The operator of Revolution bars has announced plans to float on the Stock Exchange to raise funds for major expansion, including further roll-out of its rum bars.
It believes there is “significant growth potential” to increase its Revolution bars from 53 to around 100 and its Revolución de Cuba rum bars (pictured) from five to about 40. It would consider corporate acquisitions if a suitable opportunity arose.
The group is currently targeting a roll-out of up to five new bars per year by the end of its 2017 financial year, with a likely initial focus on Revolución de Cuba.
Revolution Bars Group, formerly The New Inventive Bar Company, also plans to invest in more larger-format bars which, on average, have a floor area of about 7,800 square feet, making them almost 70% larger than the company’s standard format.
While these cost more money to develop – typically around £1.7million per site – they have in the past delivered, on average, more revenue and higher profits and returns than the standard bars.
In advance of the initial public offering (IPO) of shares via the Stock Exchange’s main market, the group has appointed a new non-executive chairman, Keith Edelman, the former managing director of Arsenal Football Club and current chairman of Goals Soccer Centres.
It has also added to the expertise of the board by appointing an independent non-executive director, Michael Shallow, who was finance director of pub group and brewer Greene King from 1991 to 2005.
Keith said: “I believe the group’s brands, the markets in which it operates and the experience of the board in the UK retail and leisure sectors make it well placed to fulfil its growth ambitions.”
For the six months to the end of December, the group’s bars reported a 3% rise in revenue to £58million and a 13% increase in adjusted earnings (EBITDA) to £7.9million.
From December 7 to 20, the bars enjoyed their two best weeks in terms of revenue since the company began. In the six weeks to January 3, the group’s like-for-like revenue was up 6% compared to the same period the year before.
Under chief executive Mark McQuater, the company has carried out an “Evolution” programme to refurbish and upgrade its Revolution bars, extending their trading more into the daytime as well as late night. It has repositioned them through a new cocktail, premium drink and food-led strategy.
The more recently introduced Revolución de Cuba concept specialises in rum and rum-based drinks, Latin American- and Cuban-themed live entertainment and a Spanish and Latin American food menu.
Because the two concepts target different demographics, the directors believe both brands can co-exist in close proximity with minimal cannibalisation of each other’s trade.
Mark said: “Revolution Bars Group is one of the leading players in the UK’s premium drinking-out and casual-dining-out markets, with a well-invested trading estate of 58 bars that is generating market-leading returns in this sector.
“Both Revolution and Revolución de Cuba are premium brands which target a growing market where we believe a premium offering is in demand.
“We believe that a successful listing will complement the group’s growth strategy and help support our roll-out plans for the group’s branded bars in the UK.”
Pictured: Revolución de Cuba in Peter Street, Manchester.