sweets has been established
for the sale of Revolution Flavour vodka shots in our bars, and we
will look to develop this relationship over time if the launch
proves successful.
· Brand Awareness and ESG
including Sustainability and EVP:
o We were incredibly proud to have improved our Carbon
Disclosure Project score from a B to an A- this year, moving the
Group into the leadership band. Our score is now higher than the
Europe regional average, and higher than the Bars, hotels &
restaurants sector average;
o Further reduction in energy usage across our bars' estate of
35% on a like-for-like basis, compared to our 2017 baseline,
through best practice initiatives including rolling out cellar
cooling energy efficient tech to all bars;
o Half-hourly meters are being rolled out to all Peach Pubs to
enable the same energy reduction plan to take place in pubs. Peach
waste collection has moved to Biffa, allowing better analysis of
recycling rates. Our Planet Heroes in the pubs maintain a focus on
these two key areas and other energy saving methods;
o Extending our twice-yearly Quality of Life survey to our
Peach colleagues, we were pleased to still deliver exceptional
survey results for the Group despite difficult trading conditions.
Ongoing development of training and development maintains a focus
in delivering an incredible place to work for our people;
and
o Strengthened our commitment to suicide prevention within the
industry by introducing a safeguarding tool, R;PPLE, to
automatically and discretely intercept content from harmful
searches. We are the first in the hospitality industry to have
implemented this.
Our People
The challenges faced by our young
guests are also reflective of what our younger team members are
facing. We employ a significant number of students and other young
people, and we are aware of their struggles on a daily basis and
look to ways to support them. We welcome the National Living Wage
increases for our teams to help them combat the cost-of-living
crisis.
Due to current trading, we have
had to make the difficult decision to make some redundancies in the
support centre also, resulting in a reduction in people costs of
approximately 10%. Our focus has been on clear and open
communication to all colleagues across this challenging time. Our
latest Quality of Life colleague survey, in the Autumn, reflected a
drop in our employee Net Promotor Score ("NPS"); however, the
results were still towards the top end of historical
surveys.
I am very proud of the consistent
high-quality service our teams provide to our guests, that is
reflected in the continued high levels of guest NPS
feedback.
Market outlook
Whilst we remain cautious of the
macro-economic climate, we are pleased to see some positive
indications for the consumer.
Inflation has come down from peak
levels and continues to see a downward trend. Likewise, interest
rates look to have peaked and are forecast to fall during 2024.
Household disposable income, in January 2024, was at its highest
level since March 2022, and the energy price cap is set to fall in
April 2024.
Consumer confidence is at its
highest point since January 2022, with the National Living Wage
increase set to deliver approximately £45 per week more to younger
workers in full time employment. Whilst all the above should
provide a big step forward for consumer facing businesses such as
ours, some concerns do remain.
Tube and rail strikes in response
to the cost-of-living crisis have had devastating impacts on
Hospitality businesses since 2022; however, several unions have
agreed deals to prevent further strike action, reducing the
potential impact of strike action in 2024.
The cost of delivering the
increases in National Minimum Wage and National Living Wage are
significant for any employee-led businesses. Business rates are
being increased in April 2024 by 6.9%, which was the inflation rate
back in September 2023 and not reflective of current market
conditions.
The Government needs to recognise
these challenges, which are not unique to our business, and reduce
the burden of business tax increase. In order for the sector to
deliver economic growth and employment, further support should be
offered to Hospitality through reduced VAT for a fixed period of
time and business rates support measures for companies of all
sizes.
Current Trading and Outlook
Following a strong festive period,
trading since the turn of the year has remained challenging. The
post-Christmas January hangover lasted into February, with this
impact being seen across the wider industry and many businesses
having to extend their January offerings into February to maintain
guest footfall.
The divergence in performance
across the brands remains consistent with Revolución de Cuba and Peach performing more strongly than
the Revolution brand, which is reliant on the younger generation
who we know are still suffering with the cost-of-living crisis. We
are expectant that the planned above inflation increase in National
Minimum Wage will provide a meaningful boost to this generation's
spending power, allowing them to return to nights out on a more
frequent basis. Economic data also looks more positive for the
Revolución de Cuba and Peach guest.
Whilst we anticipate some economic
improvement from which we will benefit, the markets in which we
operate are expected to remain challenging in the near term.
However, the Board remains confident in achieving trading
performance in line with its previous expectations.
Rob Pitcher
Chief Executive
Officer
10 April 2024
Financial Review
Introduction
· The "H1 FY24"
accounting period represents trading for the 26 weeks to 30
December 2023 ("the period"). The comparative period "H1 FY23"
represents trading for the 26 weeks to 31 December 2022 ("the prior
period");
· The Group continues
to offer comparative Alternative Performance Measures3
("APM") of the numbers converted to IAS 17 following the
implementation of IFRS 16 in FY20. APM3 for the current
period are given equal prominence in this review because, in the
opinion of the Directors, these provide a better guide to the
underlying performance of the business;
· The results
information therefore gives FY24 H1 IFRS 16 statutory numbers,
followed by APM3 under IAS 17. A reconciliation between
statutory and APM3 figures is provided in note
19.
|
H1 FY24
(IFRS 16)
£m
|
H1 FY23
(IFRS 16)
£m
|
H1 FY24(IAS 17)
£m
|
H1 FY23
(IAS 17)
£m
|
Total Sales
|
82.3
|
76.0
|
82.3
|
76.0
|
Operating Profit
|
7.2
|
3.1
|
(0.7)
|
0.9
|
Adjusted1 EBITDA
|
8.9
|
9.8
|
3.2
|
5.1
|
Profit/(Loss) Before Tax
|
3.1
|
(0.1)
|
(2.1)
|
0.0
|
|
|
|
|
|
Non-cash Exceptionals
|
4.0
|
0.0
|
(0.8)
|
-
|
Cash Exceptionals
|
(0.1)
|
(1.5)
|
(0.1)
|
(1.5)
|
|
|
|
|
|
Net Bank Debt
|
(20.0)
|
(18.5)
|
(20.0)
|
(18.5)
|
Results
We are pleased to see an increase
in total sales for the Group from £76.0 million to £82.3 million a
result of the strong festive trading period, as well as the impact
of having Peach for the full half-year, offset by softer
like-for-like2 ("LFL") sales. Continued heightened
inflationary pressures impact on the adjusted1 EBITDA
position on both a statutory and APM3 EBITDA
perspective, whilst Management has focused on effective cost
mitigations and reductions wherever possible.
The underlying result, as measured
by our preferred APM3 adjusted1 EBITDA, was
£1.9 million lower than the equivalent prior year period, at a
profit of £3.2 million (FY23 H1: profit of £5.1 million). This is
our preferred metric as it is a proxy for the underlying cash
available, in a normal trading period, for investment, loan
servicing and repayment, and for distributing to shareholders in
the form of dividends. Softer like-for-like2 sales and
heighted costs in the business have driven this
reduction.
Gross profit in the half year was
£63.0 million (FY23 H1: £58.6 million) which amounted to a gross
margin of 76.5% comparable to 77.1% in the equivalent prior period.
The Group has experienced strong margins in recent years due to
product mix, and improved discounting and trade agreements.
However, this has reduced slightly as a result of the impact of
Peach's higher-food participation driving a lower margin on the
full 26-week period. Bars margins continue to improve.
