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Revolution Bars Group PLC on Tuesday reported a swing to an annual loss and predicted tough economic conditions will persist for another year at least.
Shares in the company traded 4.1% lower at 3.50 pence each in London on Tuesday morning.
The bar operator said results for the year ended July 1 were in line with expectations.
Revenue was 8.3% higher at £152.6 million from £140.8 million the year prior. However, it swung to a pretax loss of £22.2 million, from a profit of £2.1 million.
Revolution Bars booked exceptional costs of £20.2 million, surging from £561,000. They included £12.6 million worth of impairments for right-of-use assets, and £6.1 million of impairments for property, plant and equipment.
Operating expenses, excluding the exceptional items, were also higher, climbing 9.1% to £112.0 million from £102.7 million.
The company operates the Revolution, Revolucion de Cuba, Playhouse and Peach Pubs brands. The latter was acquired for £16.5 million in October of last year.
Chief Executive Officer Rob Pitcher said: ‘Peach Pubs has seen continued strong trading since acquisition, especially during periods of good weather. We are very excited to open our first new Peach Pub since the acquisition and see this brand as having significant expansion opportunities across the United Kingdom when we have the necessary available funds.
‘The group now offers a well-rounded, diversified offering through our bars and pubs to navigate the ongoing challenges our guests face with the cost-of-living crisis. The macroeconomic challenges facing the industry impact on both our guests’ available spending as well as profitability of the business. This is a key area of focus for our management teams, and we are pleased to see the impact of our sales-driving initiatives coming to fruition, alongside active cost management.’
Pitcher said pre-booked revenue for the festive period is at ‘record-highs’.
Beyond that, however, the company faces ‘a further 12-to-18 months’ of macroeconomic challenges.
Revolution Bars explained: ‘Our young guests are, in the bars business, disproportionately impacted by the cost-of-living crisis, facing unprecedented challenges against their earnings and outgoings. We are pleased to see utility prices continuing to trend in the right direction which is of some comfort to both our guests and the business. Inflation has, hopefully, peaked, and is now starting to fall with consumer confidence starting to rise.
‘The continuing challenge with interest rates remaining high means we anticipate the macroeconomic climate to remain difficult for a further 12-to-18 months. We continue to monitor the situation carefully and mitigate our cost base wherever possible.’
The late-night hospitality economy is facing ‘very challenging times’, it added.
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