Revolution Bars Group has blamed “challenging and volatile trading conditions” including the weather for a drop in sales.
In a trading statement today, it warned that full-year underlying profit performance was likely to be in line with last year’s result of £15.1 million and that adjusted earnings, EBITDA, were now expected to be below market expectations.
The group, which operates 74 bars as Revolution and Revolución de Cuba, also revealed that like-for-like sales, which excludes new openings, would be down 1.7% for the six months to June 9.
However, overall sales for the half year were up 7.3%, with the five bars that have opened since December performing to expectations. It is continuing to expand its two brands, with six new sites scheduled to open this year, including four large ones.
In its statement, it said: “The adverse, wintery weather conditions in March combined with the unusually hot weather throughout May and early June has curtailed typical late-night weekend trading.
“The sales performance in the last six weeks at sites with significant outside trading areas has performed well relative to last year.”
The company has also been without a CEO since October when Mark McQuater resigned after the failure of a takeover bid by Stonegate Pub Company. New CEO Rob Pitcher, a divisional director at Mitchells & Butlers, was appointed in February but will not start until June 25.
The statement continued: “Whilst the board believes that the weather has been the most significant factor impacting the sales trend, disruption caused by operational management change prompted by the unsettling effect of last year’s takeover activity and the prolonged absence of a CEO has also played its part.”
The weak trading has affected both its brands although Revolución de Cuba – now in 16 locations – enjoyed like-for-like sales growth.
For the 49 weeks to June 9, total sales across all the bars were up by 9.1% while like-for-like sales were down by 0.5%.
Wet sales have performed better than food, particularly in Revolution bars where little food development and innovation was undertaken in 2017. However, the arrival of a new group food director, Simon Dobson, at the end of January is expected to “drive a step change in food sales and profitability”.
Overall, the board said it remained confident in the future prospects of the business because of its renewed focus on food and other initiatives such as improvements to the effectiveness of its marketing spend.
The company said that a roll-out of labour scheduling software across all venues had been completed in recent weeks and was starting to deliver real operational improvements.
It added: “Pre-booked revenue continues to grow and it is anticipated that further strong growth in this important income stream will be achieved.”