Underlying profitability
The Board's preferred profit
measures are APM3 adjusted1 EBITDA and
APM3 adjusted1 pre-tax profit/(loss) as shown
in the tables below. The APM3 adjusted1
measures exclude exceptional items, bar opening costs and charges
arising from long-term incentive plans ("LTIPs).
|
26 weeks
ended
30 December
2023
IFRS 16
£m
|
26 weeks
ended
31 December
2022
IFRS 16
£m
|
52 weeks
ended
1
July
2023
IFRS 16
£m
|
26 weeks
ended
30 December
2023
APM3
IAS 17
£m
|
26 weeks
ended
31 December
2022
APM3
IAS 17
£m
|
52 weeks
ended
1
July
2023
APM3
IAS 17
£m
|
|
|
|
|
|
|
|
Pre-tax profit/(loss)
|
3.1
|
(0.1)
|
(22.2)
|
(2.1)
|
0.0
|
(9.1)
|
Add back Exceptional
items
|
(3.9)
|
1.5
|
20.2
|
0.9
|
1.5
|
7.7
|
Add back charge/(credit) arising
from LTIPs
|
0.1
|
(0.2)
|
0.1
|
0.1
|
(0.2)
|
0.1
|
Add back Bar opening
costs
|
-
|
-
|
-
|
-
|
-
|
-
|
Adjusted1 pre-tax (loss)/profit
|
(0.7)
|
1.2
|
(2.1)
|
(1.2)
|
1.4
|
(1.5)
|
Add back Depreciation
|
5.6
|
5.4
|
12.1
|
3.0
|
2.8
|
6.0
|
Add back Amortisation
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Add back Finance costs
|
4.1
|
3.2
|
7.1
|
1.4
|
0.8
|
2.1
|
Adjusted1 EBITDA
|
8.9
|
9.8
|
17.1
|
3.2
|
5.1
|
6.6
|
Exceptional items and accounting for long-term incentive
plans
Exceptional items,
by virtue of their size, incidence or nature, are
disclosed separately in order to allow a better understanding of
the underlying trading performance of the Group. Exceptional
expenses for the half-year were credit of £3.9 million (FY23 H1:
charge of £1.5 million). This predominantly related to exceptional
gain on disposals as a result of exited leases, some lease
modifications arising on regeared leases, offset by some
exceptional costs associated with exiting the sites. The prior year
charge predominantly relates to a charge of £1.5 million made up of
the expenses incurred during the acquisition of Peach.
Credit/charge relating to long-term incentive
schemes
A charge of £0.1 million (FY23 H1:
credit of £0.2 million) on long-term incentive schemes arose as a
result of the restricted share award schemes, with the prior year
credit arising on the forfeiture on previous schemes.
Finance costs
Finance costs of £4.1 million
(FY23 H1: £3.2 million) are made up of £1.3 million of bank
interest paid on borrowings (FY23 H1: £0.8 million) and £2.8
million of lease interest (FY23 H1: £2.4 million).
Liquidity
At the start of FY24 the Group
held a £30.0 million Revolving Credit Facility "RCF", expiring
October 2025. Interest is charged on the utilised RCF at a margin
determined by leveraging plus SONIA, with unutilised RCF values
having interest charged at 40% of margin.
In March 2023, an amendment was
made to the facility to hold a £1.35 million Energy Guarantee for
the purposes of signing a new energy contract. A further amendment
was made in October 2023 such that all originally agreed reductions
in total facility level be deferred to 30 June 2025, meaning at
that date the £30.0 million facility will reduce by £5.0 million to
a £25.0 million facility. In November 2023, the Energy Guarantee
was reduced to £1.1 million in reflection of reduced energy prices
and buying patterns.
In accordance with the updated
amendments, the Group will therefore have committed funding
facilities available during the going concern assessment period as
shown in the table below:
|
Energy
Guarantee
£m
|
RCF
£m
|
Total
Facility
£m
|
31 December 2023
|
1.1
|
28.9
|
30.0
|
30 June 2024
31 December 2024
|
1.1
1.1
|
28.9
28.9
|
30.0
30.0
|
30 June 2025
|
1.1
|
23.9
|
25.0
|
With reference to the Going
Concern statement in the Financial Review, the Group has agreed in
principle, subject to final and legally binding documentation being
entered into, and subject to the Restructuring Plan of Revolution
Bars Limited being sanctioned, a number of support measures with
National Westminster Bank plc (the "Lender"). This additional
support would be documented through the Restructuring Plan of
Revolution Bars Limited. However, the Lender wants to understand
the outcome of the Formal Sale Process, and whether a more optimal
outcome could be achieved through the Formal Sale Process or the
Restructuring Plan of Revolution Bars Limited. The Lender has also
agreed to waive certain anticipated covenant breaches to enable the
Group to allow the Plan Company to explore the implementation of a
Restructuring Plan and progress the Formal Sale Process.
Taxation
There is no tax payable in respect
of the current period due to previous losses made.
Earnings/(loss) per share
Basic earnings per share for the
period was 1.3 pence (FY23 H1: earnings of 0.1 pence). Adjusting
for exceptional items, non-recurring opening costs and charges
arising from long-term incentive plans resulted in an
adjusted1 basic loss per share for the period of (0.6)
pence (FY23 H1: earnings of 0.7 pence).
Operating cash flow and net bank debt
The Group generated net cash flow
from operating activities in the period of £10.1 million (FY23 H1:
generated 3.3 million), whilst capital
expenditure payments of £1.2 million, bank loan interest £1.3
million, and loan repayments of £6.8 million (offset by drawdowns
of £5.8 million), and lease rental payments of £6.0 million
contributed to a net cash inflow in the period of £0.6 million
decreasing net bank debt of £(21.6) million as at 1 July 2023 to a
net bank debt closing position of £(20.0) million as at 30 December
2023.
Capital expenditure
The Group made capital investments
of £1.2 million (FY23 H1: £4.6 million) during the period; this was
incurred entirely on existing bars, comprising some minor required
refurbishment work and ongoing reinvestment in bars and pubs, as
well as equipment replacement and IT investment.
Dividend
As notified previously, the Board
has suspended payments of dividends. There was no dividend paid or
declared in either the current or prior period.
Going concern
Following a period of softer
trading, which we have seen directly impact and reduce headroom on
the Group's facilities, the Board has had to consider all strategic
options available to it. The Group has already deployed several
strategies to combat the ongoing significant external challenges
including optimising staffing levels, amending opening hours and
introducing temporary closures during quieter periods. There have
been a number of redundancies and reductions to overhead costs, as
well as reducing capital expenditure. The Group has also performed
site rationalisations via consensual landlord negotiations where
possible.
As a result, despite challenging
conditions, performance has been encouraging, particularly across
Revolución De Cuba and Peach Pubs. The Revolution branded bars have
demonstrated gradual improvements, culminating in the strongest
Christmas trading period in 2023, since 2019, with Group
like-for-like sales at +9.0%.
Despite this, the Board has
concluded that it is in the best interest of the Group for
Revolution Bars Limited, to propose a Restructuring Plan alongside
a number of additional measures to be implemented across the Group
to re-shape its business, as well as exploring, in parallel, a
Formal Sale Process and an M&A Process, in order to deliver the
best outcome for stakeholders. Advisers have been appointed to
support the Group through this process.
