In its latest trading update, the group, which operates the Revolution and Revolución de Cuba brands, describes the move as one of a number of mitigating actions being undertaken as the it revises down its profit forecast for the year.
While pre-booked party revenue in the Christmas trading period (five weeks to 31 December 2022) was up 10.3% on 2019, representing 'an all time like-for-like (LFL) sales record' for the group, walk-in revenue was lower than in previous years with a consequential impact on sales.
Group LFLs for the Christmas trading period, when compared to the same period in 2019, were up 9%.
“The first Christmas since 2019 without the shadow of Covid, saw a new company record for pre booked party revenue allowing us to be optimistic of a strong Christmas period,” says Rob Pitcher, CEO of Revolution Bars Group.
“However, the continued train strikes had a material impact on whether guests attended their office Christmas parties, how long they stayed and whether they met up with friends on a separate occasion.
“Given the current economic environment, the coming months are going to be challenging and uncertain, not only for us, but for many businesses. We are not immune to this.”
The group adds that its Peach Pubs business, which it acquired in October last year for £16.5m, saw LFL revenue increase 7.5% compared to 2021 and 10.1% compared to 2019 over the Christmas trading period.
Overall in the 26 weeks ended 31 December, compared to the same period in 2019, LFL sales in the group were up 9.4%, reflecting the impact on our Revolution and Revolucion De Cuba brands of the record temperatures in the summer, and the previously mentioned industrial action on the railways together with the poor economic outlook on guest confidence.
By comparison, in the period since acquisition in October 2022, LFL sales at Peach Pubs compared to 2019 were up 9.9%.
As a consequence, the board has reassessed its expectations of the Group’s 2023 financial year outturn, and has now concluded that the EBITDA outturn for the year, including rental costs, is likely to be lower than previously guided, and is estimated to be at the bottom end of the range of market expectations of £6.7- £10.5m.
Group net debt as at 31 December was £18.5m.
“The Board have reviewed their expectations for the full year, taken a number of actions to mitigate the external factors where possible, and will continue to track these closely,” adds Pitcher.
“The decision to close some bars on a Monday and Tuesday in the early weeks of the year allows us to minimise energy usage in our quietest period whilst also allowing our teams to recover after the busy Christmas period.”