Revolution Bars share price plummets after revealing wage malaise

 
Oliver Gill
Follow Oliver
TOPSHOT-CHINA-COLD
Revolution Bars said it had been hit by a trio of increasing costs (Source: Getty)

The owner of Vodka Revs has been hit by an icy blast of spiralling costs.

Shares in the London-listed firm plummeted by 30 per cent in early trading.

Revolution Bars said sales performance "remained positive" in the second half of the year.

But the firm warned on a trio of cost challenges. It laid out the issues in a statement to the stockmarket this morning: "The company is experiencing the well-publicised sector cost headwinds from the impact of the living wage, the double increase this year in minimum wage, the new apprenticeship levy, as well as the above inflation increase in general business rates.

"These increased costs will be more than anticipated in the current year."

In January, Revolution Bars said trading was in line with expectations.

Read more: Revolution Bars says cheers to Christmas sales as forecasts look good

Revolution Bars opened five Cuban-themed public establishments during the year. While takings were in line with expectations "these bars are taking longer to mature to full profitability than originally anticipated".

The firm said the consequence of all of this news was that there would be no earnings growth in the year to July 2017. It added:

The directors remain confident in the underlying strength of the business, its brands, the strong customer proposition and the business's capability to deliver high returns on invested capital. Consequently, it remains the plan to open six new bars in the next financial year.

Read more: Fewer but bigger nights out revolutionise bar group's profits

Related articles