In order to fund a potential
Restructuring Plan, and provide additional working capital for the
Group, the Board has concluded, having undertaken a detailed review
of the Group's financial forecasts and expected trading
performance, that the Company needs to raise additional equity
capital from new and existing investors is required, being the
Fundraising, further details of which are set out in a separate
announcement this morning. Without the additional funding proposed
to be raised in connection with the Fundraising, and without the
cost savings delivered through the proposed Restructuring Plan, the
Board anticipates that the Group will face liquidity pressures in
Q1 FY25.
As an alternative to the
Restructuring Plan, the Group has also announced the commencement
of a Formal Sale Process and the M&A Process to explore whether
a sale of the shares in the Company, a sale of the shares in one or
more of the Company's subsidiaries, or a sale of the business and
assets of either the Company and/or the business and assets of the
Company's subsidiaries, will provide a more beneficial outcome for
the stakeholders than the Restructuring Plan.
The Company's secured creditor,
the Lender, has agreed, in principle and subject to final and
legally binding documentation being entered into, and to the
Restructuring Plan being implemented, to provide, in
aggregate, c.£6.9 million of additional support to the
Group. £6.2 million of this additional support would be
documented through the Restructuring Plan of the Plan
Company by way of a £4.0 million write-off of existing
debt and 12 months of payment-in-kind interest estimated,
based on the latest company projections, to total £2.2
million. In addition, the Lender has provided c.£0.7 million
of additional working capital support by allowing the Group to
retain proceeds from the sale of the freehold support office
and has also agreed in principle and subject to final and
legally binding documentation being entered into and subject to the
Restructuring Plan being sanctioned, to extend the term of the
facilities, reschedule the amortisation of the outstanding
facility, relax the minimum liquidity covenant until April 2025 and
delay the reinstatement of the maintenance covenants for a period
of time to provide the Group with significant
flexibility.
However, the Lender wants to
understand the outcome of the sale process, and whether a more
optimal outcome could be achieved through the Formal Sale Process
or the Restructuring Plan of Revolution Bars Limited. The Lender
has also agreed to waive certain anticipated covenant breaches to
enable the Group to allow the Plan Company to explore the
implementation of a Restructuring Plan and progress the Formal Sale
Process.
A material uncertainty exists due
to the risk that rather than improving, trading and cashflows
deteriorate below the downside case considered by the Board, or
that in the event that the Restructuring Plan proceeds, that it is
either delayed beyond the currently anticipated timeline for which
the Company has adequate working capital or not sanctioned by the
Court, leading to the Fundraising and any additional support from
the Lender (as outlined above) not coming into effect. It cannot be
guaranteed that the bank would extend their forbearance to
accommodate a further review of options available to the
business.
The Board is taking all necessary actions for
the most beneficial outcome for the stakeholders, as well as
ensuring the Group can return to normal levels of refurbishment and
estate expansion. Accordingly, the
financial statements continue to be prepared on the going concern
basis. However, the circumstances noted above indicate the
existence of a material uncertainty which may cast significant
doubt over the ability of the Group to continue as a going concern.
The financial statements do not contain the adjustments that would
arise if the Group were unable to continue as a going
concern.
Responsibility statement of the directors in respect of the
half-yearly financial report
We confirm that to the best of our
knowledge:
• the condensed
consolidated interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting, and
• the interim management
report includes a fair review of the information required
by:
a) DTR 4.2.7R of
the Disclosure Guidance and Transparency Rules, being an indication
of important events that have occurred during the first 26 weeks of
the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining 26 weeks of the year;
and
b) DTR 4.2.8R of
the Disclosure Guidance and Transparency Rules, being related party
transactions that have taken place in the first 26 weeks of the
current financial year and that have materially affected the
financial position or performance of the entity during that period;
and any changes in the related party transactions described in the
last annual report that could do so.
Danielle Davies
Chief Financial Officer
10 April 2024
1 Adjusted performance
measures exclude exceptional items and share-based payment charges
and bar opening costs
2 Like-for-like ("LFL") sales
are same site sales defined as sales at only those venues that
traded in the same week in both the current and prior
year
3 APM refers to Alternative
Performance Measure being measures reported on an IAS 17
basis
Revolution Bars Group plc
Condensed Consolidated Statement of Comprehensive
Income
for the 26 weeks ended 30 December 2023
|
Note
|
Unaudited
26 weeks ended
30 December
2023
£'000
|
Unaudited
26 weeks ended
31 December
2022
£'000
|
Audited
52 weeks
ended
1
July
2023
£'000
|
Revenue
|
4
|
82,300
|
75,951
|
152,551
|
Cost of sales
|
|
(19,331)
|
(17,378)
|
(35,419)
|
Gross profit
|
|
62,969
|
58,573
|
117,132
|
Operating expenses:
|
|
|
|
|
- operating expenses, excluding
exceptional items
|
|
(59,701)
|
(53,988)
|
(112,039)
|
- exceptional items
|
5
|
3,898
|
(1,501)
|
(20,244)
|
Total operating expenses
|
|
(55,803)
|
(55,489)
|
(132,283)
|
Operating profit/(loss)
|
|
7,166
|
3,084
|
(15,151)
|
Finance expense
|
6
|
(4,088)
|
(3,175)
|
(7,056)
|
Profit/(Loss) before taxation
|
|
3,078
|
(91)
|
(22,207)
|
Income tax
|
7
|
-
|
257
|
(27)
|
Profit/(Loss) and total comprehensive income for the
period
|
|
3,078
|
166
|
(22,234)
|
Earnings/(Loss) per share:
|
|
|
|
|
- basic (pence)
|
9
|
1.3
|
0.1
|
(9.7)
|
- diluted (pence) (restated* - see
note 9)
|
9
|
1.3
|
0.1
|
(9.7)*
|
Dividend declared per share
(pence)
|
|
-
|
-
|
-
|
Revolution Bars Group plc
Condensed Consolidated Statement of Financial
Position
at
30 December 2023
|
Note
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Assets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Property, plant and equipment
|
10
|
34,117
|
46,028
|
36,161
|
Right-of-use assets
|
10
|
