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Revolution Bars Group plc (LSE:RBG)

H1 Trading Update

Revolution Bars Group plc ("the Group" or "the Company"), a leading operator of 90 premium pubs and bars, trading mainly under the Revolution, Revolucion de Cuba and Peach Pub brands, today announces a trading update for the 26 weeks ended 31 December 2022.

In the 5 weeks to 31 December 2022 (the "Christmas Trading Period") LFL sales for the group compared to the same period in 2021 were up 17.3%, with strong corporate party bookings reflecting a return of corporate guest confidence. The comparative period in these numbers was, however, affected by Omicron.  Furthermore, pre booked party revenue in the Christmas Trading Period, an indicator of corporate confidence, was up 10.3% vs 2019 representing an all time LFL sales record for the Group. 

By comparison however our guests' confidence in the reliability of the train service and their ability to travel has been severely impacted over recent months, with the threat of and ultimately significant industrial action through strikes in the week commencing 11 December, traditionally our busiest week of the year. This taken together with the ramifications of the  cost of living crisis has meant that our walk-in revenue was lower than in previous years, with a consequential impact on Group sales.  Group LFLs for the Christmas Trading Period, when compared to the same period in 2019, the last Christmas period not affected by Covid 19, were (9.0)%. 

Pleasingly, over the Christmas Trading Period, our recently acquired, Peach Pubs business continued its strong performance delivering LFLs over the same period with revenues increasing  7.5% compared to 2021 and 10.1% compared to 2019 clearly demonstrating the additional resilience and diversity that Peach Pubs has brought to the Group since its acquisition in October 2022. 

Overall in H1, the 26 weeks ended 31 December, compared to the same period in 2019, LFL sales in the Group were (9.4)% reflecting the impact on our Revolution and Revolucion De Cuba brands of the record temperatures in the summer, the previously mentioned industrial action on the railways, together with the poor economic outlook on guest confidence.  By comparison, in the period since acquisition in October 2022, LFL sales at Peach Pubs compared to 2019 have remained significantly positive at 9.9%. 

As a consequence of the impact on our key Christmas Trading Period, the Board has reassessed its expectations of the Group's FY23 outturn assuming that industrial action subsides, energy prices hold at their current levels and taking into account various mitigating actions being undertaken.  These mitigating actions include closing a number of the Revolution and Revolucion de Cuba sites on Mondays and Tuesdays in January and early February to manage our energy usage, amongst additional benefits to our teams.  The Board have now concluded that the IAS 17 EBITDA outturn for the year, including rental costs, is likely to be lower than previously guided and is estimated to be at the bottom end of the range of market expectations, of £6.7-10.5m.

Group Net Debt as at 31 December was £18.5m.

The Group intends to publish its Interim Results for the first half on 7 March 2023.

Rob Pitcher, CEO of Revolution Bars Group, said:

'The first Christmas since 2019 without the shadow of Covid, saw a new company record for pre booked party revenue allowing us to be optimistic of a strong Christmas period.  However, 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.

The Board have reviewed their expectations for the full year, taken a number of actions to mitigate the external factors where possible, and will continue to track these closely.  The decision to close some bars on a Monday and Tuesday in the early weeks of the year allows us to minimise energy usage in our quietest period whilst also allowing our teams to recover after the busy Christmas period.

I am again proud of our team's resilience during this disrupted Christmas and New Year period, and know that they have loved, as have I, seeing our guests enjoying themselves.'