Revolution Bars Group today signalled it plans to target expansion opportunities in the next financial year as it makes progress with its turnaround plan.
Revolution Bars Group posted a 20.5 per cent jump in adjusted profit before tax from £2.9m to £3.5m in the 26 weeks to 28 December.
Group like-for-like sales increased 1.2 per cent, driven by record trading over the four week Christmas trading period.
Total sales in the 26 weeks were up 3.5 per cent to £81.2m, boosted by the annualisation of trading of five bars opened in the first half of FY19 but offset by the closure of three poorly performing sites in the current period.
Gross bank debt reduced £7m to £11.5m.
The company said it would not pay out an interim dividend as it focused on “investing to revitalise our brands and reducing debt”.
Why it’s interesting
The company – which operates 74 sites in the UK – has been working to improve its Revolution bar concept, which is targeted at young adults.
Revolution branded sites suffered a 0.4 per cent decline in sales during the period, however the bar operator said this was a “much improved” trend compared to last year.
Today it said the recent new and refurbished sites were performing well and “are proof that the Revolution brand remains relevant and liked by its customer base”.
Meanwhile, its Revolucion de Cuba bars – which are aimed at a broader age range – reported a sales jump of five per cent.
After the end of the reporting period the group exited five loss making sites at a cost of £3.6m, and secured small net rent reductions at a further four sites.
The transactions, with a lease surrender agreed in the first half, are expected to deliver annualised cash benefits of £1.3m.
It said the board is “confident the business will be well-positioned to resume site expansion in FY21″ if it continues “on its current trajectory”.
What Revolution Bars said
Chief executive Rob Pitcher said: “We have continued to make significant progress revitalising the Revolution brand and further improving the performance of Revolucion de Cuba.
“Having stabilised the business in FY19, FY20 is about consolidation and the benefits of the many actions that we have taken are beginning to be realised.
“The second half of FY20 has started encouragingly and should we continue on our current trajectory then the board is confident the business will be well-positioned to resume site expansion in FY21.”