65,708
|
82,017
|
67,706
|
Intangible assets
|
|
31
|
28
|
30
|
Goodwill
|
|
17,419
|
12,111
|
17,419
|
Other non-current assets
|
11
|
646
|
-
|
-
|
|
|
117,921
|
140,184
|
121,316
|
Current assets
|
|
|
|
|
Inventories
|
|
4,318
|
4,043
|
3,405
|
Trade and other receivables
|
11
|
6,717
|
7,575
|
11,448
|
Tax receivable
|
|
38
|
-
|
-
|
Cash and cash equivalents
|
|
3,980
|
4,508
|
3,367
|
|
|
15,053
|
16,126
|
18,220
|
Total assets
|
|
132,974
|
156,310
|
139,536
|
Liabilities
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
12
|
(29,995)
|
(28,957)
|
(31,720)
|
Lease liabilities
|
13
|
(6,955)
|
(6,615)
|
(7,087)
|
Provisions
|
14
|
(871)
|
(924)
|
(871)
|
Tax payable
|
|
-
|
-
|
(27)
|
|
|
(37,821)
|
(36,496)
|
(39,705)
|
Net current
liabilities
|
|
(22,768)
|
(20,370)
|
(21,485)
|
Non-current liabilities
|
|
|
|
|
Lease liabilities
|
13
|
(111,495)
|
(117,829)
|
(118,236)
|
Interest-bearing loans and borrowings
|
15
|
(24,000)
|
(23,000)
|
(25,000)
|
Provisions
|
14
|
(1,875)
|
(2,003)
|
(1,967)
|
|
|
(137,370)
|
(142,832)
|
(145,203)
|
Total liabilities
|
|
(175,191)
|
(179,328)
|
(184,908)
|
Net liabilities
|
|
(42,217)
|
(23,018)
|
(45,372)
|
Equity attributable to equity
holders of the parent
|
|
|
|
|
Share capital
|
|
230
|
230
|
230
|
Share premium
|
|
33,794
|
33,794
|
33,794
|
Merger reserve
|
|
11,645
|
11,645
|
11,645
|
Accumulated losses
|
|
(87,886)
|
(68,687)
|
(91,041)
|
Total equity
|
|
(42,217)
|
(23,018)
|
(45,372)
|
Revolution Bars Group plc
Condensed Consolidated Statement of Changes in
Equity
for the 26 weeks ended 30 December 2023
|
|
|
Reserves
|
|
|
Share
capital
£'000
|
Share
premium
£'000
|
Merger
reserve
£'000
|
(Accumulated losses)
/ retained earnings
£'000
|
Total
equity
£'000
|
At 2 July 2022
|
230
|
33,794
|
11,645
|
(68,690)
|
(23,021)
|
Loss and total comprehensive expense for the
period
|
-
|
-
|
-
|
(22,234)
|
(22,234)
|
Credit arising from long-term incentive plans
(note 23)
|
-
|
-
|
-
|
(117)
|
(117)
|
At 1 July 2023
|
230
|
33,794
|
11,645
|
(91,041)
|
(45,372)
|
Profit and total comprehensive income for the
period
|
-
|
-
|
-
|
3,078
|
3,078
|
Charge arising from long-term incentive
plans
|
-
|
-
|
-
|
77
|
77
|
At 30 December 2023
|
230
|
33,794
|
11,645
|
(87,886)
|
(42,217)
|
Revolution Bars Group plc
Condensed Consolidated Statement of Cash
Flow
at
30 December 2023
|
Note
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52 weeks
ended
1
July
2023
£'000
|
Cash flow from operating
activities
|
|
|
|
|
Profit/(Loss) after tax from
operations
|
|
3,078
|
166
|
(22,207)
|
Adjustments for:
|
|
|
|
|
Net finance expense
|
6
|
4,088
|
3,175
|
7,056
|
Depreciation of property, plant and
equipment
|
10
|
3,207
|
2,992
|
6,634
|
Depreciation of right-of-use assets
|
10
|
2,349
|
2,411
|
5,423
|
Impairment of property, plant and
equipment
|
10
|
-
|
-
|
6,096
|
Impairment of right-of-use assets
|
10
|
-
|
-
|
12,642
|
Lease modification
|
5
|
(287)
|
(30)
|
(50)
|
Gain on disposal
|
5
|
(3,867)
|
-
|
-
|
Acquisition costs
|
5
|
-
|
-
|
1,499
|
Amortisation of intangibles
|
|
2
|
3
|
5
|
Taxation charge
|
|
-
|
-
|
27
|
Charge/(Credit) arising from long-term
incentive plans
|
8
|
77
|
(163)
|
(117)
|
Operating cash flows before
movement in working capital
|
|
8,647
|
8,554
|
17,008
|
(Increase)/decrease in
inventories
|
|
(913)
|
(208)
|
584
|
Decrease/(increase) in trade and
other receivables
|
|
4,182
|
3,378
|
(543)
|
(Decrease)/increase in trade and
other payables
|
|
(1,823)
|
(8,066)
|
(6,936)
|
(Decrease)/increase in
provisions
|
|
-
|
(390)
|
(443)
|
Net cash flow generated from
operating activities
|
|
10,093
|
3,268
|
9,670
|
Cash flow from investing
activities
|
|
|
|
|
Cost of acquisition of subsidiaries, net of
cash acquired
|
|
-
|
(9,190)
|
(10,689)
|
Purchase of intangible assets
|
|
-
|
(3)
|
(7)
|
Purchase of property, plant and
equipment
|
10
|
(1,163)
|
(4,617)
|
(5,533)
|
Net cash flow used in investing
activities
|
|
(1,163)
|
(13,810)
|
(16,229)
|
Cash flow from financing
activities
|
|
|
|
|
Interest paid
|
6
|
(1,302)
|
(754)
|
(1,895)
|
Principal element of lease payments
|
13
|
(2,789)
|
(2,236)
|
(6,432)
|
Interest element of lease payments
|
13
|
(3,226)
|
(3,098)
|
(4,885)
|
Repayment of subsidiary borrowings
|
|
-
|
(5,926)
|
(5,926)
|
Repayment of borrowings
|
15
|
(6,800)
|
(21,751)
|
(25,751)
|
Drawdown of borrowings
|
15
|
5,800
|
30,000
|
36,000
|
Net cash flow used in financing
activities
|
|
(8,317)
|
(3,765)
|
(8,889)
|
Net increase/(decrease) in cash and cash
equivalents
|
|
613
|
(14,307)
|
(15,448)
|
Opening cash and cash equivalents
|
|
3,367
|
18,815
|
18,815
|
Closing cash and cash
equivalents
|
|
3,980
|
4,508
|
3,367
|
Reconciliation of net bank
debt
|
|
|
|
|
Net increase/(decrease) in cash and cash
equivalents
|
|
613
|
(14,307)
|
(15,448)
|
Cash inflow from increase in
borrowings
|
|
(5,800)
|
(30,000)
|
(36,000)
|
Cash outflow from repayment of
borrowings
|
|
6,800
|
21,751
|
25,751
|
Opening (net bank debt)/net bank
cash
|
|
(21,633)
|
4,064
|
4,064
|
Closing net bank debt
|
|
(20,020)
|
(18,492)
|
(21,633)
|
Notes to the Half-yearly Financial Report
1. General information and basis of
preparation
(a) General
Information
Revolution Bars Group plc (the
"Company") is a company incorporated in
the United Kingdom and registered in England and Wales. Its
Registered Office is at 21 Old Street, Ashton-under-Lyne, OL6 6LA,
United Kingdom. The Company's shares were admitted to trading on
the AIM market of the London Stock Exchange on 27 July
2020.
This half-yearly Financial Report
is an interim management report as required by DTR 4.2.3 of the
Disclosure Guidance and Transparency Rules of the UK Financial
Conduct Authority (the 'FCA').
These condensed consolidated
interim financial statements as at and for the 26 weeks ended 30
December 2023 comprises the Company and its subsidiaries (together
referred to as the "Group").
(b) Basis of preparation
The annual financial statements of
the Group are prepared in accordance with UK-adopted International
Accounting Standards ("IAS") and with the requirements of the
Companies Act 2006 applicable to companies reporting under those
standards, and they apply to the half-yearly Financial Report for
the 26 weeks ended 30 December 2023 (prior period 26 weeks ended 31
December 2022).
The condensed consolidated interim
financial statements of the Group for the 26 weeks ended 30
December 2023 have been prepared in accordance with IAS 34 Interim
Financial Reporting. The condensed consolidated interim financial
statements do not include all the information and disclosures
required in the annual financial statements and should be read in
conjunction with the Group's financial statements for the 52 weeks
ended 1 July 2023.
