The operator of 69 bars, mainly under the Revolution and Revolución de Cuba brands, had delayed its results announcement due to completing its purchase of The Peach Pub Company.
After restrictions were lifted on 19 July 2021 in England, two weeks into the company’s 2022 financial year (FY), the group enjoyed strong trading, which was slower to return in Wales, Northern Ireland and Scotland where restrictions continued for longer. The important festive trade of 2021 and early 2022 was disrupted by Omicron, but post-Omicron trade was buoyant.
Other figures of note included total sales for FY22 at £140.8m (£39.4m: 2021), operating profit at £7.4m (loss of £21.2m: 2021), adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) at £19.4m (loss of £3.9m: 2021) and net cash at £4.1m (loss of £3.6m: 2021).
Revolution said it spent £8.3m in capex (capital expenditure) across 19 refurbishments, two new sites, new concepts and other planned capital expenditure. Four more have been revamped so far in FY23 with up to 18 more planned for the current FY.
New bars and new concepts
Expansion resumed with two new leases, the first in four years, resulting in the opening of two new Revolution bars in Preston and Exeter.
Two new concepts are said to “provide estate flexibility and diversification”, with these being Founders & Co, which had its first full year of trading and Playhouse opened in November 2021.
The business’s sustainability journey is set to continue with the removal of passion fruit garnishes from its cocktail menu, energy reductions, recycling advances, investment in in its Reading de Cuba sustainability flagship site and ‘Zero Heroes’ in all sites.
Revolution has also focused on managing financial headwinds by mitigating inflationary increases, such as employment, food, transportation and energy, wherever possible with “forensic and relentless focus on costs”.
Its energy costs are largely fixed until April 2023 while it is engaging with brokers to secure best available pricing from the spring onwards. It has also seen reductions in energy usage.
Business rates cut plea
Revolution bars Group chief executive Rob Pitcher said: “We are hugely encouraged by the performance in FY22, seeing what trade and performance can look like under normal trading conditions with our better-invested estate.
“Like all hospitality businesses, we are facing significant challenges and urge the Government to deliver the promised reform of the business rates and support all high street businesses through these extraordinary times with an immediate 50% business rates cut for all businesses, no matter of size.
“Additionally, a cut in the headline rate of VAT to help lower the cost impact would assist in reducing further price rises, without which price rises are inevitable, further feeding inflationary pressures.
“We remain focused on delivering great value and providing good times for our guests and are very mindful of the pressures they are experiencing. Having said that, our young adult guest base are somewhat protected from the ongoing cost pressures and continue to prioritise experiences and their freedom.
“Looking forwards, we are focused on navigating the current macro-economic situation, developing our business, and putting in place further building blocks for continued growth.”