Revolution operator issues second profits warning

Inventive Leisure, operator of the Revolution vodka-bar chain, has issued another profits warning after a dramatic drop in trading.

The group said like-for-like sales had fallen 14.6 per cent for the three weeks to March 13.

Chief executive Roy Ellis said: "If this was an isolated week of poor trading it would be one thing, but we have had three weeks of what looks like an unpleasant trend.

"We have a responsibility to warn our shareholders of what could happen if the trend continues. If this trading continues we would expect profits to fall significantly short of current expectations."

The three-week trading decline has seen average like-for-likes for the second half of Inventive's financial year decline 10.4 per cent overall.

The statement follows a profits warning put out by the company last November, when a predicted uplift in trading failed to materialise.

The company has refrained from slashing drinks prices unlike many of its high street competitors. Mr Ellis said as a result it had lost some competitive ground and would now launch some tactical discounts.

Roughly a third of Revolution bars will discount during the week (12pm to 9pm) on selected products. Mr Ellis said premium products such as Stella Artois and Smirnoff would by typically pitched just under the £2 mark.

Products which the company pays less for would be sold to customers slightly cheaper. "A few operators, like us, have held back from discounting but I think we have now reached a watershed," added Mr Ellis.

The news came as the company announced half-year sales showing pre-tax profits up five per cent to £1.5m on sales up 17 per cent to £17.4m.