As required by the Disclosure
Guidance and Transparency Rules of the FCA, the condensed set of
financial statements has been prepared applying the accounting
policies and presentation that were applied in the preparation of
the company's published consolidated financial statements for the
52 weeks ended 1 July 2023.
The comparative figures for the 52
weeks ended 1 July 2023 are extracted from the Company's statutory
accounts for that period. Those accounts have been reported on by
the Company's auditor, filed with the Registrar of Companies and
are available on request from the Company's Registered Office or to
download from www.revolutionbarsgroup.com.
The auditor's report on those accounts was unqualified, did include
a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report, did include a
reference to a material uncertainty relating to going concern, and
did not contain any statement under sections 498 (2) or (3) of the
Companies Act 2006.
New and amended standards adopted by the
Group
A number of new or amended
standards became applicable for the current reporting period. The
Group did not have to change its accounting policies or make
retrospective adjustments as a result of adopting these
standards.
(c) Going concern
As notified previously, the Board
has suspended payments of dividends. There was no dividend paid or
declared in either the current or prior period.
Going concern
Following a period of softer
trading, which we have seen directly impact and reduce headroom on
the Group's facilities, the Board has had to consider all strategic
options available to it. The Group has already deployed several
strategies to combat the ongoing significant external challenges
including optimising staffing levels, amending opening hours and
introducing temporary closures during quieter periods. There have
been a number of redundancies and reductions to overhead costs, as
well as reducing capital expenditure. The Group has also performed
site rationalisations via consensual landlord negotiations where
possible.
As a result, despite challenging
conditions, performance has been encouraging, particularly across
Revolución De Cuba and Peach Pubs. The Revolution branded bars have
demonstrated gradual improvements, culminating in the strongest
Christmas trading period in 2023, since 2019, with Group
like-for-like sales at +9.0%.
Despite this, the Board has
concluded that it is in the best interest of the Group for
Revolution Bars Limited, to propose a Restructuring Plan alongside
a number of additional measures to be implemented across the Group
to re-shape its business, as well as exploring, in parallel, a
Formal Sale Process and an M&A Process, in order to deliver the
best outcome for stakeholders. Advisers have been appointed to
support the Group through this process.
In order to fund a potential
Restructuring Plan, and provide additional working capital for the
Group, the Board has concluded, having undertaken a detailed review
of the Group's financial forecasts and expected trading
performance, that the Company needs to raise additional equity
capital from new and existing investors is required, being the
Fundraising, further details of which are set out in a separate
announcement this morning. Without the additional funding proposed
to be raised in connection with the Fundraising, and without the
cost savings delivered through the proposed Restructuring Plan, the
Board anticipates that the Group will face liquidity pressures in
Q1 FY25.
As an alternative to the
Restructuring Plan, the Group has also announced the commencement
of a Formal Sale Process and the M&A Process to explore whether
a sale of the shares in the Company, a sale of the shares in one or
more of the Company's subsidiaries, or a sale of the business and
assets of either the Company and/or the business and assets of the
Company's subsidiaries, will provide a more beneficial outcome for
the stakeholders than the Restructuring Plan.
The Company's secured creditor,
the Lender, has agreed, in principle and subject to final and
legally binding documentation being entered into, and to the
Restructuring Plan being implemented, to provide, in
aggregate, c.£6.9 million of additional support to the
Group. £6.2 million of this additional support would be
documented through the Restructuring Plan of the Plan
Company by way of a £4.0 million write-off of existing
debt and 12 months of payment-in-kind interest estimated,
based on the latest company projections, to total £2.2
million. In addition, the Lender has provided c.£0.7 million
of additional working capital support by allowing the Group to
retain proceeds from the sale of the freehold support office
and has also agreed in principle and subject to final and
legally binding documentation being entered into and subject to the
Restructuring Plan being sanctioned, to extend the term of the
facilities, reschedule the amortisation of the outstanding
facility, relax the minimum liquidity covenant until April 2025 and
delay the reinstatement of the maintenance covenants for a period
of time to provide the Group with significant
flexibility.
However, the Lender wants to
understand the outcome of the sale process, and whether a more
optimal outcome could be achieved through the Formal Sale Process
or the Restructuring Plan of Revolution Bars Limited. The Lender
has also agreed to waive certain anticipated covenant breaches to
enable the Group to allow the Plan Company to explore the
implementation of a Restructuring Plan and progress the Formal Sale
Process.
A material uncertainty exists due
to the risk that rather than improving, trading and cashflows
deteriorate below the downside case considered by the Board, or
that in the event that the Restructuring Plan proceeds, that it is
either delayed beyond the currently anticipated timeline for which
the Company has adequate working capital or not sanctioned by the
Court, leading to the Fundraising and any additional support from
the Lender (as outlined above) not coming into effect. It cannot be
guaranteed that the bank would extend their forbearance to
accommodate a further review of options available to the
business.
The Board is taking all necessary actions for
the most beneficial outcome for the stakeholders, as well as
ensuring the Group can return to normal levels of refurbishment and
estate expansion. Accordingly, the
financial statements continue to be prepared on the going concern
basis. However, the circumstances noted above indicate the
existence of a material uncertainty which may cast significant
doubt over the ability of the Group to continue as a going concern.
The financial statements do not contain the adjustments that would
arise if the Group were unable to continue as a going
concern.
2. Significant accounting policies
The accounting policies adopted in
the preparation of the interim condensed consolidated financial
statements are consistent with those followed in the preparation of
the Group's annual financial statements for the 52 weeks ended 1
July 2023. These accounting policies are all expected to be applied
for the 52 weeks to 29 June 2024.
Leases
Where the Company is a lessee, a
right-of-use asset and lease liability are both recognised at the
outset of the lease. Each lease liability is initially measured at
the present value of the remaining lease payment obligations taking
account of the likelihood of lease extension or break options being
exercised. Each lease liability is subsequently adjusted to reflect
imputed interest, payments made to the lessor and any modifications
to the lease. The right-of-use asset is initially measured at cost,
which comprises the amount of the lease liability, plus lease
payments made at or before the commencement date adjusted by the
amount of any prepaid or accrued lease payments, less any
incentives received to enter into the lease, plus any initial
direct costs incurred by the Group to execute the lease, and less
any onerous lease provision. The right-of-use asset is depreciated
in accordance with the Group's accounting policy on property, plant
and equipment. The amount charged to the income statement comprises
the depreciation of the right-of-use asset and the imputed interest
on the lease liability.
When a lease is disposed of, the
corresponding remaining lease liability is removed. If sufficient
right-of-use asset remains, the corresponding credit will be taken
there to appropriately remove any remaining asset also. Where the
right-of-use asset has already been written down, either partially
or in full, the remaining balance is taken as a credit to the
P&L as an exceptional gain on disposal. This is in line with
the same treatment taken on lease modifications and
regears.
Items impacting Alternative
Performance Measures
Exceptional items
Items that are unusual or
infrequent in nature and material in size are disclosed separately
in the income statement. The separate reporting of these items
helps provide a more accurate indication of the Group's underlying
business performance, which the Directors believe would otherwise
be distorted. Exceptional items typically include impairments of
property, plant and equipment and right-of-use assets, significant
contract termination costs and costs associated with major one-off
projects.
Share based payments
Charges relating to share-based
payment arrangements, while not treated as an exceptional item, are
adjusted for when arriving at adjusted EBITDA on the basis that
such amounts are non-cash, can be material and often fluctuate
significantly from period to period, dependent on factors unrelated
to the Group's underlying trading performance.
Bar opening costs
Bar opening costs relate to costs
incurred in getting new bars fully operation and primarily include
costs incurred before the opening and preparing for launch, even if
the bars do not open in the period. Although not treated as an
exceptional item, these are adjusted for when arriving at adjusted
EBITDA on the basis that such amounts are non-cash, can be material
and often fluctuate significantly from period to period, dependent
on factors unrelated to the Group's underlying trading
performance.
3. Key Risks
The directors believe that the
principal risks and uncertainties faced by the business are as set
out below. Occurrence of any of these risks or a combination
of them may significantly impact the achievement of the Group's
strategic goals;
· Consumer demand and
Cost-of-living
· COVID-19
· Climate change and
Sustainability
· Refurbishment and
acquisition of bars
· Supplier concentration
and inflationary cost rises
· Consumer trends and
PR
· Health and
safety
· National minimum/living
wage
· Funding and Interest
rates
4. Segmental reporting
The Group's continuing operating businesses
are organised and managed as reportable business segments according
to the information used by the Group's Chief Operating Decision
Maker ("CODM") in its decision making and reporting
structure.
The Group's internal management
reporting is focused predominantly on revenue and APM IAS 17
adjusted EBITDA, as these are the principal performance measures
and drives the allocation of resources. The CODM receives
information by trading venue, each of which is considered to be an
operating segment. All operating segments have similar
characteristics and, in accordance with IFRS 8, are aggregated to
form an "Ongoing business" reportable segment. Within the ongoing
business, assets and liabilities cannot be allocated to individual
operating segments and are not used by the CODM for making
operating and resource allocation decisions.
The Group performs all its
activities in the United Kingdom. All the Group's non-current
assets are located in the United Kingdom. Revenue is earned from
the sale of drink and food with a small amount of admission and
other income.
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Revenue
|
82,300
|
75,951
|
152,551
|
Cost of sales
|
(19,331)
|
(17,378)
|
(35,419)
|
Gross profit
|
62,969
|
58,573
|
117,132
|
Operating expenses:
|
|
|
|
- operating expenses excluding exceptional
items
|
(59,701)
|
(53,988)
|
(112,039)
|
- exceptional items
|
3,898
|
(1,501)
|
(20,244)
|
Total operating
expenses
|
(55,803)
|
(55,489)
|
(132,283)
|
Operating profit/(loss)
|
7,166
|
3,084
|
(15,151)
|
Bar & Pub Revenue relates to food, drink and
admission sales from the Group's bars and pubs. Other Revenue
includes photobooth income, as well as other smaller revenue
streams including rental, commission, accommodation, gaming and
online revenue.
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Bar & Pub Revenue
|
80,263
|
74,798
|
149,742
|
Other Revenue
|
2,037
|
1,153
|
2,809
|
Revenue
|
82,300
|
75,951
|
152,551
|
5.
Exceptional items
Exceptional items, by virtue of their size,
incidence, or nature, are disclosed separately in order to allow a
better understanding of the underlying trading performance of the
Group. Exceptional charges/(credits) comprised the
following:
|
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Administrative expenses:
|
|
|
|
|
- impairment of right-of-use assets
|
|
-
|
-
|
12,642
|
- impairment of property, plant and
equipment
|
|
-
|
-
|
6,096
|
- lease modification
|
|
(287)
|
(30)
|
(50)
|
- net gain on disposal
|
|
(3,867)
|
-
|
-
|
- acquisition costs
|
|
-
|
1,498
|
1,499
|
- business restructure
|
|
256
|
33
|
57
|
Total exceptional
(credit)/charge
|
|
(3,898)
|
1,501
|
20,244
|
No impairment review is conducted at the
half-year, but a full impairment review is conducted across the
entire asset base at year-end. The two exited sites were already
fully impaired.
The prior year
exceptional items predominantly related to the legal and
professional costs incurred during the acquisition of
Peach.
The exceptional credits in FY24 H1
predominantly relate to the credit that arises under an IFRS 16
lease modification where a reduction in lease term or value is
recognised, but the asset has already been impaired to a lower
value. In those instances, the corresponding credit is taken as an
exceptional credit.
Exceptional gains on disposal were
also recognised on the exit of two leases through extinguishing
IFRS 16 lease liabilities and is net of any surrender premiums paid
or payable to, or received or receivable from, landlords, other
relevant exit costs, and impairment on the exited
leases.
|
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Gross gain on disposal
|
|
(3,703)
|
-
|
-
|
Surrender premiums (received)/paid in
period
|
|
(250)
|
-
|
-
|
Related surrender costs paid in
period
|
|
86
|
-
|
-
|
Impairment on exited properties
|
|
-
|
-
|
-
|
Net gain on disposal
|
|
(3,867)
|
-
|
-
|
6. Finance expense
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Interest payable on bank loans and
overdrafts
|
1,302
|
754
|
1,895
|
Interest on lease liabilities
|
2,786
|
2,421
|
5,161
|
Interest
payable
|
4,088
|
3,175
|
7,056
|
7. Income Tax
The taxation charge for the 26
weeks ended 30 December 2023 has been calculated by applying an
estimated effective tax rate for the 52 weeks ending 29 June 2024.
Due to brought-forward tax losses, no tax was due for the half-year
period.
8. Share-based payments
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Charge/(credit) in the
period
|
77
|
|
1
|
(166)
|
(Credit)/charge relating to
forfeitures in period
|
-
|
|
(164)
|
49
|
Total charge/(credit) arising from long-term incentive
plans
|
77
|
|
(163)
|
(117)
|
All remaining historic employee
share incentive schemes ceased in the prior year after all schemes
reached the end of their award period. Previous schemes did not
meet the success criteria and have thus ceased to operate with all
outstanding options lapsing.
The Group issued 4,155,290 options
under a Restricted Share Award ("RSA") scheme on 23 November 2021,
5,628,887 options under a RSA scheme on 25 October 2022, and a
further 2,961,954 options under a RSA scheme on 26 October 2023.
These are all subject to leavers and forfeits. The 2020 RSA scheme
vested in FY24 H1.
9. Earnings per share
The calculation of loss per
ordinary share is based on the results for the period, as set out
below:
|
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Profit/(Loss) for the period
(£'000)
|
|
3,078
|
|
166
|
(22,234)
|
Weighted average number of shares
- basic ('000)
|
|
230,049
|
|
230,049
|
230,049
|
Basic earnings/(loss) per Ordinary
share (pence)
|
|
1.3
|
|
0.1
|
(9.7)
|
Weighted average number of shares
- diluted ('000)
|
|
242,717
|
|
240,534
|
239,838
|
Diluted earnings/(loss) per
Ordinary share (pence)
|
|
1.3
|
|
0.1
|
(9.7)
|
Diluted shares are calculated making an assumption of outstanding
options expected to be awarded. The associated diluted
earnings/(loss) per Ordinary Share cannot be anti-dilutive and
therefore is capped at the same value as basic earnings/(loss) per
Ordinary Share. The diluted loss per Ordinary Share was capped for
the 52 weeks ended 1 July 2023, as it was anti-dilutive; however,
this update wasn't rectified on the face of the Consolidated
Statement of Comprehensive Income which incorrectly showed (9.3p)
rather than (9.7p). This has now been restated.
Profit/(Loss) for the period was
impacted by one-off exceptional costs. A calculation of adjusted
earnings per Ordinary Share is set out below.
|
Unaudited
26
weeks
ended
31
December
2023
£'000
|
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
|
Profit/(Loss) on ordinary
activities before taxation
|
3,078
|
|
(91)
|
(22,207)
|
|
Exceptional items, share-based
payments and bar opening costs
|
(3,821)
|
|
1,338
|
20,127
|
|
Adjusted (loss)/profit on ordinary
activities before taxation
|
(743)
|
|
1,247
|
(2,080)
|
|
Taxation on ordinary
activities
|
-
|
|
257
|
(27)
|
|
Taxation on exceptional items and
bar opening costs
|
(741)
|
|
-
|
3,561
|
|
Adjusted (loss)/profit of ordinary
activities after taxation
|
(1,484)
|
|
1,504
|
1,454
|
|
Basic number of shares
('000)
|
230,049
|
|
230,049
|
230,049
|
|
Adjusted basic (loss)/earnings per share
(pence)
|
(0.6)
|
|
0.7
|
0.6
|
|
Diluted number of shares
('000)
|
242,717
|
|
240,534
|
239,838
|
|
Adjusted diluted (loss)/earnings per share
(pence)
|
(0.6)
|
|
0.6
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Exceptional items, share-based
payments and bar opening costs did not include share-based payments
in FY23 and have been corrected to include so for the FY24 Interim
Results and will also be corrected for the FY24 Annual Report and
Accounts. By doing so, the adjusted basic and diluted earnings per
share is reduced to 0.6p.
10. Property, plant and equipment and
right-of-use assets
Property, plant and
equipment
|
Freehold
land and buildings
|
Short
leasehold premises
|
Fixtures
and fittings
|
IT
equipment and office furniture
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Cost
|
|
|
|
|
|
At 1 July 2023
|
1,652
|
90,479
|
69,029
|
11,033
|
172,193
|
Additions
|
-
|
271
|
679
|
213
|
1,163
|
At 30 December 2023
|
1,652
|
90,750
|
69,708
|
11,246
|
173,356
|
Accumulated depreciation and impairment
|
|
|
|
At 1 July 2023
|
(1,216)
|
(67,030)
|
(57,855)
|
(9,931)
|
(136,032)
|
Depreciation charges
|
-
|
(1,882)
|
(1,136)
|
(189)
|
(3,207)
|
At 30 December 2023
|
(1,216)
|
(68,912)
|
(58,991)
|
(10,120)
|
(139,239)
|
Net book value
|
|
|
|
|
|
At 30 December 2023
|
436
|
21,838
|
10,717
|
1,126
|
34,117
|
At 1 July 2023
|
436
|
23,449
|
11,174
|
1,102
|
36,161
|
Right-of-use assets -
Group
|
Short
leasehold premises
|
|
£'000
|
Cost
|
|
At 1 July 2023
|
132,809
|
Additions
|
736
|
Reassessment/modification of assets
previously recognised
|
(385)
|
At 30 December 2023
|
133,160
|
|
|
Accumulated depreciation and impairment
|
|
At 1 July 2023
|
(65,103)
|
Depreciation charges
|
(2,349)
|
Impairment charges
|
-
|
At 30 December 2023
|
(67,452)
|
|
|
Net book value
|
|
At 30 December 2023
|
65,708
|
At 1 July 2023
|
67,706
|
Depreciation and impairment of property, plant
and equipment and right-of-use assets are recognised in operating
expenses in the consolidated statement of profit or loss and other
comprehensive income. No impairment review is conducted at the
half-year, but a full impairment review is conducted across the
entire asset base at year-end.
11. Trade and other receivables
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Amounts falling due within one
year
|
|
|
|
Trade and other receivables
|
2,219
|
3,877
|
4,429
|
Accrued rebate income
|
629
|
487
|
721
|
Prepayments
|
3,869
|
3,211
|
5,809
|
Other debtors
|
-
|
-
|
489
|
|
6,717
|
7,575
|
11,448
|
There are also £646k of non-current
receivables relating to lease deposits due under lease agreements,
predominantly relating to pubs. This was included within current
receivables at FY23-end and have been appropriately disclosed as
long-term debtors from FY24 H1.
12. Trade and other payables
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Amounts falling due within one
year
|
|
|
|
Trade payables
|
13,424
|
13,057
|
15,011
|
Other payables
|
374
|
1,272
|
1,339
|
Accruals and deferred income
|
10,553
|
10,272
|
11,261
|
Other taxes and social security costs
|
5,644
|
4,356
|
4,109
|
|
29,995
|
28,957
|
31,720
|
13.
Lease liabilities
|
Short leasehold
properties
£'000
|
At 1 July 2023
|
125,323
|
Additions
|
736
|
Reassessment/modification of liabilities
previously recognised
|
(390)
|
Surrender of leases (note 5)
|
(3,703)
|
Modifications taken as a credit to
administrative expenses (note 5)
|
(287)
|
Lease liability payments
|
(6,015)
|
Finance costs
|
2,786
|
At 30 December 2023
|
118,450
|
|
|
The reassessment/modification of leases
relates to re-gears on existing leases, where the terms of the
lease have been changed such as an extension or change to rental
amount.
The lease liability cash payments in the year
comprise interest of £3.2 million and principal of £2.8 million.
£7.0 million of the net present value of lease liabilities are
current, and £111.5 million are non-current.
14. Provisions
The dilapidations provision relates to a
provision for dilapidations due at the end of leases. The Group
provides for unavoidable costs associated with lease terminations
and expires against all leasehold properties across the entire
estate, built up over the period until exit. Other provisions
include provisions for various COVID-19 related items, which are
uncertain of timing and therefore classified as less than one year.
Dilapidations provisions are expected to be utilised over the next
5-15 years as leases come to an end.
|
Other
provisions
£,000
|
Dilapidations
provision
£'000
|
Total
provisions
£'000
|
|
At 1 July 2023
|
871
|
1,967
|
2,838
|
|
Movement on provision
|
-
|
63
|
63
|
|
Utilisation of provision
|
-
|
(155)
|
(155)
|
|
At 30
December 2023
|
871
|
1,875
|
2,746
|
|
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Current
|
871
|
924
|
871
|
Non-current
|
1,875
|
2,003
|
1,967
|
|
2,746
|
2,927
|
2,838
|
|
|
|
|
|
|
| |
15. Interest-bearing loans and
borrowings
|
Unaudited
26
weeks
ended
30
December
2023
£'000
|
Unaudited
26
weeks
ended
31
December
2022
£'000
|
Audited
52
weeks
ended
1
July
2023
£'000
|
Revolving credit facility
|
24,000
|
23,000
|
25,000
|
|
24,000
|
23,000
|
25,000
|
As at the date of the consolidated financial
position, the Group had a total revolving credit facility (the
"Facility") of £30.0 million expiring in October 2025, of which
£24.0m was drawn down.
The Facility and the CLBILS are secured and
supported by a fixed equitable charge over the assets of Revolution
Bars Group plc, Revolución De Cuba Limited, Revolution
Bars Limited, Revolution Bars (Number Two) Limited, Inventive
Service Company Limited, and The Peach Pub Company (Holdings)
Limited and its subsidiaries.
16. Dividends
No dividend in respect of the
interim reporting period is being declared. No interim or final
dividend was declared in respect of the 52 weeks ended 1 July
2023.
17. Capital Commitments
There were £nil capital commitments
as at 30 December 2023 (at 1 July 2023: £nil).
18. Post Balance Sheet Events
Sale and Leaseback of the registered
offices
On 22 February 2024, the Group
completed a sale and leaseback on its registered offices at 21 Old
Street, Ashton-under-Lyne, OL6 6LA. The freehold property was sold
for £700,000 plus VAT, and the office space will now be leased back
on an initial three-year term including a break clause.
Fundraising, Restructuring Plan, Formal Sale Process and
M&A Process and Fundraising
Following an ongoing period of
softer trade, coupled with significant cost pressures on the Group,
today we have announced a Fundraising to fund a potential
Restructuring Plan, and provide working capital support for the
Group. At the same time as the Fundraising, we have also
announced the intention for Revolution Bars Limited to propose a
Restructuring Plan together with a number of additional measures to
be implemented across the Group to re-shape its business, as well
as exploring, in parallel, a Formal Sale Process in accordance with
the City Code on Takeovers and Mergers and an M&A Process, in
order to deliver the best, outcome for the stakeholders.
The Group has already implemented many actions to mitigate the
impact on the Group, including driving operational efficiencies,
reducing costs and cash outflows throughout the business, which has
included redundancies and reductions in overhead costs, in addition
to also reducing capital expenditure.
The impact of such strategies has
demonstrated improved performance in the Group, particularly in
Revolución de Cuba and Peach. However, the Board has decided it is
necessary for Revolution Bars Limited to propose a Restructuring
Plan to enable improved performance from the Group, at the same
time as commencing a Formal Sale Process.
Further details of the proposed
Fundraising, Restructuring Plan, Formal Sale Process and the
M&A Process are contained in a separate announcement, released
this morning.
19. Alternative Performance Measures - Adjusted EBITDA -
Non-IFRS 16 Basis
The Board's preferred
profit measures are Alternative Performance Measures ("APM")
adjusted EBITDA and APM adjusted pre-tax loss, as shown in the
tables below. The APM adjusted measures exclude exceptional items,
bar opening costs and charges/credits arising from long term
incentive plans. Non-GAAP measures are presented below which
encompasses adjusted EBITDA on an IFRS 16 basis:
|
|
26 weeks
ended 30 December
2023
£'000
|
26
weeks
ended 31
December
2022
£'000
|
52 weeks
ended
1
July
2023
£'000
|
Non-GAAP measures
|
|
|
|
|
Revenue
|
|
82,300
|
75,951
|
152,551
|
Operating profit
|
|
7,166
|
3,084
|
(15,151)
|
Exceptional items
|
|
(3,898)
|
1,501
|
20,244
|
Charge/(credit) arising from long-term
incentive plans
|
|
77
|
(163)
|
(117)
|
Adjusted operating profit
|
|
3,345
|
4,422
|
4,976
|
Finance expense
|
|
(4,088)
|
(3,175)
|
(7,056)
|
Adjusted (loss)/profit before
tax
|
|
(743)
|
1,247
|
(2,080)
|
Depreciation
|
|
5,556
|
5,403
|
12,057
|
Amortisation
|
|
2
|
3
|
5
|
Finance expense
|
|
4,088
|
3,175
|
7,056
|
Adjusted EBITDA
|
|
8,903
|
9,828
|
17,038
|
|
|
|
|
| |
The below table reconciles from
the statutory non-GAAP adjusted EBITDA to the APM formats, which
translates to a pre-IFRS 16 basis by inputting the rental charge
and other relevant adjustments.
|
26 weeks ended 30
December 2023
|
Reduction
in
depreciation
|
Reduction
in
interest
|
Onerous lease provision
interest
|
Rent
charge
|
IFRS 16
Exceptionals
|
26 weeks ended 30
December 2023
|
|
IFRS
16
|
|
|
|
|
|
IAS 17
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
7,166
|
2,579
|
-
|
-
|
(5,710)
|
(4,778)
|
(743)
|
Exceptional items
|
(3,898)
|
-
|
-
|
-
|
-
|
4,778
|
880
|
Charge arising from long-term
incentive plans
|
77
|
-
|
-
|
-
|
-
|
-
|
77
|
Adjusted operating profit
|
3,345
|
2,579
|
-
|
-
|
(5,710)
|
-
|
214
|
Finance expense
|
(4,088)
|
-
|
2,786
|
(100)
|
-
|
-
|
(1,402)
|
Adjusted loss before tax
|
(743)
|
2,579
|
2,786
|
(100)
|
(5,710)
|
-
|
(1,188)
|
Depreciation
|
5,556
|
(2,579)
|
-
|
-
|
-
|
-
|
2,977
|
Amortisation
|
2
|
-
|
-
|
-
|
-
|
-
|
2
|
Finance expense
|
4,088
|
-
|
(2,786)
|
100
|
-
|
-
|
1,402
|
Adjusted EBITDA
|
8,903
|
-
|
-
|
-
|
(5,710)
|
-
|
3,193
|
|
52 weeks ended 1 July
2023
|
Reduction
in
depreciation
|
Reduction
in
interest
|
Onerous lease provision
interest
|
Rent
charge
|
IFRS 16
Exceptionals
|
52 weeks ended 1 July
2023
|
|
IFRS
16
|
|
|
|
|
|
IAS 17
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
Operating loss
|
(15,151)
|
6,022
|
-
|
-
|
(10,424)
|
12,592
|
(6,961)
|
Exceptional items
|
20,244
|
-
|
-
|
-
|
-
|
(12,592)
|
7,652
|
Credit arising from long-term
incentive plans
|
(117)
|
-
|
-
|
-
|
-
|
-
|
(117)
|
Adjusted operating profit
|
4,976
|
6,022
|
-
|
-
|
(10,424)
|
-
|
574
|
Finance income
|
-
|
-
|
16
|
-
|
-
|
-
|
16
|
Finance expense
|
(7,056)
|
-
|
5,145
|
(211)
|
-
|
-
|
(2,122)
|
Adjusted loss before tax
|
(2,080)
|
6,022
|
5,161
|
(211)
|
(10,424)
|
-
|
(1,532)
|
Depreciation
|
12,057
|
(6,022)
|
-
|
-
|
-
|
-
|
6,035
|
Amortisation
|
5
|
-
|
-
|
-
|
-
|
-
|
5
|
Finance income
|
-
|
-
|
(16)
|
-
|
-
|
-
|
(16)
|
Finance expense
|
7,056
|
-
|
(5,145)
|
211
|
-
|
-
|
2,122
|
Adjusted EBITDA
|
17,038
|
-
|
-
|
-
|
(10,424)
|
-
|
6,614
|
The APM profit measures have been
prepared using the reported results for the current period and
replacing the accounting entries related to IFRS 16 Leases with an
estimate of the accounting entries that would have arisen when
applying IAS 17 Leases. The effective tax rate has been assumed to
be unaltered by this change.
The APM profit measures see a
large reduction in depreciation due to the non-inclusion of IFRS 16
depreciation on the right-of-use assets, and similarly
non-inclusion of the finance expense of interest on lease
liabilities. The operating profit/loss is impacted by the inclusion
of rent expenditure from the income statement and inclusion of the
onerous lease provision. Exceptionals are significantly impacted by
the change in impairment, and the classification of certain cash
exceptionals.